The annual World Intellectual Property Indicators Report (WIPI) and China’s IP boom

On 8 November 2021, the World Intellectual Property Organization (WIPO) published its annual World Intellectual Property Indicators Report (WIPI), reviewing global IP activity in 2020. 

WIPI compiles data from around 150 IP authorities (both national and regional) and WIPO concerning filing, registration and renewals on IP rights. It finds that 2020, for all its eventfulness, presented a resilience force in IP – several main application volumes worldwide increased since 2019: 

WIPO Director General Daren Tang commented on the soaring growth in trade mark applications (13.7%): 
This shows how enterprises across the globe have brought new products and services to the market, as reflected by the double-digit growth in trade marks filing activity in 2020 despite the massive economic shock. Despite the difficult situation, enterprises are finding opportunities to reach customers in new ways, open up new markets and bring their ideas to the world using IP. 
WIPO’s press release provides a concise yet comprehensive overview of the 232-page WIPI, providing a pretty webpage with interactive charts. It summarizes the main IP rights (patents, trade marks, industrial designs, plant varieties and geographical indications) per the total number of worldwide filings, the number of IP rights in force and the year-on-year change. Furthermore, it analyses the data structure based on industry, region and the respective top offices. 

On the press release page, this Kat found ‘China’ to be a high-frequency word (I originally thought it was selective attention bias, but nope; the count was 16 times). China tops the ranking of the total (resident and abroad) IP filing activity by origin in 2020 (see page 9 of WIPI) and is first on each category of IP applications worldwide (see page 8 of WIPI), except for geographical indications (Germany ranked first and China second). 

It is hardly news anymore to see that China tops the list in IP filing. The reasons are multiple and interactive and include the vastness of China, its trade volume and innovation growth. Furthermore, China has policies in place promoting the development of IP as part of a national strategy. In 2008, when the Outline of the National IP Strategy was announced (the 2008 Outline), ‘quantity’ was explicitly mentioned as one of the five-year strategic goals to pursue. The 2008 Outline states that: 
The quantity of intellectual property will be greater. China will rank among the advanced countries of the world in terms of the annual number of patents for inventions granted to the domestic applicants, while the number of overseas patent applications filed by Chinese applicants should greatly increase. 
Accordingly, administrative incentives dedicated to volume-increasing frequently emerged, inter alia, the well-known subsidies for patent and trade mark applications and local governments’ financial aids. 

In addition, IP practitioners are numerous in China. For example, by the end of 2020, 53,090 professionals held the patent agents qualification certificate in mainland China (source: The China National Intellectual Property Administration, CNIPA). In the EU, the number of patent professionals in 2021 is 12,703.* Thus the competitive pressure in China has resulted in (overly-)low-priced patent services that are quite accessible for the price-sensitive group. That, consequently, may have led to suboptimal-quality inventions or the roughly written patents being counted in the patent registrations, which is an unsustainable model of development. 

In China, it is noticeable that there have been lively discussions about this year’s WIPI and the ability of China to transition from its previous status as a “big country in IP” to a “powerful country in IP”. This would be a more satisfactory title than simply “first in total”. Many specifically point to the indicator of abroad patent applications (page 16 of the WIPI), which are read as a reference point for patent quality, for presuming that chances are better for the high-quality patent holders filing overseas applications. For that indicator, China ranks fourth (96,268), whilst the U.S. reached 226,297, Japan 195,906 and Germany 99,791 – there is quite a gap in between. WIPI also writes the follows on the same page: 
Only 6.7% of all applications from China were filed abroad. In contrast, filings abroad constituted 59.4% of total applications from Germany.
The above-mentioned gap and the discussions it sparked reflect China's current weakness in innovation and quality of patent (though this Kat is not sure yet about the metric of ‘patent quality’). Policymakers have long noticed this problem as well. To combat this, earlier in this year the CNIPA issued the Notice of Further Strictly Regulating Patent Application Activities (the Notice), wherein it changed the focus of IP in China ‘from the pursuit of quantity to the improvement of patent quality’. Among other measures, notably, it puts an end to the following patent subsidies:
To adjust the patent funding policy. Before the end of June 2021, all levels of funding for patent application will be completely cancelled. Each region shall not provide government grants to patent application activities in any form such as funding, reward, and subsidies.

All regions shall gradually reduce various government funding for patent grants and such funding shall be fully canceled by 2025.
The Notice also enumerates several types of ‘irregular patent applications’ that shall be ‘resolutely cracking down’, including submissions inconsistent with the entity’s or individual’s capabilities of research and development, or trading patent applications abnormally. As an administrative guideline, it turns out to be quite effective. In the first half of 2021, the CNIPA notified 545,000 irregular patent applications. 

These changes echo and are in line with the latest shifts happening in the IP climate in China whose overarching direction is set out by the State Council at the recently released China's 15-year blueprint on IPR development (2021–2035) (covered by this previous Kat post). The blueprint is having, and will keep having, a lasting impact on China's IP prospect. Its reflections upon China's data at the following WIPIs seems worth tracking. 

* This Kat could only find data of 2021, not 2020. 

Photos courtesy: WIPO's WIPI Press Release

The annual World Intellectual Property Indicators Report (WIPI) and China’s IP boom The annual World Intellectual Property Indicators Report (WIPI) and China’s IP boom Reviewed by Tian Lu on Monday, November 29, 2021 Rating: 5

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