Hausse of Chinese Companies Protecting Their Inventions Overseas

+ 33.4 %
Some international patent filings statistics from Geneva. The amount of international patent filings of Chinese companies and educational institutions grew with a stunning 33,4 percent in 2011 to 16,406. This means that more and more Chinese companies and educational institutions value overseas patents to protect their inventions. The U.S. still leads the applications with 26.7 percent of the total share, followed by Japan (21.4 percent), Germany (10.2 percent) and China (9 percent).

Please note that there is no such thing as an international patent. Under the Patent Cooperation Treaty (PCT) you can file a standard national or regional patent application (international patent filing), and designate one or more countries. After that each jurisdiction decides whether or not to grant you a patent for that designated country. The moment of the international patent filing establishes the filing date for all designated countries. 18 months after the filing date or the priority date, the international application is published by the International Bureau at the World Intellectual Property Organization (WIPO) in one of ten languages, which includes Chinese. In case the international patent application only designates the U.S., this publication is not automatically published.

Since January 1, 1994 China is a member the PCT. China's State Intellectual Property Organization is one of 16 institutes which offers the services of the International Searching Authorities (ISA) and International Preliminary Examining Authorities (IPEA).

There are 4 Chinese companies in the top 100 of companies that filed the most PCT applications.
1. ZTE Corporation 2826 applications
3. Huawei Technologies Co. Ltd. 1831 applications
4. Huawei Device Co. Ltd. 327 applications
87. Alcatel Shanghai Bell Co. Ltd. 176 applications

Of the educational institutes there is only one Chinese institute that secured a position in the ranking. With 36 international patent applications Tsinghua University in Beijing landed a shared 493rd position with Korean institute Postech Foundation, University of Pittsburgh and Danmarks Tekniske Universitet.

See WIPO's press release here.

continue reading ...

TGIF: Vacuum Cleaner Inventor Says The Darndest Things

Thank goodness it is Friday

Sir James Dyson was quoted by Dan Milmo in the Guardian, here, saying:

"They are running the risk of being expelled from the WTO. They are creating an unlevel playing field by taking our technology and selling it all over the world." 

With "they" Mr Dyson means China. I understand Mr Dyson's frustration, but the quote is grotesque. China cannot be simply pulled out of the World Trade Organization (WTO) equation. China is one of its key players. The idea about the WTO is to resolve the issues via a binding dispute resolution system. When Mr Dyson would have said that a dispute resolution procedure could be started against China's lack of IP enforcement or non-compliance of the national treatment principle (treating foreign companies at least as good as domestic ones), it would have made more sense.  

Police in Shenzhen. Aren't we ... visible?
Photo: Danny Friedmann

In the piece Mr Dyson, who invented the bagless vacuum cleaner and the bladeless electronic fan, makes the following clueless allegations to China:

- "China benefits from strictly monitored IP regimes outside its own border, but has failed to crack down on domestic offenders as it pursues rapid economic growth." Does China benefit much from strictly monitored IP regimes, if their alleged infringed products cannot enter into other countries? Did China fail to crack down on domestic offenders? One can argue that China failed to crack down on domestic offenders inadequately or insufficiently. But to assert that China failed to crack down on domestic offenders is simply not true (think about all the campaigns with the fancy names, see here 2010 and here 2011).
Mr Dyson backs up his claim with anecdotal, evidence: a patent infringement case he won, but where the infringers did not pay the fine nor stop their infringing activities.
- "China's reputation among foreign investors is being diminished by the flouting of product copyrights and a two-speed patent system that appears to discriminate against non-Chinese applications."

With "product copyrights" probably intellectual property protection is meant, which includes invention-patents, utility-patents, design-patents, trademarks, copyrights and trade secrets. To make such sweeping statements is not useful unless they are backed up by research that gives the status on how the intellectual property rights of British industries or European industries are protected. Until now Chinese foreign direct investments did not correlate much with China's level of intellectual property enforcement level. It seems more to correspond to China's economic growth. And I have not come across evidence that foreign patents on average are examined slower. Very broadly speaking a utility and design patent takes about half a year and an invention patent can take up to two years time. 

Dyson, the company, is spending 10 million UK pounds per year on legal costs (according to an article by James Hurley in the Telegraph, see here) and is also inventive to bring the intellectual property in China challenges under the attention of people in British government, such as David Cameron (prime minister) and Baroness Wilcox (IP minister). 

Inconvenient truth about intellectual property infringement

A Dyson bagless vacuum cleaner costs about 4,000 Yuan in China. Factory workers in Shenzhen make about 1,200 Renminbi per month and middle class earnings are about 4,000 Renminbi per month. The inconvenient truth is that the more a company has spent on research and development (as is the case with Dyson) or marketing and advertising (as is the case with luxury brands) the bigger the incentive for infringers to ride on the coat tails of some other companies' economic activities.

continue reading ...

Patents in China: Quantity Obsessed Quality Challenged

Time for quality patents
Photo: Danny Friedmann

Now we are all following Ericsson sueing ZTE for patent infringement in Germany, UK and Italy, read here. Followed of course by ZTE trying to invalidate Ericsson's patent at China's Patent Re-examination Board, read here, because of an alleged lack of novelty, inventiveness or usefulness. In other words: lack of quality.

Wan Gang 万钢 minister of Science and Technology, was saying some remarkable things about innovation that might bode not too well for patent quality, when he was interviewed during a press conference held by the State Council Information Office, April 2 about China's scientific and technological research as outlined in the 12th Five-Year Plan.

Minister Wan was quoted by the Global Times saying that China's budget for research and experiment across the country should account for 2.2 percent of GDP. And that the number of patent-holders per 10,000 people should be the second benchmark.

One can question the usefulness of the latter benchmark. What kind of patents are meant, utility patents which are for incremental innovations, design-patents or invention patents? Read more about utility patent here. Quantity does not say much about the quality of patents. And patents are preoccupied with usefulness (article 22 Patent Law 2008), and scientific discoveries (article 25.1 Patent Law 2008) are excluded of getting a patent. while it could be the case that fundamental research is most fruitful in the longer run.

Read the interview at Global Times here.

continue reading ...

New Red Dawn in Patents: More Chinese than Foreign Companies Filed Chinese Invention Patents

Joff Wild of IAM Magazine has another great blog: 'Major breakthrough for Chinese companies in the patenting stakes' , read here.

Mr Wild observes that according to SIPO's statistics the first half of 2009 show that Chinese domestic companies filed more invention patents than foreign companies. In 2007 only 1 percent of all Chinese companies filed any patent. That is 99 percent to go. Mr Wild: "Can you imagine the numbers involved when, say, 10% of them are making use of the patent system?"

Yes, an exciting era has started.

Picture: Alfred Smith

CC BY-SA 2.0

continue reading ...