China Higher and Higher in PCT Applications' Heaven

The World Intellectual Property Organization (WIPO) published statistics of the number of Patent Convention Treaty (international patent) applications worldwide. China's PCT applications from 2008 to 2009 rose an estimated 29.7%, to 7,946 applications, estimated for 2009.




The top PCT applicants of 2009 include two Chinese providers of telecommunication and network solutions:


Rank 2: Huawei Technologies Co., Ltd.: 1,847 PCT applications published in 2009
Rank 23: ZTE Corporation: 502 PCT applications published in 2009



The Economist made a nice visual representation of those WIPO statistics, see here. You see that China ranks fifth, just behind the US, Japan, Germany and South Korea and before France, Britain and the Netherlands. The Economist wrote: "Since 2005 applications from China have grown by 210% as the country has developed a home-grown high-tech sector."

Domestic patent applications: According to WIPO statistics of 2008, China is after the US and Japan the third biggest receiver of domestic patent applications. Read more here.

The statistics of the number of PCT or domestic patent applications are interesting, but of course the number of patent grants are more interesting.

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Taylor Wessing Global Intellectual Property Index and China: The Last Shall Be The First

The People's Republic of China was ranked last (24th position) in the Taylor Wessing Global Intellectual Property Index 2009, see here. The methodology of the GIPI rating is a calculation by a factor assessment model with jurisdiction assessments and instrumental factors as input. See the methodology here. 

About China's trademark system Taylor Wessing complains about the delay in adopting the new Trademark Law which it sees as the solution to the registry delays and backlogs. The time from application to publication of trademarks in China is according to Taylor Wessing currently three years and the duration of opposition procedures up to five years. It says that there is an "absence of any protection for unregistered marks, save the 230 or so marks held to be “famous” (of which only about 20 are foreign), remains a concern for respondents." Taylor Wessing is more positive about China's National IP Strategy and an electronic application system which has cut costs and allocated filing receipts and application numbers quite quickly.

About China's copyright system Taylor Wessing wrote: "China trails overall, as well as for each

of the attacking, enforcing, exploiting and cost-effectiveness subindices." The lack of effective enforcement of copyright is respondents' primary concern, as is bureaucracy associated with giving evidence, and criminal remedies that are perceived as too low, underused and with thresholds set too high, civil and administrative remedies inadequate. Taylor Wessing mentioned also the harsh criticism China received from the USTR in the Special 301 Report. The supporting argument that China faces the "the harshest and most in-depth criticism" because it was covered in 24 pages while the other 45 countries only got 16 pages is not very convincing. It is not the quantity but the quality of the commentary that counts. On a positive note Taylor Wessing acknowledged that the US government considers that progress is being made because China is fulfilling its WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT) and WTO TRIPs obligations. 

About design Taylor Wessing wrote that "China’s courts have awarded $3 million to the German

bus maker, Neoplan, in one of the biggest design patent infringement awards since China joined the WTO in 2001." China’s design system which requires annual renewals of designs (plus renewal fees) is seen by respondents as onerous and in need of reform, according to Taylor Wessing.

About China's domain names system Taylor Wessing wrote that although China has liberal registration rules it ranked low, because domain names are extremely cheap to register in China, which has encouraged domain name squatters. Taylor Wessing: "It remains to be seen whether the recent exponential increase in numbers (nearly 90% last year) is an ongoing trend or a spike, and also whether brand owners’ awareness of the issue and increasing interest in doing business in China will lead to them registering more pre-emptive .cn domain name." 

About China's Patent system Taylor Wessing was quite positive: "China certainly has also made significant efforts over the past few years to improve its IP systems." The respondents appreciated China's new specialist IP courts, that are relatively much speedier than before and anticpate the Third Amendment to the Patent Law which will take effect October 1st, 2009 and will introduce the absolute international novelty standard and the possibility of compulsory licensing for patents unused within 3 years of grant. 

I am not sure whether Matthew 20:16 (King James Bible) can bring any consolation for China's low score, but here goes: "So the last shall be first, and the first last: for many be called, but few chosen."

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US Customs Seizure Statistics 2008: "China number one, India number two and Hong Kong number three counterfeit producer"

The U.S. Customs and Border Protection and Immigration and U.S. Customs Enforcement divisions of Homeland Security gives some statistics about the numbers, characteristics and origins of counterfeit goods seized in the U.S. in 2008.
IPR seizures of goods from China rose 40 % by value in 2008. Footwear from China accounts for almost 96% of all IPR infringing footwear. "In 2008, China, India, and Hong Kong, the top three trading partners for IPR seizures overall, accounted for 94% of all IPR seizures of products posing potential safety or security risks." Read more about on the CBP.gov site here.

IPR seizures counterfeit products originating from:

• 1. China $ 221.7 million (81 %);
• 2. India $ 16.2 million (6 %);
• 3. Hong Kong $ 13.4 million (5 %);
• 4. Taiwan $ 2.6 million (1 %);
• 5. South Korea $1 million (<1%).

Read more statistics here.

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China Ranks 45th in International Property Rights Index (which includes IPR)

The 2007 International Property Rights Index (IPRI) is the first international comparative study that measures the significance of both physical and intellectual property rights and their protection for economic well-being. The correlation of the IPRI Rank and GDP per capita is eighty-nine percent and thereby underlines the positive relationship of effective property rights protection and income.

Page 28 of the IPRI has a paragraph about China:

"China, which ranks 45th with an IPRI score of 4.4, has a tremendously high level of copyright piracy (scores 0.1), which lowers its intellectual property rights component to 3.5. This is despite the relative mediocre perception of its patent strength and trademark protection (5 and 5.3 respectively). In addition, China does relatively well in managers' opinion of courts to uphold their property rights (6.9) and business property registration (7.8). However, the reader must consider that most IPRI's data sources do not cover rural areas, which should play a crucial role in the judgement on countries like China, India and Russia. Overall, next to the high piracy level, the difficulty to access loans, the high level of corruption and the weak existence of judicial independence give China a low overall score on the IPRI."

Read the complete report here.

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