Patent applications boom in China

Laws on intellectual property rights (IPR) introduced exactly 20 years ago are being credited for a mushrooming growth in patent applications in China, according to the State Intellectual Property Office (SIPO).

The past four years have seen a million patent applications lodged, equivalent to the number tabled from 1985 to 2000. SIPO received 308,487 patent applications in 2003 alone, an increase of more than 20 per cent over the previous year. In sharp contrast, 1985 saw only 14,372.

The central government, keen to see an even greater increase in the number of patents in China, is now drafting a national strategy on IPR in order both to enhance the competitiveness of Chinese businesses in the global economy, and meet the terms of its membership of the World Trade Organisation (WTO).

“The rapid growth shows that awareness of the need for IPR protection has greatly increased among the Chinese people, based on an acknowledgement that patent protection spurs innovation,” said SIPO commissioner, Wang Jingchuan.

Wang released the latest figures at a seminar last Friday (19 March) organised jointly by his office and the National People’s Congress to mark the 20th anniversary of the implementation of the Patent Law. He said that the Chinese government was determined to enforce IPR protection in a bid to improve the environment for the country’s sustained economic development.

But Wang also admitted that China’s system of patent applications and IPR protection was still in its “early stages”, and had failed to keep pace with the country’s booming manufacturing industries.

Furthermore, China still lagged far behind the world’s major industrial countries. Fewer than a thousand Chinese patent applications had been lodged with the World Intellectual Property Organisation by the end of last year, compared with 44,609 from the United States, 13,531 from Japan and 2,552 from South Korea. “The overall situation does not look good,” said Wang.

Despite this, some Chinese companies have been able to use their ownership of patent rights to become competitive in the international market. Largely because it owns more than 200 domestic and international patents, for example, the Chinese high-tech company Vimicro has been able to break the longstanding foreign dominance in the digital sector.

After five years of development, the China-made Xingguang digital multimedia central processing unit chip currently makes up more than 40 per cent of the world market and 80 per cent of Chinese sales, according to Zhang Qi, director of the Electronic Information Administration Department at the Ministry of Information Industry.

Wang says that the new IPR strategy being drawn up by the government aims to support the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) that was signed by China after it joined the WTO. The strategy draws on IPR practices in Japan and the United States.

Wang added that it would be up to local and regional agencies to develop ways of encouraging inventors to set up small and medium-sized high-tech enterprises based on their patents. The strategy will also urge domestic companies to apply for foreign patents on promising inventions.

Despite the encouragement being given to patent applications, Chinese companies are increasingly suffering from a lack of patented technologies, reducing their competitiveness in the international marketplace.

The majority of obstacles to international trade currently faced by Chinese companies relate to patent issues, says Zheng Chengsi, a noted expert on intellectual property law and a member of the Law Committee of the National People’s Congress.

“We need domestic businesses both to become more aware of the value of holding IPR, and to defend their legal interests if these are threatened,” Zheng said.