Data on Chinese patent applications and grants suggests growing gap between political rhetoric and current realities

The GOP platform mentions China 15 times, including these passages:

Our serious trade disputes, especially China’s failure to enforce international standards for the protection of intellectual property and copyrights, as well as its manipulation of its currency, call for a firm response from a new Republican Administration. . .

Some governments have used a variety of unfair means to limit American access to their markets while stealing our designs, patents, brands, know-how, and technology—the “intellectual property” that drives innovation. The chief offender is China . .

I'm sure there are plenty of valid complaints about China's enforcement of patents and copyrights, but of course, you can make complaints about any country's enforcement policies, including the US, where copyright infringement is extensive, and patents are routinely ignored in many sectors of the economy, including software (and often for the best, given the nature of many granted patents). But more important, the GOP really misses the point about an important fact. China has dramatically changed its approach to the patent system, and is on track to be the number one owner of patents. As noted by Joff Wild last year:

The US does not grant more patents than anywhere else. China does. By a country mile. In 2010, SIPO made over 800,000 grants, the USPTO made 219,614 grants. Of course, around 85% of those Chinese awards were for unexamined design and utility patents. . . In any case, as the Chinese economy grows and SIPO hires more examiners, soon enough it will supersede the USPTO in examined grants as well.

This dramatic change was discussed last week in an August 30 Washington Post story by Jia Lynn Yang:

China’s central patent office has quickly become the busiest in the world. Last year, for the first time, there were more domestic patent applications filed in China than in any other country, including Japan and the United States.

According to the World Intellectual Property Organization (WIPO), there are now about three times as many domestic patent applications in China than foreign patent applications. In the United States, foreign patent applications now exceed domestic patent applications.*

Patent applications, 2010
Country Foreign Domestic
US 243,249 241,977
China 98,111 293,066

The looming challenge for the U.S. will not be Chinese firms infringing U.S. patents, but U.S. firms infringing Chinese and other foreign owned patents.

This might not make for a conventent political speeches in 2012, but at some point political figures will have to address the scenario described by Peter Yu in the Washington Post story:

Analysts say foreign firms can expect to see many more lawsuits coming from China, turning the country into a new front in the global patent wars.

“Think about a U.S. firm that produces all its products in China,” said Peter Yu, a professor at Drake University Law School who has also taught intellectual property law in China. “If a Chinese firm is able to get an injunction over the production of that U.S. firm, the firm would all of a sudden no longer have any products.”

Looking forward, the rhetoric about the need for stronger and stronger enforcement of patent rights, including hefty damages and injunctions will seem outdated and under-analysed, on a topic that really matters.


China_885x613.png
Patent Applications, China Patent Office
Year Resident Non resident
1990 5,832 4,305
1991 7,372 4,051
1992 10,022 4,387
1993 12,084 7,534
1994 11,191 7,876
1995 10,011 8,688
1996 11,628 11,114
1997 12,672 12,102
1998 13,751 33,645
1999 15,626 34,418
2000 25,346 26,560
2001 30,038 33,412
2002 39,806 40,426
2003 56,769 48,548
2004 65,786 64,598
2005 93,485 79,842
2006 122,318 88,183
2007 153,060 92,101
2008 194,579 95,259
2009 229,096 85,508
2010 293,066 98,111

* In 2011, the USPTO reported 255,832 foreign patent applications and 247,750 domestic applications.