China hit an impressive but limited milestone in intellectual property.
A new report from the World Intellectual Property Organization (WIPO) showed the China patent office received more than one million applications in 2015. However, 96% of those filings were exclusive to the State Intellectual Property Office of the People’s Republic of China (SIPO) with only 4% being filed elsewhere as well.
What this means is that the 96%, if and when they become issued patents, will have no weight outside of China. One would expect Chinese companies also to file in the U.S. and Europe given the litigious nature of companies in these areas who routinely claim the Chinese are copying their intellectual property. The incremental cost of filing, at least in the U.S., is not very high.
I cannot reconcile this lack of filing diversity other than to think that China will itself have explosive IP licensing and litigation in the near future, much as the U.S. and to a lesser degree Europe has now.
Patents are valuable as economic swords and shields. They can be asserted against alleged IP infringers, and they can be used to offset claims of infringement by countersuits. Patents can be used as trading currency in license negotiations to offset otherwise cash payments.
However, patents filed exclusively with the SIPO are really of no value outside of China. So, unless they are used in China, they really aren’t useful, other than to memorialize the research and development behind them. The data behind the report indicates a lack of attention of the Chinese to the rest of the world, be it by oversight or by design.
The WIPO report centers on the “strong growth” and the “new record” for China as the world leader for patent applications in 2015. Although the press release characterizes the increase in Chinese filings as “strong growth,” I would call it explosive growth.
Otherwise the report and a press release based on it are light on conclusions but very heavy on raw data. According to the press release, computer technology (7.9% of the total) saw the highest percentage of published patent applications worldwide, followed by electrical machinery (7.3%) and digital communication (4.9%).
--Rich Belgard has been in the engineering and computer industry for over 40 years, 20+ of which have involved IP and IP litigation.
Filings at China's patent office exploded over the last five years. (Image: WIPO)