ChinaToday
SENIOR MEMBER
When Chinese and US officials met for their twice-a-year Strategic and Economic Dialogue in Washington last week, innovation was high on the agenda. Under pressure from US businesses, Beijing had to promise it would no longer allow policies on innovation to discriminate against foreign companies.
The way China treats intellectual property rights and their creation has become one of the most contentious issues in Beijings international trade relations. A wide-ranging policy programme with the catchphrase indigenous innovation was launched in 2006, and with it Beijing intends to catapult the country, long seen as just a base for low-cost manufacturing, into a new era.
If Beijings vision comes true, the economy will be driven by technology-intensive industries, and Chinese companies will receive, rather than pay, patent and trademark royalties.
In a report for the US Chamber of Commerce published last year, James McGregor of Apco Worldwide, the lobbying firm, called Beijings plans an all-hands-on-deck call to action for the Chinese nation to roll up its sleeves and complete the mission of catching up and even surpassing the west in science and technology that began 200 years ago, when foreigners with modern weaponry and transportation technology came calling.
One way the Chinese government has tried is making ownership of local patents and brands a precondition for access to public contracts, triggering an outcry from foreign rivals against protectionism.
The government is also pressing foreign companies to set up joint ventures with local, often state-owned, enterprises. Under this scheme they must share or release proprietary technology as a precondition for wider market access a pattern that has appeared in the rail sector, in nuclear power plants, the wind turbine sector and commercial aviation.
But the controversy over these arm-twisting techniques has sometimes overshadowed the fact that China has been going in leaps and bounds to becoming an innovator: at least that is what the numbers say.
China became the fourth-largest filer of patents at the World Intellectual Property Office last year. More than 1.2m patents were filed in China last year, ahead of Japan and second only to the US, which it is forecast to overtake this year. Since 2005, China has been surpassing Europe and South Korea with the numbers of patents filed.
Basic patents those filed first in a country as opposed to those that have been filed elsewhere before are normally a good indicator for the strength of domestic innovation activity because local companies tend to file in their home market first.
In China, basic patents accounted for an average 38 per cent of total patents between 2003 and 2009, a much smaller ratio than the 52 per cent seen in Japan or the 46 per cent seen in the US and South Korea. Patent experts say the strong presence of foreign-controlled manufacturing in China explains this.
However, the picture is changing. China was the only leading patent application region that saw the proportion of basic patents rise, from 32.7 per cent in 2003 to 43.3 per cent in 2009, says Thomson Reuters.
Not all the growth, however, is a direct result of increased innovation. In line with Beijings aggressive indigenous innovation plans, many local governments have been offering to pay companies patent registration fees, greatly lowering the threshold for filing.
An additional incentive for more patents comes from Chinas patent system: It allows for registration of utility models, patents for new technical solutions that have to do with the structure or external appearance of a product. Different from invention patents, these patents will not be scrutinised very closely, and filing fees are much lower.
This has greatly impacted the quality of patents filed in China today, says a European Commission official specialising in Chinese patenting trends.
But in the development of Chinas innovation culture, utility models have their rightful place, local experts say. Typically, the adoption of petty patents such as utility models and designs is mainly based on the intention to encourage gradual innovation, which is often very important for the domestic applicants in developing countries, says Zheng Liang, a research fellow of the China institute for Science and Technology Policy, in a recent paper.
There are also signs that the quality problems might be receding. Until 2008, the majority of utility models in China were registered by individuals, seen as a signal of lower technology content. But that has since changed, with companies accounting for 60 per cent of utility model applications last year.
Up to five years ago, you would have a lot of rubbish patents filed in China, but now the ratio of invention patents is rising, and the extent of innovation is increasing too, says Chen Jihong, an intellectual property lawyer at Zhong Lun law firm
FT.com / Reports - China: Beijing looks to nation to roll up sleeves and surpass west
china is on the right path and we will get it right in the end.
The way China treats intellectual property rights and their creation has become one of the most contentious issues in Beijings international trade relations. A wide-ranging policy programme with the catchphrase indigenous innovation was launched in 2006, and with it Beijing intends to catapult the country, long seen as just a base for low-cost manufacturing, into a new era.
If Beijings vision comes true, the economy will be driven by technology-intensive industries, and Chinese companies will receive, rather than pay, patent and trademark royalties.
In a report for the US Chamber of Commerce published last year, James McGregor of Apco Worldwide, the lobbying firm, called Beijings plans an all-hands-on-deck call to action for the Chinese nation to roll up its sleeves and complete the mission of catching up and even surpassing the west in science and technology that began 200 years ago, when foreigners with modern weaponry and transportation technology came calling.
One way the Chinese government has tried is making ownership of local patents and brands a precondition for access to public contracts, triggering an outcry from foreign rivals against protectionism.
The government is also pressing foreign companies to set up joint ventures with local, often state-owned, enterprises. Under this scheme they must share or release proprietary technology as a precondition for wider market access a pattern that has appeared in the rail sector, in nuclear power plants, the wind turbine sector and commercial aviation.
But the controversy over these arm-twisting techniques has sometimes overshadowed the fact that China has been going in leaps and bounds to becoming an innovator: at least that is what the numbers say.
China became the fourth-largest filer of patents at the World Intellectual Property Office last year. More than 1.2m patents were filed in China last year, ahead of Japan and second only to the US, which it is forecast to overtake this year. Since 2005, China has been surpassing Europe and South Korea with the numbers of patents filed.
Basic patents those filed first in a country as opposed to those that have been filed elsewhere before are normally a good indicator for the strength of domestic innovation activity because local companies tend to file in their home market first.
In China, basic patents accounted for an average 38 per cent of total patents between 2003 and 2009, a much smaller ratio than the 52 per cent seen in Japan or the 46 per cent seen in the US and South Korea. Patent experts say the strong presence of foreign-controlled manufacturing in China explains this.
However, the picture is changing. China was the only leading patent application region that saw the proportion of basic patents rise, from 32.7 per cent in 2003 to 43.3 per cent in 2009, says Thomson Reuters.
Not all the growth, however, is a direct result of increased innovation. In line with Beijings aggressive indigenous innovation plans, many local governments have been offering to pay companies patent registration fees, greatly lowering the threshold for filing.
An additional incentive for more patents comes from Chinas patent system: It allows for registration of utility models, patents for new technical solutions that have to do with the structure or external appearance of a product. Different from invention patents, these patents will not be scrutinised very closely, and filing fees are much lower.
This has greatly impacted the quality of patents filed in China today, says a European Commission official specialising in Chinese patenting trends.
But in the development of Chinas innovation culture, utility models have their rightful place, local experts say. Typically, the adoption of petty patents such as utility models and designs is mainly based on the intention to encourage gradual innovation, which is often very important for the domestic applicants in developing countries, says Zheng Liang, a research fellow of the China institute for Science and Technology Policy, in a recent paper.
There are also signs that the quality problems might be receding. Until 2008, the majority of utility models in China were registered by individuals, seen as a signal of lower technology content. But that has since changed, with companies accounting for 60 per cent of utility model applications last year.
Up to five years ago, you would have a lot of rubbish patents filed in China, but now the ratio of invention patents is rising, and the extent of innovation is increasing too, says Chen Jihong, an intellectual property lawyer at Zhong Lun law firm
FT.com / Reports - China: Beijing looks to nation to roll up sleeves and surpass west
china is on the right path and we will get it right in the end.