China is Dominating in Patents: Thomson Reuters Study

Posted by on Dec 9, 2014 in Blog | 0 comments

The long-chanted mantra among Western skeptics, naysayers and Sinophobes is: “China can copy and produce but cannot innovate”.  Well, according to Thomson Reuters’ intellectual property (IP)  analysis division, Western dominance in that area is quickly coming to an end and China’s has a grand strategy in place to become a dominant player in many fields by the end of the decade.

Recall a book a couple years back argued that contrary to Western perceptions, China is getting good at ‘small’ (minor) innovations but still has a ways to go in terms of ‘game-changing’ innovations/inventions like Apple’s iPhone.  That’s currently quite true in the hyper-competitive Chinese marketplace where Chinese companies battle it out to satisfy changing consumer tastes and in setting trends.  Within a few years, the kinks in China’s IP development will be steadily hammered out and we’ll be seeing grand Chinese innovations that will surely transform consumer tastes around the world.

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Key points outlined in the analysis include:

  • China Is Undisputed Patent Leader: China continues to overshadow other countries in published patent applications, publishing 629,612 patents in 2013, over 200,000 more than the U.S. This push is driven by a five-year plan in which the country has set out to reach two million applications for patents for inventions, utility models and designs by 2015.
  • Pharma Driving Patenting Boom, But Quality of IP is Suspect: China has nearly 80 percent of world share in patents for alkaloid/plant extracts, and around 60 percent of global share of pharmaceutical activity, general patents. However, these filings are held by thousands of individual inventors with a handful of patents each, rather than portfolios maintained by universities or corporate entities that would be seen stateside. As a result, the quality of the IP is likely to be unstable.
  • Domestic Innovation on the Rise, Foreign Filing Fails to Keep Up: Overall, 80 percent of China’s patents were filed domestically in 2013, leaving China’s foreign growth flat. The number of inventions filed abroad from China has grown from 13,005 in 2008 to 33,222 in 2013, however overall patenting has grown from 239,663 in 2008 to 629,612 in 2013, therefore the proportion has remained the same at 5.3 percent.
  • Burgeoning Chinese Multinationals: While China as a whole is doing substantially less international patent filing than other regions of the world, a few leaders have emerged in the global patent landscape, including Huawei, ZTE Corp, Shenzhen Huaxing Optoelectronic, Alibaba Group, BOE Technology Group, Lenovo, Tencent, BYD, SMIC and Sany. Huawei was named to the Thomson Reuters 2014 Top 100 Global Innovators list last month.
  • Planning the Next Five Years: The Chinese National Patent Development Strategy highlights the country’s plans through 2020, including seven strategic industries positioned for growth: biotechnology, alternative energy, clean energy vehicles, energy conservation, high-end equipment manufacturing, broadband infrastructure, and high-end semiconductors.

“Over the past decade, China has asserted itself as one of the preeminent players in intellectual property activity,” said Bob Stembridge, senior patent analyst, Thomson Reuters IP & Science. “By developing an IP strategy that accounts for China’s continued foray into the innovation landscape, firms can glean an advantage in this emerging market.”

The new Thomson Reuters study Chinese Corporate Trends and Globalization for IP can be downloaded from:  http://ip.thomsonreuters.com/sites/default/files/chinas-innovation-quotient.pdf