Pandemic Can’t Stop the Growth of IP Filings in China

China saw an increase in patent filings, more efficient intellectual property services, and stronger IP protection last year despite the novel coronavirus outbreak. The continued growth of foreign IP applications shows the confidence of foreign investors in the Chinese market as well as China’s progress in IP protection and the business environment.

 

Japan, the United States and Germany topped the list of the most patent filings in China last year, according to China’s National Intellectual Property Administration (NIPA).

The country granted 530,000 patents for inventions in 2020. It brought the total number of valid invention patents on the Chinese mainland to 2.21 million, said Hu Wenhui, spokesman for the National Intellectual Property Administration.

According to China Daily, since 2019, China has promulgated a series of laws, regulations and IP protection guidelines, including the Foreign Investment Law, to create a fairer, more transparent and predictable business environment for foreign investors.

“This continued growth of foreign IP applications shows the confidence of foreign investors in the Chinese market as well as China’s progress in IP protection and business environment,” said Dong Tao, a law professor at Beijing International Studies University.

For the third consecutive year, China-based telecoms giant Huawei Technologies, with 4,411 published PCT applications, was the top corporate filer in 2019. It was followed by:

 

  • Mitsubishi Electric Corp. of Japan (2,661)
  • Samsung Electronics of the Republic of Korea (2,334)
  • Qualcomm Inc. of the U.S. (2,127)
  • Guang Dong Oppo Mobile Telecommunications of China (1,927)

 

Filings are supported by generous subsidies provided by local governments.  For example, Shanghai city provides 50,000 RMB in subsidies (~$7,100 USD) for each foreign patent granted (up to five) through a PCT application.  Further, the Pudong District of Shanghai and the Zhangjiang Hi-Tech Park each provided 100,000 RMB in rewards for foreign patent grants (the policies have since been removed from their respective websites).

 

WIPO’s head, Francis Gurry, told a news conference China’s success was “down to a very deliberate strategy on the part of Chinese leadership to advance innovation and to make the country a country whose economy operates at a higher level of value.

The “extraordinary volume” of IP applications reflects the importance of intellectual property in the contemporary economy, he said. IP applications are mainly driven by innovation and globalization, by the policy focus on innovation around the world, and the fact that innovation is increasingly the battleground for economic advantage, he explained.

Technology and Innovation in China’s Path to 2035

 

Figures from the China Semiconductor Industry Association show that China’s IC industry recorded double-digit growth in the first nine months of 2020. The industry’s sales topped 590.5 billion yuan ($91 billion) during the period, up 16.9 percent year-on-year. More than 40 percent of sales came from the IC design sector.

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A Complete Guideline on China’s Patent Prosecution Highway Agreement

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Foreign investors can register IP in China for trademarks, patents, designs, and copyright. However, each of these is administered by a different government body. The primary law in China pertains to copyright. This protects copyrighted works of foreigners that are either first published in China or in countries that are signatories to the World Intellectual Property Organization (WIPO) copyright protection treaty. The patent office that made the preliminary examination conclusion shall have a PPH agreement with SIPO, which is to say that an applicant could only file a PPH request based on the above bi-lateral or multi-lateral agreement.

 

Patent Prosecution Highway

The PPH allows for expedited examination of a Chinese application when a corresponding application in a participating patent office has at least one allowable/patentable claim. China has several signed agreements with various patent offices and one needs not to be a resident of the country of the corresponding patent office. For example, an American applicant with an allowed Norwegian patent application can request to participate in the PPH in China based on the Norwegian patent application.

 

The Filing Process of PPH

China currently has 20 PPH programs with almost all the major patent offices in the world, including the most often used IP5 PPH program among China, the United States, Europe, Japan, and Korea. It also accepts a PPH request based on the positive Written Opinion or International Preliminary Examination Report made by an International Search Authority or Preliminary Examination Authority. Applicants can file a request under the SIPO-Office of First Filing (“OFF”) PPH agreement based on an OFF application if the SIPO application is (a) a direct entry under the Paris Convention or a PCT national phase application, and also (b) has at least one or more claims found to be allowable by the OFF. The SIPO application must have been published, the request for examination must have been made and the SIPO must not yet have begun examination at the time of the PPH request.

PPH offers a lot of benefits to patent applicants such as

  • Accelerated Examination
  • Enhanced Certainty
  • Reduced Prosecution Cost
  • Higher Granting Rates

 

The PPH will potentially reduce costs by minimizing applicants’ attorneys’ fees by reducing the number of office actions and the associated cost to translate and respond to the same. Moreover, speaking of the overall benefit to society, PPH provides an opportunity for participating offices to mutually leverage the examining and searching resources of each other, increase efficiency, reduce repetitive works, improve the patent quality, and realize the effective and sufficient utilization of global examination resources.

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