Since China became worldwide leader in patent applications in 2011, overtaking Japan, the number of its applications have soared.
The question today is not so much the volume of China’s patent filings, but their quality and the potential for them to be used for injunctions that could halt product sales, for litigation damages or for licensing.
Will China wield its issued patents, domestic and foreign, in the same way as Japan, South Korea, Germany and the U.S., principally as defensive assets? Or will it become more litigious on its own turf and elsewhere, in an effort to stifle competition and generate revenue as its economy falters?
A Moving Target
The World Intellectual Property Organization’s animated illustration of patent filings from 1995 to 2022 graphically illustrates the source and 27-year evolution of national applications worldwide, resulting in the dominance of China. Beijing has been vocal about its aim to be an “intellectual property powerhouse” and in its view volume patent and trademark filing are components in achieving that status.
Additionally, China is filing more than 10 times as many trademarks as the U.S., currently, 48.3% of those worldwide.
This data is courtesy of WIPO in Geneva. WIPO provides a graphic 60-second video showing the changes in patent applications over the years that is well worth the time to view.
Back in 1995, Japan’s applications were twice those of the U.S. It believed that a flurry of patents, many of which were weak “paper” grants, would improve its defense against U.S. enforcement. In 2022, it was China doubling U.S. patent applications on a significantly higher base. Japan is now in the third spot.
About half of the patent applications in the U.S. are comprised of foreign filings. Does this mean the U.S. and other nations should be filing more patents or simply filing more carefully?
Low Quality Patents
“If we look at China’s filings in the past decade,” says Louis Carbonneau, Founder & CEO of Tangible IP, a patent brokerage and strategy firm, “a large part of those were essentially subsidized by the Chinese government who would refund most of the fees associated with those.
“This led to a lot of low quality patents around the world, including in the U.S. With the current legal environment in the U.S., most patents today, even the good ones, are potentially on the chopping block because of the Patent Trial and Appeal Board or the 101 (Alice) doctrine.
“The right strategy is certainly not to race to the bottom and file as many as possible but rather to be more surgical, diversify filings in many countries – especially where an injunction is still available – and maintain patent families open as the law keeps impacting the way patents are drafted and prosecuted.”
Rule of law is essential in IP nations. China’s inconsistency in applying IP laws, patent quality and licensing may ultimately undermine its achievements in technology and securing patents.
China today accounts for almost half of the patent applications and half of the trademark filings worldwide. Fewer than about 20% of patent filers there are foreign; approximately 80% or more are in Germany, France and the UK.
Data and image sources: wipo.org
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