Thomson Reuters Report — China Patents Looking Good

December 10, 2008

This one’s a bit geeky, sorry about that.

Just read the patent report by Thomson Reuters. Some problems with the content, but well worth the read. Here’s the gist regarding China:

The Scientific business of Thomson Reuters today published World IP Today: "Patented in China — The Present and Future State of Innovation in China" which looks at current patent trends and speculates how the world of patent information will look in five years. Patent volumes and trends are explored, as well as the underlying causes of increased innovation in China, including economic and government policy factors. 

"China has become the third largest patent office in the world in a very short space of time and, if current trends continue, will dominate the patent information landscape by 2012," said Dr. Eve Zhou, co-author of the report and member of the Intellectual Property Consulting Services group at the Scientific business of Thomson Reuters. "Although the predictions of future patent application volume by the five major patent offices are purely mathematical exercises, the inescapable fact is that Chinese patents are here to stay and will continue to evolve in prominence."

As the report states, this prediction is purely a mathematical exercise (a linear extrapolation, I think), so keep that in mind. China is definitely spending money on patent filings, R&D, and education, and is in a better position to increase that expenditure than a lot of other countries these days.

However, as I’ve said many times before, that doesn’t necessarily lead to a one-for-one increase in innovation. You can incentivize innovation, but you can never be sure it will end up actually happening.

A couple of other complexities on this topic that make this prediction problematic.

1. Junk patents — utility model and design patents do not go through substantive examination in China, and a lot of them are registered that lack novelty or have other defects. Pumps up the filing numbers, so these can be misleading. The report takes this into account in some ways, but not in others.

2. Foreign vs. domestic entities filing in China — it was never made clear how the report treated this. As more and more R&D is done in China, this is a big issue. By the way, the report comments in its conclusion about the first filing requirement in the new patent law but gets it wrong. That provision was dropped in the latest draft.

Anyway, the full report is worth a few minutes if you’re an IP geek. There is no arguing with the fact that patent filings have increased dramatically here in the past few years, that the government is pushing innovation in a determined fashion, and that the numbers will continue to rise in the future. I would guess at a slower rate that the report’s extrapolation predicts, but we’ll see.