Non-market factors, such as government mandates and subsidies, caused a rapid increase in patent filings in and from China, according to a just-released report from the U.S. Patent and Trademark Office (USPTO).
In 2019, 1.5 million utility patent applications and 7.8 million trademark applications were filed in China, accounting for nearly half of global totals. In the same year, China also knocked the United States from the top spot in international patent filing for the first time.
Behind the rapid growing number of patent filings, the Chinese government, according to the report, plays a big role with government mandates and subsides of various types. The Chinese government establishes patenting targets for state-owned enterprises, universities, public research institutions, and even government officials. The report gives an example that “on March 11, 2020, China directed its 128 centrally owned enterprises to double their holdings of U.S. and other foreign patents by 2025.”
The report also points out that “all 31 provinces/municipalities in mainland China have a patent subsidy scheme.” For example, the Beijing and Shanghai city governments subsidize about $7,500 for each international patent filing.
Since the Chinese government mandates the number, rather than quality, of the patent filings, and since big government subsidies eventually turns patent filing itself into a lucrative business, a large number of patent applications with low quality have fueled the explosion in the quantity of patent filings in and from China in recent years.
While the Chinese government’s behavior is unusual and hard to understand for most observers, they are actually common sense for people who know how the Chinese government works. Not having been truly elected by the Chinese people, the Chinese regime has been eager to prove its legitimacy. Economic and technical achievements are some of the most important tools the regime has been using to demonstrate its leadership and its legitimacy to govern. The large number of patent filings can be portrayed, without huge difficulty by a government propaganda department, to be a big technical achievement. It also helps fend off the accusations of intellectual property (IP) theft alleged by western countries.
Andrei Iancu, USPTO director, in a speech delivered on Jan. 19 at a U.S. Chamber of Commerce event, called to “put an end to state-sponsored theft of IP.” He emphasized the importance of USPTO efforts “to create a broad coalition of partners to elect new, pro-innovation leadership at the World Intellectual Property Organization (WIPO) last year.”Last year, Daren Tang, head of Singapore’s IP office, was eventually elected as WIPO’s director-general, following a U.S. campaign against a Chinese candidate.
