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October 22, 2010

Chinese Junk

China, historically notorious for intellectual property theft, didn't have any law on patents until 1985. The dragon has turned: the Chinese government is now anxious to promote domestic innovation. The way things are going, China will soon be the world's top patent generator, maybe as early as next year. But that hype is bunk for junk. Like the USPTO, China's patent office is paid by patent grant, and so there is a built-in incentive to ladle junk patents. China's two-tiered patent system guarantees it.

China's two categories of patents: "invention" patents, which confer 20-year protection for examined applications, and "utility-model" patents - applications registered as patents without inspection, but which grant 10-year exclusivity.

Ten years ago a foreign company had little hope of enforcing its patents in China. Fair-minded enforcement appears to be improving. In the past year a German bus company won a $3 million case, a British concern got hot with a win over a patented kettle heating element, and a Wuhan company wrung $7 million from a Fujian company and its Japanese supplier, over a sulphur-cleaning process. But the current spurt in Chinese "utility-model" patents will doubtlessly produce howling similar to that of corporations in the U.S. in the early part of last decade, marching into court over ridiculously invalid patents, granted during the 1990s go-go years at the USPTO, where patents were handed out like candy on Halloween. China has yet to come to its own case law KSR.

In its examined "invention" patents, China at least recognizes worldwide novelty. That's more than you can say about the U.S. patent system, where up-to-date foreign innovations are ignored (see, e.g. Solvay v. Honeywell International).

Source: The Economist, the world's best news magazine.

Posted by Patent Hawk at October 22, 2010 8:55 PM | International


The first thought that occurred to me with the comment of "China's two-tiered patent system guarantees [junk patents]." was the US drive to have "regular" and "gold-plated" patents.

Would that be a fair analogy?

As far as the "more than you can say" comment, that's the way US law is written (and hews closer to the traditional sense and historical view of patents - it's not that big of a deal.

Posted by: Anon at October 23, 2010 7:41 AM

In fact, in the last decade, China government spends a lot of money in encouraging Chinese companies filing patent applications. Applicants can got government grant when an patent application was filed or granted.

Posted by: caii at October 24, 2010 4:28 AM

China has indeed made strides, but competitiveness as a global leader in innovation will hinge as much on patent quality as on rate of patent issuance. Until the country manages to effectively address the issues that have been raised in this post, China's high patent volume will not serve as an accurate indicator of innovative capability.

Posted by: patent litigation at October 25, 2010 9:37 PM