In the course of 20 years, China has slowly developed to become the fifth largest patent systems in the world – what is next and what is missing for China to become the innovative hub it wants to be?

Statistics recently revealed by the EPO show that domestic patent application in China have, in the past 5 years, outpaced the number foreign application. According to EPO statistics in 2009 the foreign patent applications represented 10.1% of the total applications with only 0.6% applications being done by all foreign countries on utility models (Table 1.)

Source: EPO statistics

Not only has the number of domestically filed and granted patents exceeded that of foreign applications, but China is solely continuing to solidify its position as an innovative force on international markets through increasing overseas applications. A confirmation of the commitment of the Chinese government to push forward and establish China as an innovative hub can be seen in the recent 10 year patent plan which provides significant financial stimulus for companies engaging on the global market. These take the form of fairly accessible subsidies for overseas patent applications and significant corporate tax reductions for companies which can gain the ‘high tech status’.

The results so far and what can we expect in the future.
2009 has brought with it the first year in which Chinese patent applications in Europe, US and Japan outnumbered the application made by the same countries in China. (Table 2). A recent study conducted by ManagingIntellectual Property among the participants at China –International Forum shows that this trend will grow. Almost a quarter of the responders are planning to file at least 10 patents oversees whithin the next 12 months and invest considerablly in developing their internal IP departments.

So, what is missing?
The general sentiment transmited by the MIP study is an essential need for Chinse companies to build up IP knowledge internally and to learn how demonstrate value the of their IP to the Board. To this I would add the need to start thinking about IP use in a creative manner – to espcape from the simple defensive useof patents and adopt versatile stratgies that leverage the power of different intellecual asssets and include tools and channels for building long term realtionsphs with clients and parteners. This will be key for gaining market market control in western countries.

[Image credit: Steve Webel]