Chinese companies may have filed the most patents globally last year, but that doesnโt necessarily equate to breakthroughs in innovation, said Ryan McCarthy, the principal and chief representative at the Shenzhen office of intellectual property (IP) law firm Fish & Richardson. He called for efforts to boost the quality of these filings.
โWhen you see more patents filings, thatโs typically a very clear sign of innovation,โ he told TechNode in an interview at TechCrunch Shenzhen 2019 on Monday. โBut the number of patents that are actually issued is probably a better sign of quality.โ
The National Intellectual Property Administration of China, the countryโs top patent office, received some 1.54 million patent applications in 2018, accounting for nearly half of total filings globally, according to World Intellectual Property Organization (WIPO) report last month.
Chinaโs rise to become top patent-filer worldwide coincides with the countryโs push for complete technology self-reliance amid its ongoing trade conflict with the US.
Subsidy push
McCarthy said a lot of patents that were filed locally by Chinese firms purely to qualify for government subsidies.
Among the vast amount of patents filed, only around 25% of those from local firms gained patent office approval. The approval rate for non-Chinese companies in the country is about 50% to 60%.
โThere is a very significant quality issue [with those filings],โ he said. โMy impression of the reason why there are so many filings is that the Chinese government, from what Iโve seen, has been really promoting intellectual property.โ
Forced technology transfer by Chinese companies and governments was a key sticking point in the trade negotiations between China and the US, with the US asking for better protection of American IP in China.
McCarthy, however, deems the transfer of technologies to be โa cost of doing businessโ in China because they can choose not to create joint ventures with local partners and find other ways to enter the market.
โBut again, they are still here doing business, and thatโs because they decided that itโs worth that cost to continue to do business,โ he said.
Late last month, one of Chinaโs vice-commerce ministers promised that the country would no longer force foreign firms to transfer technologies to access the market. Beijing pledges to bar the use of โadministrative toolsโ to making companies hand over trade secrets.
โBut if that is changing, where there is not any type of required technology transfer, I think thatโs going to improve things in terms of companies from outside of China being more encouraged to come into China,โ he said.
