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Life after the Chinese Patent Tsunami
Gert Frackenpohl, Lighthouse IP
II-PIC, Bangalore, 2.-3. Nov. 2017
CONTENT
– The Chinese Patent Tsunami
– Deeper look into the volumes
– Challenges (fake products, China and IP)
- Innovation opportunities
- Innovation in the global landscape
- So now what
The Chinese Patent Tsunami
2017
0
200000
400000
600000
800000
1000000
1200000
1 2 3 4 5 6 7 8 9 10 11 12 13
Chinese Patent Publication volume 2005-2016
From a small authority that started in 1985 publishing patents to one of the leading publishing Offices in 2016:
- In 1990 the Chinese patent office published 9,739 patent applications
- In 2016 the Chinese patent office published 1,047,553 patent applications
Chinese development
IP applications / WorldWIPO Statistics Database
IP applications / WorldWIPO Statistics Database
Patent applications / 10 POWIPO Statistics Database
Patent applications / TOP 11WIPO Statistics Database
Utility Model applications / 9 POWIPO Statistics Database
Utility Model applications / TOP 10WIPO Statistics Database
IP applications / WorldNon- / ResidentsWIPO Statistics Database
Patent applications / WorldDirect / PCTWIPO Statistics Database
Chinese patent publications
0
200000
400000
600000
800000
1000000
1200000
1 2 3 4 5 6 7 8 9 10 11 12 13
Chinese Patent Publication volume 2005-2016
Non- / ResidentWIPO Statistics Database
Resident and abroadWIPO Statistics Database
Chinese applicants abroad
USA EPO
Japan
India
Korea
AustraliaBrazil
WIPO Statistics Database
Applicant’s originWIPO Statistics Database
CN
US
JP
Applicant’s origin from abroadWIPO Statistics Database
JP
USDE
KR
Applicant’s origin via PCTWIPO Statistics Database
JP
DE
US
KR
– Politically driven• Country wanted to move from being the worlds factory
- Business support who files patents
- Law changed for international filings, obligatory to first file in China
- World only looks at quantity not at quality- are all patents really innovative
- Financial Times writes that China is one of the most innovative countries in the world
- Based on volume China is the # 1 in the world
- Many patents do not get filed outside China
- No innovation leadership, but developing
Chinese background
CHALLENGES (fake products, China and IP)
– Approximately 20% of the Chinese GDP is directly or indirectly depending on fake products• Sometimes done and has to be accepted
– Volkswagen partner setup a new factory to create exact copies of DSG gearboxes
– Unemployment would be an issue
- Courts still benefit Chinese companies- Example of North Face
- Fined RMB 50,000 this is EUR 6,500
- Stop production in 6 months
- However, changes are coming
- Judges being trained by German IP Judges
- Slowly cultural awareness of the importance of IP
CHINESE ALWAYS DO SOMETHING FOR A REASON
– Example – Investment in the port of Piraeus, Greece
• First and closest port of entry
• EU tax and customs zone
• No checks
• Within 12 months EU flooded with fake products
– China will continue to develop using IP as a way of protecting its change
– Additionally this will make it more challenging for foreign companies to enter the Chinese market
– However, if you want to go into China, you need to focus on IP
INNOVATION LINKED TO GDP DEVELOPMENT (source WIPO)
INNOVATION LINKED TO GDP DEVELOPMENT (source WIPO)
SO NOT COMPLETELY INFLATED
– German GDP went from 3091 in 2001 to 3586 in 2015
– German patents went from 137,000 in 2001 to 175,000 in 2015
– China GDP went from 5029 in 2001 to 18,374 in 2015
– China patents went from 31,000 in 2001 to 1 million in 2015
- Ratio for both countries is approx. 20 GDP/Patents
INNOVATION OPPORTUNITIES
– Principle of a patent family
– If Chinese patents are not filed elsewhere they can be used without limitation
- Protection is not possible
- Also applies to all other countries
- New ideas should be monitored, and may create simple ways to innovate
- Vast collection of ideas described in detail that can be applied
- Look at patents in other countries, before thinking of exporting
INNOVATION IN THE GLOBAL IP LANDSCAPE
– Many SME’s not aware of IP rights (and obligations)
– When a company states “Patent Pending”
- Even foreign companies protect innovation in your home market
- If you manufacture you should be aware and monitor what is being protected
- If you feel an application is trying to protect your product, you need to object
- If companies file patents in other markets protecting your (non-patented) innovations, you should still consider objecting
SO NOW WHAT?
– Chinese Tsunami of patent publications did not change the IP world in general and is going on
– Innovation can still be claimed
– Patents lead to patents
– Even if you are a small business enterprise only operating in a local market, still look at patents (even for trading companies)
- Secure legal position in own country (are you really licensing something?)
- Setup a (simple) patent strategy
- Companies with strong patent focus (strategically) are statistically more successful
QUESTIONS?
• Thank you very much for your attention
• Please visit the Lighthouse IP booth in the exhibition area