Experts critique China's patent filing system

NEW YORK - Experts in the United States said they applaud China's plan to promote innovation, but they warn against filing patents for the sake of hitting a target.

China's patent office, known as the State Intellectual Property Office, said among the specific targets to be attained by 2015, one is increasing the number of patent filings to 2 million annually.

Experts are concerned that the government's incentives - such as giving tenure to professors and granting hukou (residence permit) to workers and students - may spur individuals and companies to file shoddy patents. Monetary rewards by agencies also may encourage local officers to approve patents quicker.

David J. Kappos, director of the United States Patent and Trademark Office, in an interview with the New York Times, called the target full of "mind-blowing numbers".

The Times reported that about 300,000 applications for patents were filed in China in 2009. Reuters forecasted that China would surpass the US to become the world's largest publisher of patents this year.

Although the patent numbers are "ambitious", the Chinese government has a successful history of hitting targets, said Nathaniel Ahrens, president of Golden Road Ventures Ltd, a business development and advisory firm that provides support for projects in China.

While he acknowledged that the quantity of patents is "not without meaning", he said that filing patents regardless of worth and value will not lead to economic growth.

In China, there are three types of patents - invention, design and utility-model. And they are easy to obtain in China, especially for design patents and utility-model patents, said an attorney at Jones Day in Shanghai who would only go by the name of Chen.

The total number of patent filings in China grew by 26 percent each year between 2003 and 2009, according to a report from Reuters.

In the last two years, Huawei, a leading Chinese global telecommunications solutions provider, has become the world's top firm in international patent filings.

Chen, who represents companies in defending infringement lawsuits and licensing technologies in China and in the US, said until the market or competitors recognize the patent's value in terms of royalty, one has not achieved the real measurement of a patent.

"The real value of a patent is that you can get your competitors to pay you a lot of money to obtain a license to practice your patent. If people do not get a license from you, you can sue them in court for infringement. In the US, patents are valuable because people can put millions of dollars to it."

It is rare for a Chinese company to bring a US company to court for patent infringement. Chen said it was encouraging when a Chinese firm, Netac Technology, which was granted a patent for a USB flash drive, sued PNY Technologies, based in the US, for infringement in 2006.

"After the Netac case, we have not seen any lawsuits filed against a company in the US. What does that tell you? One indication is that the patents are not strong enough for them to sue for infringement," Chen said.

The real issue is, if China is committed to issuing 2 million patents, it is creating a plan to increase innovation, said Robert Atkinson, president of Information Technology and Innovation Foundation, a Washington DC-based technology policy think tank.

Atkinson said it is important to have a good reviewing process built into the patent system.

"In the US, we have a very good patent system, but mistakes are made still," he said. "Sometimes, they issue a patent that someone else deserves or has a right to. One reason why the patent system in the US works is because people are able to challenge the law. Therefore, it is important to be able to challenge patent decisions and to have your side heard."

Chen agreed that the way to encourage high quality patents is to have a better enforcement system in order to stop infringement activities, and for the court to grant significant damage awards to high quality patent owners who sue for infringement.

China Daily

(China Daily 01/25/2011 page13)