Last week we held a webinar with Managing IP on the topic of China IP Trends: The Shift in Patent Filing. We were delighted to be joined by Justin Simpson, patent attorney and founder of inovia, and Xia Zheng, founder and president of AFD China. As experts in their field, they offered a great insight into filing trends in China as well as advice for those looking to file. Below you can read the answers from the Q+A segment of the webinar where Justin Simpson asked Xia Zheng questions.
Question 1 – What’s driving the fast increase in filing volumes coming out of China? Is it pure innovation from large companies like ZTE and Huawei? Is it a push from the CN government?
It is a result of years’ implementation of the National Intellectual Property Strategy with the vision to build China into a nation with fairly high level of IP creation, utilization, protection and administration. Chinese governments of different levels encourage innovation and set up policy to support it. For example, governments provide subsidies/reimbursements for overseas filing.
In parallel, it is a fact that large companies became more aware of the importance seeking IP protection aboard, especially when they have launched products and used technologies out of China. Companies like ZTE and Huawei have done it for years and started to take IP not just as a demonstration of its capability but a powerful tool to create barriers for competitors.
We also noted that medium- and small-sized companies have started to grow IP portfolio outside of China.
Question 2 – With such large numbers of filings it’s easy to assume they are incremental/low quality inventions. What’s your view?
I don’t think it stands. Yes, some companies may want to have a beautiful number to show out. But they are minority. Companies are running a business; they will pursue cost-effectiveness in each and every aspect. So why paying big money for low quality stuff? The filing fees are not cheap, especially in the developed countries. I don’t think any business will waste efforts and come to nothing.
Yet another angle, going through the rules of some of the government policies concerning patent subsidies and financial incentives, you will find clauses asking the candidate companies to prove that their patent applications have novelty and inventiveness, to prove that their patents have commercial values, for example the companies have been using them, have licensed them to others, or making profits from exploring them.
Question 3 – Large Japanese companies often file multiple applications for a single innovation to bump up their stats. Is that a practice you’ve seen with Chinese applicants?
It is not a valid strategy in the long term. Again, a business stands on cost-effectiveness. Unless the number will help it get something, I don’t think it is a common conduct among the top filers. Quota is usually a temporary or short-term conduction.
Big companies, as you mentioned, ZTE and Huawei, are familiar with IP practice. They have professional IP teams; they have long-term IP strategies; and they set clear direction and aims. They monitor and evaluate their technology from the date it was created, and prioritize the technologies when considering seeking filings and protections. Such conductions must be for particular reasons.
Question 4 – What tips do you have for non-Chinese applicants in light of these increasing volumes?
It sounds like a question to finish up our presentation today. My answers will be – go ahead filing in China. File as early as possible. And craft your strategy as comprehensive as possible, seeking multi-dimensional protection by making good use of the system – which Justin would talk about in the next slides; generating appropriate, effective, and well-covered scope for your technology, brand and business, etc.
Specifically with respect to patent practice, please keep in mind that every jurisdiction has its own and independent requirements for filing and examination. For example, China has different requirements on non-prejudicial disclosure comparing to the US, you need to pay attention if making a disclosure before filing; China does not have continuation/continuation in part applications, so comprehensive scope needs to be reflected in the original application documents; invention substantially conceived or created in China must go through secrecy review before filing aboard, etc.
To save time and energy, it is advised to work with local experts. It won’t be a shame to turn to professionals – like RWS and AFD – for help.
Is it more important than ever to file into China?
The answer is positive. Patent is an indicator of innovation and innovation requires resources. All will fundamentally be attributed to finance. China has become one of the biggest markets, and is taking actual steps to protect intellectual properties. Filing in China will become as at least as important as filing in the US, in Europe, in Japan, and in Korea. Why not catching up with the trend, taking advantage of China’s improvement on IP practice and protection?
Should non-Chinese firms be doing more patent searching of Chinese databases?
After the restructure earlier this year, the SIPO has become the biggest IP office in the world. No doubt it will have more influence on IP issues. And as Chinese filings grow at a fast speed, documents from China will and may have already become an unignorable part for patent search. Since most jurisdictions adopt absolute novelty criteria, searching in Chinese databases would be a help.