Dr. Jacqueline Lui and Ms. Yolanda Wang, colleagues at Eagle IP Ltd., were kind enough to share a guest article comparing Invention patents and Utility model patents in China. For convenience, they also included a useful table summarizing the differences between the two processes:
There are two types of patent protection in China. Invention patents have a term of 20 years and may be granted for both methods and products. Utility model patents (similar to a petty patent) may be granted in China for technical solutions that relate to shapes or structures, and have a term of 10 years from the date of filing. Utility model (UM) applications are subjected only to novelty assessment and formality examination. Invention patent applications are subjected to search and examination similar to those conducted in other major patent offices in the world and it will take approximately 3 to 5 years to complete prosecution.
Earlier this week, several members of the inovia team attended the inaugural IP Business Congress (IPBC) China event in Beijing. The IPBC is hosted by Intellectual Asset Management magazine and inovia has attended previous IPBC events in San Francisco and Lisbon. The IPBC China attracted over 500 attendees from all over the world, representing law firms, corporate IP departments, IP service providers, and IP management firms.
Joff Wild, Editor of IAM, gave the opening welcome and the event kicked off with a discussion of “Building IP value,” led by speakers from SanDisk, Novartis Pharma AG, Nokia, the Transpacific IP Group Limited, and Alibaba Group. China is an important market from both a business and IP perspective; PCT applications from China saw 33.4% growth in 2011 with 16,406 applications filed. In this session, the speakers discussed the value of IP from a business, legal and branding perspective, and also discussed the issue of patent quality versus quantity.
“IP has been so critical in our sector for a long time, but the base by which we have monetized IP has changed,” shared Paul Melin, Chief IP office of Nokia. “Monetization is more central now, making our IP more visible to investors.”
Many speakers commented that in order to create IP value, there must be company-wide buy-in.
“It’s not inexpensive to create a meaningful portfolio,” Jim Brelsford, Chief Legal Officer and Senior Vice President of IP Licensing for SanDisk commented. “In the beginning you need to determine where you need protection and you need to consider the product pipeline. You don’t always know which patent is going to add value down the road, so you need broad buy-in.”
Roger Shang, Chief Patent and Technology Counsel for Alibaba Group shared that IP is not only a defense mechanism but a means for collaboration between different groups, such as the legal department and R&D.
Brand is also a key consideration with thinking about an IP strategy and IP monetization. For Alibaba, launching new products comes with careful consideration about where they fit in with the company’s overall branding strategy, and how that impacts their IP strategy.
Inside China’s leading IP companies
On day two, panelists from China’s leading IP companies gathered to discuss the value of IP and the IP management operations at their companies. The panel included speakers from ZTE, who was the biggest filer of PCT applications in 2011, Goldwind Science & Technology, Simcere Pharmaceutical Group, Founder Group, Baidu, and Datang Telecom Technology & Industry Group.
For ZTE, Chief IP Officer Haibo Wang commented that IPR is used as a defense mechanism against competitors but also a means for generating return. The company has 80,000 employees and 30-40% of them are in R&D roles, so creating IP is a critical part of their business.
Xuehong Zhang, General Manager of the Legal & IP Department at Datang commented that patent applications are the “starting and ending points” of their business. The company’s IP strategy has been emphasized all the way to top-level management so that the company can share a vision of innovation.
A key question of the panel was how to maintain patent quality in China, since there has been a sharp increase in patent filings in the country.
Wang commented that for ZTE, patent quality is critically important, although he doesn’t view quantity and quality as being contradictory to one another. “Which is more important is determined by the company’s judgment at a given stage in development,” he said.
Xuri Yang, IP Rights and Intangible Capital Director of the Founder Group commented that the country began taking the patent law seriously a little over a decade ago, and that patent development will be a process of evolution over time. He also commented that quality versus quantity cannot be properly assessed without considering a company’s tactics, be them defensive or otherwise.
Finally, the speakers discussed their companies’ relationships with the service providers that they work with.
Park Zhang, Head of Patents at Baidu, said that because their in-house IP department is small, they rely on an outside law firm to conduct a lot of their work. They consider their law firm a partner and want them to share their corporate vision.
Kai Wu, Executive Vice President of Goldwind Science & Technology, also commented that service providers need to constantly increase their skills and competences especially in emerging fields like new energy. Service providers must have expert technical knowledge.
Wang also shared that despite the large size of ZTE’s business, they still require the work of over 20 different outside firms to handle their IP. They look for their outside law firms to have a global vision so that they can help ZTE navigate risk in the global market. ZTE also relies on service providers for patent analysis and management resources.
China IP Champions Gala Dinner
A highlight of the IPBC China was the China IP Champions Gala Dinner, held on Monday night. At the dinner, 33 Chinese companies were honored for their IP management and value creation strategies.
With assistance from inovia and Ciela, IAM’s team conducted both qualitative and quantitative research to identify these IP Champions:
aigo Digital Technology Co, Ltd
BYD Co, Ltd
Chery Automobile Co, Ltd
China Electronics Corporation
China Kweichow Moutai Distillery Co, Ltd
China Mengniu Dairy Company Limited
China Mobile Limited
China Petrochemical Corporation (Sinopec Group)
Datang Telecom Technology & Industry Group
Goldwind Science & Technology Co, Ltd
Gree Electric Appliances Inc of Zhuhai
Huawei Technologies Co, Ltd
Hutchison MediPharma Limited
Lenovo Group Limited
Li Ning Company Limited
Mindray Medical International Limited
Netac Technology Co, Ltd
PetroChina Company Limited
Shanda Interactive Entertainment Limited
Simcere Pharmaceutical Group
Tsingtao Brewery Company Limited
Zhejiang Geely Holding Group
The dinner was a wonderful event and we enjoyed hearing about the achievements of these companies. You can learn more about the research process for China’s IP Champions and get details of the work they have done at IAM’s website.
I really enjoyed the inaugural IPBC China, which marked my first visit to China. The event presented a great opportunity to network and learn about IP from the perspective of leading Chinese companies, as well as the importance of IP as a global business asset.
Our colleagues at AFD China recently shared these news pieces from the Chinese Patent Office (SIPO):
Newly revised Measures for Compulsory Licensing of Patent Implementation to come into force
In effect May 1, 2012, the Measures for Compulsory Licensing of Patent Implementation will likely benefit the public interest, especially in the field of medicine. These measures are expected to have a positive impact on compulsory licensing for generic drug manufacturing.
Created in China: The Power of Invention Patents
Image source: SIPO.
The graphs shown above represent the top 10 Chinese provinces and municipalities for which invention patents were granted in 2011. The total inventory of patents surpassed 350,000 and for the first time in China’s history, the number of applications granted by domestic companies exceeded those of the foreign-based companies.
According to a report released by WIPO , China filed over 16,000 PCT applications in 2011, up 33.4% from the year prior. This growth rate was sharper than any other PCT jurisdiction in the world. As of 2011, China is the fourth largest user of the PCT system with its top applicant, ZTE Corporation, publishing over 2,800 applications in the year.
Filing a PCT patent application into China? Click here for country-specific information on the filing process in China and other foreign jurisdictions as well.