CNIPA Does A Statistical Switcheroo

About a dozen years ago while reviewing SIPO monthly statistics, I noticed that the percentage of foreign applications for invention patents for the prior year had shrunk to the point where they were only slightly in excess of domestic patents.  A week or so later in January, I read a report from SIPO that reversed the foreign and domestic positions.  No explanation was offered.  I had not saved a copy of that earlier report.  To this day, I have no way of verifying if there had been a mistake or if the adjustment had been made for propaganda purposes.  I have come to believe that SIPO had physically moved a group of patent applications form the current year to the prior year in order to make a useful propaganda point about China’s IP system – that Chinese patent applicants now were the dominant source of patent applications in China.

There has now been another unexplained change in data reporting on patents. CNIPA, SIPO’s successor, changed its practices at year-end 2020 to omit the numbers of applications and include only the numbers of granted patents.  This significantly reduces the appearance of growth in patent applications from Chinese filers to a work load based assessment based on grants.  It hides the rapid growth in filings, particularly of lower-quality utility model patent filings.  I was not the only one to have noticed the change.  On January 25, a reporter asked a  Ministry of Foreign Affairs (MOFA) spokesperson what was the significance of  the data on granted patent applications as reported by CNIPA and how to evaluate it? MOFA referred the reporter back to CNIPA.  A Chinese blogger on a site called IP ForeFront, has similarly asked: “How many patent applications were there really  in 2020?” (2020年中国专利申请量到底有多少).  The author attributes the change in part to American pressure on China to reduce the large number of low-quality patents.  See my prior blog for a recap of those developments.  

Comparing IP Forefront projections with CNIPA data for 2018 would show: an 11.4% increase for invention patents; a 31.5% increase in utility model patents; and an 8% increase for designs.  Using October 2020 data, I had previously calculated similar increases of 12.8%, 33.6% and 7.4%, respectively.  I had also anticipated an increase in overall patent filings in 2020 based on October data, with a surge in utility model patents. These changes may have been a response to the pandemic, and were similar to the increase in provisional patent applications in the United States.   The IP Forefront article author similarly looked at pandemic-driven adjustments in Chinese patent filing behavior.

Perhaps, as IP ForeFront suggests, CNIPA is taking steps to rein in patent data in light of US criticisms that China’s patenting regime had too long been driven by market externalities.  I believe this explanation attributes too much motivation for the “switcheroo” to US pressure.  The data was certainly also adjusted due to  various domestic policy initiatives to improve patent quality, including from the highest levels of the Chinese government. If the application data were published at this time, it would have offered a sharp contrast to the goals articulated in the near contemporaneous publication of General Secretary  Xi Jinping’s far-reaching article in the authoritative journal Seeking Truth (求是·) “Comprehensively Strengthen Intellectual Property Protection, Stimulate Innovation and Promote the Construction of a New Development Pattern” (全面加强知识产权保护工作 激发创新活力推动构建新发展格局) of January 31, 2021.  The Chinese characters for quality 质量 appear 11 times in that speech. Leader Xi specifically stated that “the overall quality and efficiency of intellectual property rights is not high enough, nor are there enough high-quality and high-value intellectual property rights” ( “知识产权整体质量效益还不够高,高质量高价值知识产权偏少”).  The contents of that article were likely also known to CNIPA’s leadership as it was derived from a speech given on November 30, 2020.  For political reasons, data reporting may have needed to be adjusted to minimize an apparent conflict.

Many foreigners criticize Chinese data as being unreliable.  I believe that if data that previously been made consistently available it can at least be used to observe changes made over the reporting period using what are presumably identical collection methods. CNIPA’s data has no longer been made consistently available.  This now casts doubt on the data going forward. This was my reaction a dozen or more years ago when I observed a shift in foreign patent filing data.  I anticipate, however, that 2020 application data will be made available at a more propitious time.  The pressure may come from external actors, such as the IP-5, WIPO, and Chinese or foreign journalists.  Most likely,  China had a dramatic increase in utility model patent filings during the pandemic.  It is also clear that China is now  taking steps to reduce its high volume of patent filings.  We should all continue to support consistent reporting of data from CNIPA to better understand these developments and have a fact-based approach to China’s IP regime.

Update of Feb. 23, 2021: CNIPA Commissioner Shen Changyu also wrote an article in Qiushi to accompany Xi Jinping’s article, with a similar focus on IP quality and economic development.   The article has been translated by CNIPA.

Note: Statistical chart above from IP-5 2019 Report.

Autumnal hook 2012 update

A guest post from Zhen Lei of Penn State

Mark highlighted the phenomenon of the Autumnal Patent “Hook” at the SIPO in his blog posted early last year. The data on 2012 patent filings at SIPO again shows the same pattern (see the graph below). My colleagues at UC Berkeley and I conducted a study on the seasonality of patent filings at the SIPO, which confirms Mark’s insightful observation. Our study involves monthly patent filings at the SIPO from 1986 through 2007, and we compare domestic filings with foreign filings. We find a much stronger surge in December for domestic filings after 2001, when China started to encourage innovation and patenting. Based on the grant rate and first year renewal rate, domestic firm filings made in December after 2001 seem to be of lower validity and lower value. We posit that one plausible explanation of the surge in domestic patenting in December is that domestic firms were under political pressure to meet yearly quotas set by the local governments.

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More on the developing trends in China related to Intellectual Property from the prepared remarks of Teresa Rea, the Deputy Under Secretary of Commerce for IP, delivered at Fordham Law School on January 28, 2013.

USPTO Report on Patent Developments in China

USPTO had  released its report with links  on patent enforcement in China.  The reports summarize a series of roundtables  and requests for information from a Federal Register notice.  Others have previously blogged on some of these developments.  The USPTO  links are currently not all active but should be available shortly. Continue reading