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.

Prison Inventions and Patent Subsidies

The South China Morning Post reported recently on jailhouse inventors, a topic that you may have first read about here. According to the SCMP and Beijing Youth Daily, various provinces have different commutation schemes for inmates that file patents, which are based on provisions in the criminal law permitting commutation based on meritorious service (Criminal Law, Art. 78).

As with their policy “cousin”, patent subsidy and innovation tax incentive programs, not all inventions are treated equally for purposes of obtaining government benefits. For example, according to 2005 Provisional Opinions on Specific Questions on Commutation of Sentences in Jiangsu,《关于审理减刑案件若干问题的意见(试行)》 one invention patent is equal to one utility model patent or three design patents.

Similar to patent subsidy programs, there is also any number of patent agents pursuing this type of business. However, the best practice for would-be inventors is likely if the convict or his/her representative finds a patent agent familiar with the practice of the local prisons as practices may vary.

Why the increased interest in jailhouse inventors? Probably the press has picked up on this issue with the December 9, 2014 decision of the Beijing Second Intermediate People’s Court which reportedly granted one year’s commutation of the sentence of the former Chinese Football Association Vice President Nan Yong.  Nan Yong was granted 4 patents in 2012 and 2013 for: a soccer practice device, a portable goal, assembly of mobile terminal supporting frames, and a desktop computer monitor.

Considering the large size of the US prison population (about 600,000 more than China), is this an untapped resource for encouraging innovation in the US :)?

Update of May 18, 2019:  Here is a recent article from the Shanghaiist about a death row rapist who may have earned early release by patenting a new manhole cover design.

 

China’s Patent Maintenance Crisis

He conquers, who endures. – Persius

Does the growth of China’s patent office mean that China is “out-innovating” the West, as some commentators would suggest?

Patent applications, patent grants, and analyses of patent quality in commercially significant fields are certainly indicators of innovative activity.  However, since the Chinese government typically subsidizes patent applications, patent applications in particular may be a distorted metric for benchmarking innovation.  Because subsidies may be less available to maintain an invention patent throughout its 20 year useful life, maintenance rates are also useful indicia of whether commercial meaningful inventions are being patented.

The IP-5, consisting of the US, European, Japanese, Korean and Chinese patent offices publish a useful compendium of statistical data regarding their offices’ operations (http://www.fiveipoffices.org/statistics/statisticsreports/statisticsreport2012edition/chapter4.pdf -as of July 22, 2014) .  The chart below which reflects 2012 data shows that over 50% of Japanese patents are maintained through their 17th year, 50% of US patents are maintained through their 16th year, and only 50% of Chinese patents are maintained through their sixth year.  Differences in maintenance rates may be attributable to requirements to maintain annual maintenance fees, or the date of collection of maintenance fees.  The US collects a maintenance fee at 11.5 years after date of grant, and does not collect  a fee thereafter.

maintenancechart

SIPO’s  Report on Patent Strength (2012), which I have previously blogged about reports on patent maintenance rates.  This repot documents that maintenance rates have dropped for Chinese patents – from about 55% in 2011 to 52% in 2012.  Only Beijing showed an increase in patent maintenance rates during this period.

SIPO has broadly identified the problem of low quality patent applications by linking them to numerical goals of local governments, which have tended to focus on quantitative measurement of patent applications, rather than qualitative goals, and  with recent policy changes it is expected that future metrics on patent strength will include efforts to deal with “abnormal” patents, including abuses from patent financial subsidies and patent awards, which SIPO has said will not support long term growth.  (Note as of July 9, 2020, the links to these reports were not live).

The data reveals that the rapid increase in patent applications over the past few years is also accompanied by declining maintenance rates – in effect demonstrating a soft underbelly of China’s evolving patent “strength.”  I believe the solution to the patent maintenance problem is in strengthening patent enforcement and improving market opportunities for commercializing patents, not in subsidies, awards or other “top-down” regulatory efforts.

Photo below taken at New Oriental Plaza in Beijing 2013, advertising sporting goods accompanied by a larger than life reproduction of an expired US patent.

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