Jul
18

China Gets Serious about Intellectual Property

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Many people in the West think of China as a copier exploiting the IP of the West and generally ignoring IP rights. In reality, China, the nation where I now live, has made steady and rapid progress in building an IP system and in enforcing and respecting IP rights. Companies are increasingly able to protect their IP in China and have it enforced successfully. Successful experiences in enforcing IP has led some Chinese consumer products companies, for example, to become much more serious about protecting their innovations in China and beyond.

Chinese companies are now racing to create strong patent portfolios not only in China but overseas as well. China’s tax incentives contribute to this as does its increasingly strong patent system, and the strong investment in R&D in this nation and the growing technical competence and creativity of China has led to a serious need to protect Chinese IP from infringement by the West and others. China is becoming the world’s leader in filing patents. In 2011, China is expected to overtake Japan and the United States for the #1 spot as top patent filer. They appear to be leading the world in terms of the number of patent law suits being pursued in Chinese courts, with significant awards being made that should encourage companies to pay more attention to patents here. In many areas, Chinese innovators are leading the world and are backing up their work with aggressive international patent filings. My own study of biofuels patents, for example, shows that China is becoming the world’s top source of IP related to biofuels and other plant-based bioproducts. Chinese universities are filing patents in many areas and have even had success in courts enforcing them. China on all fronts appears to be accelerating its move toward being a source of global IP and innovation.

The July 13, 2011 issue of the China Daily that I picked up last week illustrates the growing importance of IP. Page 5 had a story, “Courts Do More for IPR [Intellectual Property Rights] Protection.” The article reported that the Chinese government is seeking to learn from experience in the West to further improve and accelerate its legal system to strengthen IP protection. I should note, though, that Chinese courts already have a reputation for being much faster than Western courts, so I hope they don’t learn the slow part from the West. The article also reported that over 9,000 arrests have been made in the past 9-months in efforts to crackdown on piracy and other violations of IP rights. Nearly 13,000 underground factories have been closed in another campaign and nearly 5,000 gangs selling illegal goods have been broken up. In this 9-month period, 2,492 IP cases were brought to Chinese courts and 1,985 cases were adjudicated.

In the same issue, page 17 had a section called “ipscene” with IP-related news stories from around China. There were reports on China’s proprietary subway noise reduction technology being installed on Beijing’s new line 10; on the rapid growth of China’s LED industry; on the advances in diesel design from Yuchai Group which now has over 600 patents and has become a leading force in “green power”; and on a low-cost solar water heater being patented by inventors from Jinan. There was also a report on prison terms and fines for producers of counterfeit liquor. On the same page was a half-page article on grassroots inventions at a national innovation exhibit, and an article about educating Chinese children to boost innovation.

That’s a lot of IP and innovation content for a popular newspaper, and reflects the importance of these topics in China.

As the West continues to make patents more difficult to obtain and less valuable, frustrating innovators and contributing to innovation fatigue, China is doing the opposite. They are out to build a stronger IP system and make IP more valuable. They are encouraging the pursuit of IP protection and the creation of IP, and will continue to surpass the West in many measures. The pace of innovation in China continues to accelerate. Now companies, such as the one I work for, will increasingly be concerned not with copying what the West has, but in preventing the West from copying what is created here. There are further ironies to be revealed in this adventure.

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