The West Remains Blind to China’s IP Engine

As China’s IP engine continues to power up, the West remains blind to what is happening here. China now leads the worlds in patents. China’s companies aren’t just doing junk patents filed as unexamined, low-cost utility model applications in China. Two of the top five international patent filers, filing expensive, examined, international patent applications, are Chinese companies. And in addition to lots of filing activity, China and its courts are buzzing with burgeoning IP litigation. China now leads the words in IP lawsuits, many of which are Chinese companies suing other Chinese companies. And yet just expressed amusement when they learned of a single IP case in China and talked of the “delicious irony” of one Chinese company suing another. Irony? Delicious? News?? This is part of a transition that has been going on for years in China. It’s routine now. Old news. But the West doesn’t get it.

More seriously, the West continues to write off the book in Chinese IP as just a bunch of low-quality patents. That may help the West feel good about its own decline in innovation, but it blinds people to the opportunities (and threats, for some) that are rising from the East. A recent example of Western attitudes is expressed by the European Union Chamber of Commerce in China (EUCCC) in their new report, “Dulling the Cutting Edge: How Patent-Related Policies and Practices Hamper Innovation.” Yes, Chinese IP has quality problems in some sectors (similar to the pervasive quality problems in the US that the USPTO fails to address), and yes, many companies are just filing lost of Chinese patents to get tax benefits. But they are learning how to file. Some are learning how to build estates and how to succeed with litigation when needed. And some are doing this on an international scale. The trends are there and what may be small waves now (still big enough to break records on some shores) could become a tsunami in the future.

Discounting Chinese IP and innovation for its early-stage weaknesses is the wrong way to prepare for the future.

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