BOFIT Viikkokatsaus / BOFIT Weekly 2018/41

The World Intellectual Property Organization (WIPO) reports that China now annually grants the most patents by far of any country in the world. WIPO says that in 2016 there were 1.3 million patent filings in China, and over 400,000 patents granted.

Observers have long been sceptical about the quality of Chinese patents. Bloomberg reported late last month that most patents granted in China were so worthless that the patent owner ceased to pay the annual upkeep fees within five years, allowing the patent to expire. Bloomberg notes that US patent owners, for example continue to pay upkeep fees for much longer time.

In China, patenting activity is supported with public funds in the form of e.g. tax breaks and direct subsidies. This is seen both in the quality of patents and types of patents filed. Half of the patents approved last year by China’s patent office were utility models and a quarter design patents. Such patents get less scrutiny and have shorter processing times than invention patents.

Even with the issues related to patenting, China’s R&D activity is nevertheless very strong and the country has made remarkable technological gains.