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China IP trends: the shift in patent filing – RWS and Managing IP webinar recap

RWS China Trends webinar

In a webinar hosted by Managing IP and RWS, Justin Simpson of RWS and founder of inovia and Xia Zheng of AFD China Intellectual Property discussed filing trends and tips for non-Chinese applicants

On June 28, RWS and Managing IP presented a webinar entitled China IP trends: the shift in patent filing. Guest speaker and presenter Justin Simpson of RWS (founder of inovia) reviewed filing data and trends from WIPO, comparing Chinese filing data to statistics from Japan and the US and predicted how filing statistics may look over the next five to 10 years. Mr Simpson also introduced fellow guest speaker Xia Zheng, founder and president of AFD China Intellectual Property, and conducted a Q&A on what the observed trends mean for IP owners outside of China. Zheng discussed important strategies for filing in China including types of protection. Below is a transcript of the webinar, edited for clarity.

You can view a replay of the webinar here or at the end of this article.

Question 1 – What’s driving the fast increase in filing volume coming out of China? Is it pure innovation from large companies like ZTE and Huawei? Is it a push from the CN government?

It is a result of years of implementation of the National Intellectual Property Strategy with the vision to build China into a nation with a fairly high level of IP creation, utilisation, protection and administration. Chinese governments of different levels encourage innovation and set up policy to support it. For example, governments provide subsidies/reimbursements for overseas filing.

In parallel, it is a fact that large companies became more aware of the importance of seeking IP protection abroad, especially when they have launched products and used technologies out of China. Companies like ZTE and Huawei have done it for years and started to take IP not just as a demonstration of their capability, but as a powerful tool to create barriers for competitors.

We also noted that medium and small-sized companies have started to grow IP portfolios outside of China.

Question 2 – With such large numbers of filings, it’s easy to assume they are incremental/low-quality inventions. What’s your view?

Yes, some companies may want to have a large number of filings to show, but they are a minority. Companies are running a business; they will pursue cost-effectiveness in each and every aspect. So why pay big money for low quality [patents]? The filing fees are not cheap, especially in the developed countries. I don’t think any business will purposefully waste efforts and come away with nothing.

Yet another angle – going through the rules of some of the government policies concerning patent subsidies and financial incentives, you will find clauses asking the candidate companies to prove that their patent applications have novelty and inventiveness, to prove that their patents have commercial value, for example, that companies have been using them, have licensed them to others or are making profits from exploring them.

Question 3 – Large Japanese companies often file multiple applications for a single innovation to bump up their stats. Is that a practice you’ve seen with Chinese applicants?

It is not a valid strategy in the long term. Again, a business stands on cost-effectiveness. Unless the number will help it get something, I don’t think it is common conduct among the top filers. Quota is usually only a temporary or short-term solution.

Big companies, as you mentioned, ZTE and Huawei, are familiar with IP practice. They have professional IP teams. They have long-term IP strategies and they set a clear direction and aims. They monitor and evaluate their technology from the date it was created and prioritise the technologies when considering seeking filings and protections.

Question 4 – What tips do you have for non-Chinese applicants in light of these increasing volumes?

File as early as possible and craft your strategy to be as comprehensive as possible, seeking multi-dimensional protection by making good use of the system. Generate an appropriate, effective and well-covered scope for your technology, brand and business, etc.

Specifically, with respect to patent practice, please keep in mind that every jurisdiction has its own independent requirements for filing and examination. For example, China has different requirements on non-prejudicial disclosure comparing to the US, [so] you need to pay attention if making a disclosure before filing. China does not have continuation/continuation-in-part applications, so comprehensive scope needs to be reflected in the original application documents. [An] invention substantially conceived or created in China must go through secrecy review before filing aboard, etc.

To save time and energy, it is advisable to work with local experts; turn to professionals – like RWS and AFD – for help.

Question 5 - Is it more important than ever to file in China?

The answer is [yes]. Patents [are] an indicator of innovation and innovation requires resources. All [of which] will fundamentally be attributed to finance. China has become one of the biggest markets and is taking actual steps to protect intellectual properties. Filing in China will become as at least as important as filing in the US, Europe, Japan, and Korea. Why not catch up with the trend while taking advantage of China’s improvement on IP practice and protection?

Question 6 - Should non-Chinese firms be doing more patent searching of Chinese databases?

After the restructure earlier this year, the SIPO has become the biggest IP office in the world. No doubt it will have more influence on IP issues. And as Chinese filings grow at a faster speed, documents from China will, and may have already, become an integral part of the patent search. Since most jurisdictions are adopting absolute novelty criteria, searching in Chinese databases would be beneficial.

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