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New Chinese patent rules could squeeze foreign firms

New Chinese patent rules could squeeze foreign firms

R&D bases in China run by foreign firms may have to adjust their IP approaches to the emerging superpower if proposed amendments to patent rules are ratified. The new rules would press foreign firms innovating there into filing for Chinese patents first, or pay the penalty of losing legal protection for their creations. Furthermore, there are suggestions that those firms will not be able to obtain patents for inventions that are already being marketed outside the country.

Tactically, the proposals look set to create conditions that would benefit the Chinese economy, aiming to raise the likelihood of new inventions going to market there first. This could create an environment for consumer electronics – for example – that has historically been the preserve of Japan. While firms with IP interests in China have yet to weigh in with verdicts on the amendments, patent lawyer Elliot Papageorgiou told the Financial Times that they could make the innovation climate 'more challenging.'

News of the rule-changes arrived at the same time that a leading IP industry monitor published findings on the current status of patent activity in China. The study reveals that of the four million patent applications filed there between 1985 to December 2007, the last million occurred in the final 18 months of that period. This represents a significant upsurge compared to the first million, which took 15 years to build up.

Not accounting for proportionality, in purely numerical terms China is leading the field against the US filing rate of infringement cases. China saw a 15.6% increase between 2004 and 2005, whereas US cases steadily declined from 2004 to 2006.

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