Chief Executive Officer at CPA Global, Simon Webster, shares his thoughts on the rapid rise of IP management in China.
During a recent interview with IAM magazine, I touched on CPA Global’s presence in China’s patent market where we are now growing at between 20% and 30% a year. This got me thinking about what has contributed to this meteoric rise in Chinese IP management.
China drove global patent applications to a new record in 2015, accounting for more than a million submissions for the first time within a single year, according to an annual report by the World Intellectual Property Organisation (WIPO). Between 2014 and 2015, there was a 7.8% growth in patents filed, bringing the total of patents filed globally to 2.9 million. Incredibly 84% of that growth originated from Chinese companies. One reason so many applications were made locally was the target China set itself to increase patent filings, with the government offering incentives to support the initiative.
China now has a justified reputation for manufacturing excellence. Just this month the South China Morning Post reported that China is applying for more patents than ever before, as its manufacturing companies rely on technological innovation to bolster profitability and growth.
Historically, China operated on a first-to-file basis, specifying that the first person to file for trademark protection usually becomes the owner of that trademark, irrespective of whether they have held it in the past. This led to ‘squatting’, or ‘trademark trolls’, where Western goods are trademarked by Chinese companies, and then subjected to infringement of rights claims (Apple was at the front of this issue in 2012, when it had to pay Proview Technology $60 million for ownership of the iPad trademark in China).
Today’s landscape has seen positive changes. Claims can now be denied for known company trademarks, and penalisation of trademark infringement is in place. This accompanies growth on an international level, as the 2016 edition of World IP Indicators, shows, with China accounting for 30% of all patents worldwide.
The State Council of China has launched a new IP strategy for Economic and Social Development. It touches on multiple growth targets for IP, almost doubling the number of local and international patents, as well as royalties. But, most importantly, it indicates that it wants to increase the public’s degree of satisfaction in IP protection by 80%. Whether these targets will be met through non-artificial means remains to be seen, but the intent for China to take a larger role in the worldwide IP market is clear. Growth to date may have been spectacular, but that may simply be the beginning.