The IP Policy Turing a New Leaf for China's Innovation Ecosystem

In March 2021, the Fourteenth Five-Year Plan for National Economic and Social Development and the Outline of 2035 Long-Term Goals (the "Outline") by the State Council receives attention in the global innovation community.  The Outline reveals a major IP policy shift.  It affirms that funding for intellectual property applications has entered into history. In addition, the resource so saved will apply to strengthening support for IP's subsequent transformation, utilization, administrative protection, and public services in the next stage.

The affirmative position signals that China's innovation ecosystem is turning a new leaf.

Review of the ex-long-standing policy

Two months earlier, the US Patent and Trademark Office (USPTO) released a report: Trademarks and Patents in China.  The report shows the impact of non-market factors on IP systems in China. 

The report points out that: 

"Absent consideration of the role of non-market factors, cross-border comparisons based on the raw number of trademark and patent applications risk overstating brand creation and innovation activity in China. These non-market factors are also undermining domestic and foreign registries, stretching the capacity of China's patent and trademark examiners and review authorities, and narrowing the scope of available protection for legitimate rights holders".[1]

China always comes under such criticism for its emphasis on IP application volume rather than quality. But why, for an extended period facing such criticisms, Chinese patent and trademark authority had not changed such policy?

By observing the practice of Chinese patent and trademark authority, "Innovation's Crouching Tiger" (www.ictiger2020.com) took a retrospective insight into the former quantity-first policy. As the book points out, the administrative agency may have anticipated that the quantity changes lead to quality changes. 

Two observations 

Because of the high IP application volume stimulated by the incentive policies, the IP service industry has become familiar with basic IP service and experimented with new service models.   For example, quite a few service agents have found their respective market niches.  Some of them have even gone a step further. They have developed online business models to provide IP-related services that once needed face-to-face offline meetings. 

Further, professionals, such as lawyers, patent agents, and valuation professionals, have been accumulating hands-on experience with various IP work types. They have been learning about novel IP commercialization approaches, such as the patent pledge or copyright securitization.

These two developments are not common even in more mature countries such as the US or UK.

In this environment, Chinese IP professionals' experience has been accumulating quickly.  This achievement may be one of the "qualitative changes" the administrative authority hoped to see when adopting such aggressive means for promoting IP commercialization.

Looking forward

It's worth mentioning that China's IP-based Industries had experienced a high-quality development during the 13th Five-Year Plan period (2016-2020), and in last year, 2020, the Chinese IP system had reached a new height, as discussed in the article " The Secret Driving Force for China's IP Solid Growth " .

With both the experience and patent amount built up, the leadership now emphasizes promoting high-quality development, which is the priority in the 14th Five-Year Plan period (2021-2025) and focuses on strengthening support for subsequent transformation, utilization, administrative protection, and public services.[2] 

More insights on China's innovation ecosystem?

What is the complete picture behind the scenes about the Chinese innovation ecosystem? What kind of business opportunities are available for global participants?  Read more about China's IP ecosystem's developments by visiting our blog at ICTiger2020.com or Facebook at ICTiger2020 for related news updates.  Contact author at Jili_ICT@springip.com.

[1]https://www.uspto.gov/sites/default/files/documents/USPTO-TrademarkPatentsInChina.pdf
[2]https://www.cnipa.gov.cn/art/2021/1/22/art_53_156324.html

Source：iprdaily.com

Author：Jili Chung, Josie Chen, Jonas Hou

Editor：IPRdaily-Vapor