China Becomes First Country With Over 1 Million Patent Applications in One Year
Becomes 1st Country With Over 1 Million Patent Applications In One Year
Filing for and having patents issued is one way of measuring how competitive a company, state or country is in the world stage. By that measure, China just surprised everyone by becoming the first country ever in the world to file 1 million patent applications – in 2015.
The actual number of patent applications filed, 1,010,406, represents a whopping 35% of the total 2.9 million patents filed for worldwide last year. And if that were not impressive enough, this percentage compares to China only having filed 7.8% of the world’s patent filings in 2014.
The applications do include all Chinese filings, so this is a mix of those filed by Chinese residents and those from foreign entities looking for patent protection in China. But the World Intellectual Property Organization, WIPO, analyzed the data and showed that almost two-thirds of the 1M+ filings were from within China and not overseas. The U.S. and companies within it was a substantial number two in Chinese filings, with close to 238,000 filed.
The significance of the patent filings cannot be overstated, especially as China makes its play both technology and economically to command lead market positions where Western companies had previously been dominant. When the patents issue, they provide a protective wall for domestic organizations that competitors must wade through to avoid lawsuits or the need for costly licensing. And even before issuance competitors who see the patents “laid open”, a legal term meaning the contents of the patent filings are made public in advance of issuance, so public comment is encouraged, are already having to design around them.
China clearly is innovating more and with more adept companies involved in advanced research and development of all kinds. So that is one reason for the increase. A second is the Chinese government now providing patent subsidies, making it less expensive to file. Other streamlining processes to make it easier to file are also in place.
A third reason for the increase is on the foreign side, where companies are filing for patent coverage now within China far more than ever before. For the foreign companies, having their patents granted in China could conceivably block locals from copying, as long as the Chinese courts agree, which they seldom do. And, as the U.S. in particular learned some years ago in Japan when it was more preeminent in the world economy, sometimes having a patent granted in the country can at least allow one to operate one’s business there, even if it may not block a local company from copying some or all of it.
What many may not be considering is that China may now also be planning to weaponize patents and may use them to stifle foreign competition and beseige key companies with patent litigation to make them more amenable to hostile takeovers.
In 2015, after China, the next four highest totals of patent filings were the U.S. as a strong second, followed by Japan, South Korea, and Europe.
And not surprisingly, the top filings by areas of innovation were in Computer Technology (with 7.9% of the total), Electrical Machinery (with 7.3%), and Digital Communication (with 4.9%).
At current rates, the total numbers and percentages of all world filings is likely to increase by another giant leap again in 2016. What this means on the world market is that, yet again, China is moving rapidly to dominate the world while America lags behind.