China Patents Shift Focus from Quantity to Quality

Although Chinese enterprises have grown rapidly in areas such as mobile communications, electronics & IT and chemical engineering, the number of invention patents held by foreign applicants in China is still significantly higher than that of domestic invention patents in the fields including optics, medical technology, engines, audio/video technology and transportation.

From the perspective of the number of invention patents maintained for more than 10 years, the number of patents domestic Chinese owned is still lower than foreign owners in 29 technical fields. It is still necessary to continue to cultivate high-value core patents in these areas.

Recently, SIPO released statistics and rankings of companies related to invention patents in 2017, which show that: in 2017, there were in total 1.382 million invention patent applications, rising 14.2% than the previous year; 420 thousand invention patents were granted, wherein, 327 thousand of them are granted to domestic invention patentees, up 8.2% than the previous year.

  • Increasingly stronger innovation capability

Chinese companies have made dazzling achievements in aspects of invention patent applications and grants. In 2017, among all domestic invention patents and applications, companies occupied 63.3% of patent applications and 66.4% of the invention patent grants, which raised 1.6% and 0.9%, respectively, compared to those of 2016.

Among the Top 10 Chinese (not including Hong Kong, Macau and Taiwan) companies with the most invention patent grants in 2017, apart from companies such as Huawei, Sinopec, ZTE and BOE, which appeared frequently on the list, there are also companies such as Oppo which appears on the list for the first time. In addition to traditional big companies such as Gree Electric Appliances, Lenovo and State Grid, there are also emerging companies such as Semiconductor Manufacturing International Corporation (SMIC). This shows the diversification of China's innovation-driven development strategy, and the increasingly stronger potentiality for sustainable innovation of Chinese patents.

On the ranking list of approved invention patents granted to domestic companies, Huawei, ZTE, BOE, Oppo and Lenovo, which are all technology-based companies that focus on communications and electronics & IT, account for 5 places of the Top 10. ZTE, BOE and Huawei also appeared in the ranking list of Top 100 innovation enterprise clusters by Number of PCT filings in Global Innovation Index 2017 released by WIPO. It is sufficient to indicate that Chinese companies are gradually taking a dominant position in these fields.

In addition, SMIC (Shanghai), a representative of R&D-intensive companies, also entered the Top 10 with 862 invention patents. It also implies that as long as companies put emphasis on innovation and strengthen protection and utilization of patents, they can be in the leading place even from behind.

Compared with the ranking of approved Chinese invention patents (not including Hong Kong, Macao, and Taiwan) from companies in 2016, the top five companies are the same in the two years. This is because the creation, application and approval of patents are closely related to the law of innovation development. These companies place the intellectual property strategy at the core of enterprise development, which form a beneficial cycle from innovation to patents and to profits.

  • More focus on improving quality

This time, the State Intellectual Property Office (SIPO) published only the ranking of domestic enterprises' Number of Invention Patent Grants, no ranking of domestic companies' Number of Invention Patent Applications. This is intended to further unlock the guiding function of statistical indicators of patents in development of innovation to further improve the quality of patents and avoid quantity-oriented tendency. The development of Chinese patents has already passed the quantity-oriented stage, and in the next step will turn to improvement of quality.

By the end of 2017, domestic Chinese (not including Hong Kong, Macao and Taiwan) entities owned a total of 1.356 million invention patents, with an ownership of 9.8 invention patents per 10,000 population. Since the 18th CPC National Congress, SIPO has put forward the concept of "Win by quality, Layout by quantity" to initiate the implementation of Patent Quality Improvement project. With the promotion of a series of measures, there were already 30 technical fields in 2017 out of the 35 fields classified by the WIPO in which the number of Domestic Chinese Invention Patents Ownership outnumbered that of foreign applicants in China.

  • Some fields need to be strengthened

Although mainland China enterprises have grown rapidly in areas such as mobile communications, electronics & IT and chemical engineering, there is still a great distance from foreign patent layouts in some areas. At present, in five fields including optics, medical technology, engines, audio/video technology and transportation, the number of invention patents held by foreign applicants in China is higher than that of domestic invention patent ownership. From the perspective of number of invention patent ownership maintained for more than 10 years, domestic mainland China ownership is still lower than foreign ownership in 29 technical fields. It is still necessary to continue to vigorously cultivate high-value core patents in these backward areas.

If mobile communications, electronics & IT and other industries heavily invest in R&D, they will be able to present technical achievements in a short term. However, if you want to make breakthroughs in high-end manufacturing, you must make long-term investments in core technologies such as bearings, gears, gearboxes and transmission devices. China believes that the lack of patent layouts in high-end equipment such as optics, transportation and engines is due to a lack of innovation accumulation in these areas.

A very important reason for a short term of patent maintenance is that the demand on technical market shrinks due to the low quality and exploitative value of the patent itself. Therefore, in the future, Chinese enterprises should increase investment in R&D, make better patent layout plans in advance according to the direction of technological development, provide better technology from origin of innovation, and improve the level of industrialization of patents.