The October 2012 World Intellectual Property Organization (WIPO) report signaled a significant change.  The Intellectual Property Office of China (SIPO), for the first time, leads in the number of patent applications.  In fact, SIPO became the largest Intellectual Property office in the world, leading in patents, trademarks and designs.  It could be argued that the number of applications cited in the patent category included utility models, but the statistic is still noteworthy.  Utility models are issued for a shorter period of time and are granted, at most offices, without significant examination.  About 60 countries, excluding the U.S., issued utility models in 2011.

Although some may consider this change in the leading IP office in terms of number of applications as a change in the lead in innovation, such a conclusion is not warranted.  As I had previously stated, there is not a one-to-one relation between patents and innovation.  Rather, as aptly stated by President Lincoln, “… [Patents] add[ed] the fuel of interest to the fire of genius.”  Viewed in that light, the growth of patent applications received by SIPO is a strong indication of economic interest and an indicator that China’s 15-year science and technology plan is moving forward.   The majority of the patent and utility model applications filed at SIPO are filed by residents of China, which also indicates the move to technology ecommerce.

Before we feel that the sky is falling and the U.S. is declining, we should look at history.  It is not the first time that the USPTO is not the patent office with the largest number of applications.  In 1968, the Japan Patent Office (JPO) became the patent office with the largest number of applications and retained that stature until 20005, at which point the USPTO went back to the leading position it had held from 1883 to 1967.  The access to capital, the lack of stigma due of trying and failing (as most start ups do) and the ability to create new markets (as done recently by Apple, Google and Facebook) still remain advantages of the American environment.

Although the sky is not falling, we should recognize the move in China toward a technology economy and learn how to participate in it.