China National Intellectual Property Administration (CNIPA) recently released a report regarding patent and trademark filings in the first half of 2019. Accordingly to the statistics, Chinese domestic patent and trademark filings declined by 9.4% and 4.1% respectively, while more outbound patents were filed by Chinese companies internationally. This is not surprising as the CNIPA is changing the examination practice and focusing on patent and trademark quality instead of quantity.

Over the years, China has become world number one in terms of quantity of patent filings and trademark filings. But, China is never considered powerful in intellectual property protection due to large amount of junk patent filings, piracy of other parties’ marks and warehousing of marks.

In 2019, the CNIPA realized the problems and thus took a series of measures to promote high-quality development of patent and trademark filings. For example, revision of trademark law in April of 2019 gave rise to a stricter sanctioning against malicious mark filings, warehousing of marks and infringement of marks.

As a result of measures above, in the first half of 2019, the number of invention patent filings in China went down to 649 thousand, a decrease of 9.4% compared to the last year, and the number of trademark filings went down to 3.44 million, a decrease of 4.1% compared to the last year. The “double decrease” was within the expectation of the public and was the result of optimization of filing structures and the improvement of filing quality.

On the contrary, the patent and trademark filings by foreign entities achieved a “double rise” in the first six months of 2019. The patents filed by foreign entities reached 78 thousand, an increase of 8.6% compared to the same period of last year. The trademarks filed by foreign entities reached 127 thousand, an increase of 15.4% compared to the last year. The “double rise” indicated that China is creating a better soil for IP enforcement, and thus bolstered up the confidence of foreign enterprises to invest in China market.

Indeed, both of CNIPA and State Administration for Market Regulation (SAMR) have collectively initiated Operation “Iron Fist” in 2019, which aim to investigate and crack down any illegal acts related to trademark and patent infringement and counterfeiting. These administrative actions are highly efficient and more cost-effective than litigations.

Most interestingly, the Chinese enterprises are increasingly aware of the importance of overseas IP protection. The number of PCT international applications filed by Chinese applicants reached 22 thousand in the first half of 2019, an increase of 2.8% compared to the last year. This indicated that the awareness of Chinese companies on overseas IP protection is improving and increasing number of Chinese technology might be exported overseas in the future.