China Poised to Become Global Innovation Leader

LONDON and NEW YORK, Oct. 5 /PRNewswire/ -- China is projected to lead in patent activity by 2011, according to a detailed intellectual property analysis published today by the IP Solutions business of Thomson Reuters. The projected growth in Chinese patent activity is based on analysis of the total volume of first-patent filings in China, Europe, Japan, Korea and the U.S. China experienced an annual growth rate of 26.1 percent in total patent volume from 2003-2009, as compared to its closest rival, the U.S., with a 5.5 percent growth rate.

This second edition of the Thomson Reuters study suggests that patent filings in China will outpace Japan and the U.S. in 2011, one year earlier than was forecast when the first edition of the study was published in 2008. The study, Patented in China II: The Present and Future State of Innovation in China, tracks global patent activity as a barometer for innovation across dozens of metrics to provide a view into China's innovation economy.  

Beyond projected patent growth, the study also examines the composition of patents from China relative to its peer group globally, domestic vs. foreign patent applications, patent technology areas, government/policy implications, and patent quality vs. quantity. Following are some of the key observations in the analysis:

• Expansion through Patents: While innovation by domestic entities is driving China's patent boom, China is also expanding its IP protection overseas. From 2007-2008, the growth rate of China's overseas patent fillings in Europe, Japan and the U.S. were 33.5 percent, 15.9 percent and 14.1 percent, respectively.

• Chinese Government Is Driving Innovation: Government innovation incentives, R&D tax deductions, Chinese premier Wen Jiabao's commitment to make China an innovation-centered economy, and unique patent types (such as utility models) contribute to China's acceleration to the top innovator spot.

• Shift from Agriculture to High Tech: As the Chinese economic landscape changes, a major shift is occurring in patent filings: agri-centered innovation related to food production is growing much more slowly than high-technology innovation. There was a 4,861 percent increase in domestic Chinese patent applications in digital computers in the decade from 1998 to 2008, versus a much more modest increase of 552 percent in natural products and polymers for that same period.

• Alternative IP Rights in China – Utility Model Patents: Approximately half of all Chinese patents filed in 2009 were utility models, which are less-rigorous, more-affordable forms of patents that provide 10 years of protection (versus 20 years for invention patents). The use of utility model patents in China has grown at a rate of 18 percent per annum since 2001. Utility models are also a potentially valuable strategy for foreign filings in China.  

• Patent Quality Improving: Despite the growing use of utility model patents, Chinese patent quality is slowly improving based on the Thomson Reuters analysis. By tracking the ratio of patent applications to granted patents among full invention patents in China, the analysis finds that patent quality is trending up.

The data in this report was compiled using the Thomson Reuters Derwent World Patents Index^® (DWPI(SM)) database, the most trusted source of global patent information with expertly-indexed records, enhanced titles and comprehensive abstracts, enabling deeper insight into patent research.

To view the full report, Patented in China II: The Present and Future State of Innovation in China, go to: http://ip.thomsonreuters.com/chinapatents2010/index.html.

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SOURCE Thomson Reuters, IP Solutions