Presentation at Patent Information Users Group (PIUG) Annual meeting, Lombard, IL, May 2015.

1. What’s behind China’s recent
Patent Explosion?
Dilip P. Pandya, Qualcomm Incorporated
PIUG 2015 Annual Meeting, Lombard, IL
The views expressed here are those of the author and do not reflect the official policy, or position of Qualcomm Incorporated.

2. Agenda
● Chinese patent application numbers
● Chinese patent application types compared to US
● China – domestic v. foreign patent applicants
● China’s contribution to the growth of world wide applications
● What’s driving the patent explosion in China?
● IP strategies for business in China
The views expressed here are those of the author and do not reflect the official policy, or position of Qualcomm Incorporated.

3. Chinese patent application numbers
The views expressed here are those of the author and do not reflect the official policy, or position of Qualcomm Incorporated.
2014
● Over 2.3 million patent applications were filed in China's State Intellectual Property Office ("SIPO")
● Over 578K regular (utility) applications filed in the USPTO.
● 4X more patent applications filed in China compared to US in the same time frame.
US-Regular(utility) applications
China-Invention Type applications
China-Utility model applications
China-Design type applications
China -Total - all application types
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Numberofapplications
Application Year
Comparison of US & China patent filing numbers (2000-2014)
Sources:
USPTO
SIPO

4. Chinese patent application types compared
to US
The views expressed here are those of the author and do not reflect the official policy, or position of Qualcomm Incorporated.
Chinese patent application
type
Comparison to US patent
application type
Invention type- patents have a term of 20 years and may be
granted for both methods and products.
Similar to the US-Regular (utility) application.
Utility model type – deemed to be similar to a petty patent;
allows for shape, structure and combinations to be filed;
not subject to substantive examination; provides protection
for 10 years from the first filing date.
Not related to US “utility” application type.
Design – also not substantively examined. Has been deemed to be more comparable to copyrights in
the United States.

5. China – domestic v. foreign patent
applicants
The views expressed here are those of the author and do not reflect the official policy, or position of Qualcomm Incorporated.
2000-2014
● Over three quarters of Invention type applications filed by domestic applicants
● Overwhelming amount of Utility (99%) and Design (96%) filed by domestic applicants
Source:
SIPO

6. China’s contribution to the growth of
world wide applications
The views expressed here are those of the author and do not reflect the official policy, or position of Qualcomm Incorporated.
WIPO - Contribution of offices to growth in patent applications worldwide
● 1995-2009: Growth in filing is attributed to China (37.2%) and US (28.6%)
● 2009-2011: China alone accounted for 72% of the growth
Source:
WIPO -2012,
World Intellectual Property Indicators

7. What’s driving the patent explosion in
China?
The views expressed here are those of the author and do not reflect the official policy, or position of Qualcomm Incorporated.
1. China’s 12th Five Year Strategic Plan
● Chinese government lays out its strategic vision and direction for the development of China in five year strategic plans, the 12th plan
was released on July 9, 2012.
● A key strategic goal of the plan is to move from “Made in China” to “Designed in China,” reflecting a shift from a manufacturing to an
innovation economy.
Source:
Thomson Reuters

8. What’s driving the patent explosion in
China? (Contd.)
The views expressed here are those of the author and do not reflect the official policy, or position of Qualcomm Incorporated.
2. National Medium to Long-term Plan (MLP) for the Development of Science and Technology
● MLP includes a National Patent Development Strategy (2010) set aggressive benchmarks of quadrupling the number of inventions per capita
by 2020.
● The plan also includes development of sixteen megaprojects focusing on key technological fields that will also drive the growth of IP.

9. What’s driving the patent explosion in
China? (Contd.)
The views expressed here are those of the author and do not reflect the official policy, or position of Qualcomm Incorporated.
3. Chinese government incentives for filing patents
• Professors who file patents are more likely to win tenure.
• Workers and students who file patents increase the chances of a hukou (residence permit) to live in a
desirable city.
• Some patents earn a cash bonus, while filing fees are covered for others.
• Corporate income tax may be cut from 15% to 25% for firms that file many patents.
• Corporations that file patents improve the chances of winning lucrative government contracts.
• Many companies offer employee incentives to generate patentable ideas, e.g. between 10 – 100K yuan
($1,500-15,000) has been reported.
• A “Patent Box” tax rate is available reducing corporate taxes paid on income derived from IP.

10. IP strategies for business in China
The views expressed here are those of the author and do not reflect the official policy, or position of Qualcomm Incorporated.
File Early
● Chinese courts becoming friendlier to foreign patent owners making sense to protect your R&D investment.
● Chinese applications maturing into patents may leave foreign firms more vulnerable to charges of infringement.
● China is a first-to-file country rewarding early filers; file early in China to protect your invention.
Focus on Quality
● Focus on patent quality that can withstand a challenge, and build portfolio strategically.
Prevent IP Loss.
● File timely, provide sufficient disclosure claiming the adequate amount of disclosed subject matter.
● Put employee oversight policies in place to protect confidential information; secure proper ownership information.
Avoid Infringement
● Avoid infringing IP of others; start planning during early the earliest stages of market research and product planning.
Source: Executive Counsel, August/September 2011, Lim, E.H., Puknys, E.R.