Most Chinese Patents Are Being Discarded By Their Owners Because They Are Not Worth The Maintenance Fees To Keep Them

from the more-patents-do-not-mean-more-innovation dept

Techdirt has been writing about China and patents for years. One recurrent theme is that the West is foolish to encourage China to embrace patents more enthusiastically, since the inevitable result will be more Chinese companies suing Western ones for alleged infringement. The second theme -- related to the first -- is that the Chinese government is unwise to use patents as proxies for innovation by offering incentives to its researchers and companies to file for patents. That leads people to file as much as possible, regardless of whether the ideas are original enough to warrant patent protection. One of the surest guides to the value of a patent is whether those who filed for them are willing to pay maintenance fees. Clearly, if patents were really as valuable as many claim they are, there would be no question about paying. An article in Bloomberg reveals how that is working out in China:

Despite huge numbers of filings, most patents are discarded by their fifth year as licensees balk at paying escalating fees. When it comes to design, more than nine out of every ten lapses -- almost the mirror opposite of the U.S.

The high attrition rate is a symptom of the way China has pushed universities, companies and backyard inventors to transform the country into a self-sufficient powerhouse. Subsidies and other incentives are geared toward making patent filings, rather than making sure those claims are useful. So the volume doesn't translate into quality, with the country still dependent on others for innovative ideas, such as modern smartphones.

The discard rate varies according to the patent type. China issues patents for three different categories: invention, utility model and design. Invention patents are "classical" patents, and require a notable breakthrough of some kind, at least in theory. A design patent could be just the shape of a product, while a utility model would include something as minor as sliding to unlock a smartphone. According to the Bloomberg article, 91% of design patents granted in 2013 had been discarded because people stopped paying to maintain them, while 61% of utility patents lapsed within five years. Even the relatively rigorous invention patents saw 37% dumped, compared to around 15% of US patents that were not maintained after five years.

This latest news usefully confirms that the simplistic equation "more patents = more innovation" is false, as Techdirt has been warning for years. It also suggests that China still has some way to go before it can match the West in real inventiveness, rather than the sham kind based purely on meaningless patent statistics.

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Filed Under: china, innovation, monopolies, patents, useless patents


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  1. icon
    Federico (profile), 5 Oct 2018 @ 3:26am

    Fees increasing over time

    I think it makes sense for fees to grow over time for a patent. The fact that patents get discarded is a feature.

    «It costs 900 yuan ($131) a year to own an invention patent, a price that rises to as much as 8,000 yuan later in its life. For the other categories, tolls rise from 600 yuan to 2,000 yuan annually in the last two years.»

    The costs in USA seem much lower, no wonder there's no incentive in discarding patents once you've got them in:
    https://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-schedule

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