Image source @ Visual China
Sentence | Lucid Ambition
On April 24, Shen Changyu, director of the State Administration of Intellectual Property, introduced at a press conference on the development of intellectual property rights in China that a total of 696,000 invention patents were authorized in the past year, and the number of high-value invention patents per 10,000 population reached 7.5, an increase of 1.2 over the previous year.
According to the GII 2021 report, China rose from 14th in 2020 to 12th place, ranking first among medium-sized economies.
In the same year, China filed 69,500 international patent applications through the Patent Cooperation Treaty (PCT), an increase of 0.9% year-on-year, ranking first in the world for three consecutive years. And Huawei, OPPO, BOE, Ping An Technology, Tencent, Xiaomi, Shenzhen Dajiang and other 13 Chinese enterprises ranked in the top 50 of the global applicant rankings, of which Huawei ranked first for five consecutive years.
In the Madrid and Hague Systems, China also ranked third and tenth.
All this shows that in the more than 40 years since China joined the World Intellectual Property Organization in 1980, China's intellectual property has made extraordinary achievements from scratch and from small to large, and has become an important pole in the global innovation map.
However, in the midst of a thriving scene, cold thinking is also required.
As China's manufacturing industry continues to upgrade to high-end and intelligent, the intellectual property trade deficit has also expanded year by year in recent years, reaching 226.3 billion yuan in 2021.
This reflects that China does not occupy a leading position in the global manufacturing system, and the "pain points" and "card points" in the industrial chain and supply chain are still common, and they do not have the competitive advantage of a large number of internationally renowned brands.
In fact, blindly pursuing a new height in the number of applications cannot bring about a role that matches the scale, and will also leave room for various pseudo-innovations such as "number innovation" and "replication innovation". Not only does it consume innovation power and waste R&D funds, but it will also drift away from or even run counter to the original intention of innovation.
On the contrary, in terms of intellectual property protection, achievement transformation, application quality, structural adjustment, and rule-making, China still has a lot of room for improvement and optimization. Only by solving these problems can we finally achieve the strategic goal of leaping from a big intellectual property country to an intellectual property power.
The pain of intellectual property rights that has plagued Chinese enterprises for many years also needs to be treated with the right medicine.
01 The number of patents does not equal the ability to innovate
In 2020, the top 10 countries with IP trade surpluses in the world are all developed countries, and half of the top 10 IP trade deficit countries are emerging economies, clearly reflecting their respective positions in the global manufacturing system.
Among them, the United States, Germany and Japan are the top three surplus countries, with a total surplus of 83%, and they are also the main importers of China's intellectual property rights. Imports from the United States are mainly communication technology and automobile technology, and imports from Germany and Japan are mainly automobile technology.
The introduction of IP from developed economies is an important way for emerging economies to achieve technological accumulation.
At present, China is the fifth largest intellectual property trading economy, with import and export scale increasing from less than US$1 billion in 1997 to US$46.3 billion in 2020, accounting for 8% of the total international trade in services in the same period.
At the same time, China is also the largest country in the introduction of intellectual property rights, with imports reaching US$37.8 billion in 2020, accounting for 10% of imports of trade in services in the same period. From 2002 to 2020, the average annual growth rate was 15%.
In 2021, China's intellectual property imports amounted to US$46.8 billion, an increase of 24%, accounting for 11% of imports of trade in services in the same period. The deficit was $35.1 billion, up 20 percent.
For comparison, South Korea, like China, started late, had an intellectual property trade deficit of just $30 million in 2021. This is $2 billion less than in 2020 and the lowest since 2010. Deficits were against the United States, the United Kingdom and Japan, with only a surplus of $2.58 billion for China. The GII also jumped from tenth place in 2020 to fifth place in 2021.
However, the introduction of a large number of intellectual property rights has indeed helped China's economy achieve high-quality development and optimized the structure of export commodities.
In 2021, China's exports of high-tech products totaled US$979.6 billion, an increase of 26%, accounting for 30% of the total export value. Exports of mechanical and electrical products amounted to US$1,985.7 billion, an increase of 29%, accounting for 59% of total exports. Among them, traditional key products such as computers, mobile phones, and home appliances have achieved steady growth, and the export of new energy products such as electric vehicles, lithium batteries, and photovoltaics has maintained rapid growth.
On the other hand, imports of mechanical and electrical products also increased by 20%, of which imports of integrated circuits increased by 24%, accounting for 38% of the mainland's imports of mechanical and electrical products.
Data from the first quarter of 2022 show that China exported 3.05 trillion yuan of mechanical and electrical products, an increase of 9.8%, accounting for 58.4% of the total export value. Imported mechanical and electrical products amounted to 1.71 trillion yuan, an increase of 2.7%, accounting for 40.8% of the total import value, of which integrated circuits increased by 12.4%.
This shows that the innovation ability of "Made in China" in the fields of core basic components and basic manufacturing processes, basic electronic components, key basic materials, and key software is still insufficient.
A survey report by the National Development and Reform Commission last year also said that China's CPU self-sufficiency rate is less than 1%, and the self-sufficiency rate in the field of high-end analog chips is less than 5%. The high-performance reducers, high-precision servo drive systems, advanced controllers, and new sensors required for the development of the robot industry are also highly dependent on imports.
This means that if the ability of independent innovation cannot be truly strengthened, with the continuous transformation and upgrading of the industrial structure, the external dependence of China's economy will continue to increase.
In fact, since China began to implement its national IP strategy in 2008, it has had a lingering "quantitative complex" due to its late start. The trend of "emphasizing quantity over quality" and "emphasizing application over implementation" prevails, and even innovates simply for the sake of supporting the façade and assessment and promotion.
This leads to a patent bubble blowing bigger and bigger, taking universities as an example, the number of patents reached more than 5 times that of European and American universities. For example, Stanford, the effective patents in 2020 are 2117, which is only 20% of Tsinghua University. But Tsinghua's patent conversion rate is only 9%, less than one-fifth of that in the United States.
As a result, a large number of "pseudo-innovative" achievements can only be placed on the booth, which has become an unspeakable hidden in the field of intellectual property.
In 2019, a survey report by the State Intellectual Property Bureau showed that more than 40% of the patents shelved by universities and scientific research units were for the purpose of completing patent review or assessment and obtaining awards.
In response, in February 2021, the State Knowledge Office identified 11 types of irregular patent application behaviors that are not intended to protect innovation, pointing out that "abnormal patent application behaviors that are not intended to protect innovations are eliminated".
02 Insufficient international competitiveness of intellectual property rights
From 2013 to 2019, the number of PCT applications in China maintained nearly double-digit growth until it broke the first record held by the United States for 40 consecutive years and jumped to the top spot in the world.
This has also led to a growing export of intellectual property rights.
Before 2015, the mainland's intellectual property exports were less than US$1 billion per year. From 2015 to 2020, the average annual growth rate is 51%, and exports will reach $11.7 billion in 2021.
In the top 100 of the world's best technology clusters, Chinese mainland also occupies 19 seats. Shenzhen, Hong Kong, Guangzhou and Beijing ranked 2nd and 3rd, second only to The Yokohama area of Tokyo.
Among them, Shenzhen's PCT application volume in 2021 was 17,400, accounting for 25.5% of the total, leading the country for 18 consecutive years. This has led to the unique aggregation phenomenon of the Chinese PCT: "The world looks at China, China looks at Guangdong, and Guangdong looks at Shenzhen".
In Guangdong Province's top 20 national patent rankings from 2015 to 2021, Shenzhen enterprises, scientific research institutions and universities account for more than half.
It can be seen that Shenzhen is the cream of China's intellectual property rights, but it also condenses all the problems.
Taking Huawei, Ping An Technology, ZTE, Tencent, DJI, Huaxing Optoelectronics, etc., as examples, the patents applied for are basically concentrated in the fields of information and communications, computer technology, drones, and Internet technology.
This is basically in line with the fact that "digital communications" and "computer technology" have always been ranked in the top two areas of PCT filings in the PCT reports of the State Intellectual Property Office over the years. In 2021, computer technology (9.9%), digital communications (9.0%), followed by medical technology (7.1%), electrical machinery (6.9%) and measurement (4.6%).
However, in the key areas of "card neck" such as basic materials, chips, operating systems, integrated circuit manufacturing, and high-end medical devices, they all lag behind the PCT patent layout of the United States. These areas are precisely IP-intensive industries, and patents play a pivotal role.
This also makes China's intellectual property less competitive in international competition, with World Bank data showing that China's intellectual property royalties exports in 2020 were only 7.5% of the same period as the United States.
Borrowing from the international common intellectual property quality indicators, it can also be seen that the gap between China and the innovation powerhouse, "large but not strong, many but not excellent, structural imbalance" is the main problem.
It is mainly reflected in the structural problems of scientific research investment, and the proportion of basic research and applied research is low.
From 2019 to 2021, China's basic research investment accounted for 6%, 6% and 6.09% respectively, and from 2019 to 2020, applied research investment accounted for 11.3% and 11.3%, respectively.
In contrast, in 2019, the proportion of basic research and applied research investment in the United States was 16.4% and 19.0%, respectively, France was 22.7% and 41.3%, the United Kingdom was 18.3% and 42.1%, South Korea was 14.7% and 22.5%, and Japan was 13.0% and 19.4%.
In comparison, in 2021, the proportion of Basic Research expenditure in China will be 6 to 12 percentage points lower than that of the United States and Japan, and far lower than that of innovative European countries.
The structure of IP applications also needs to be adjusted. Domestic patents are still dominated by utility models and designs, and the proportion of invention patents with higher levels of inventive step is far lower than that of developed countries.
By the end of 2021, the effective amount of domestic invention patents in China accounted for only 19% of the effective amount of all domestic patents, and from January to March 2022, the effective amount of domestic invention patents accounted for 12.8% of the effective amount of all domestic patents. Both are well below the 63% and 55% in the U.S. and Japan (by the end of 2020).
In addition, the quality of China's invention patents is still quite different from that of developed countries. By the end of 2020, the proportion of valid invention patents in China that lasted for more than 10 years was only 12.3%, with an average maintenance period of 7.6 years, lower than the 9.7 years and 11.2 years (2019) of the United States and Germany.
The average number of claims for authorized invention patents in China is 8.3 (2018), which is only half that of the United States. Simultaneous filing of patent applications (same family patent applications) to multiple overseas patent offices for the same technology solution accounted for about 6% of all patent applications (2019), 10 and 10.5 percentage points lower than that of the United States and Japan, respectively. Iso registered standard essential patents are also only one-twentieth that of the United States.
At present, the statistical standards such as high-value invention patents adopted by China are still quite far from the internationally recognized high-value invention patents and high-quality intellectual property rights.
This is not enough to achieve the goal of becoming one of the world's innovative countries and building an IP powerhouse.
03 It is difficult to realize the transformation of patent achievements
According to the "2020 China Patent Survey Report" released by the State Intellectual Property Office, the industrialization rate of effective invention patents of enterprises is 44.9%, 11.3% of scientific research units, and only 3.8% of universities.
According to a 2017 inventory of Stanford University's patent licensing data in the United States over the past 47 years, the effective conversion rate in the United States after 2000 was basically stable at 50%.
In order to achieve the smooth and efficient transformation and realization of patent results, it is usually necessary to have five conditions: First, the public scientific research system can produce results that are easy to be industrialized. Second, enterprises have technical needs and have the ability to absorb technology. Third, intermediary service institutions have professional service capabilities; fourth, the scientific and technological financial system is developed and can provide rich and diverse financial support. Fifth, policy environmental protection knowledge production can stimulate the transformation of achievements.
At present, these five conditions are insufficient in China's current level of intellectual property operation.
According to IncoPat's search data, as of the end of 2021, the proportion of authorized invention patents that have been pledged or preserved in China is only 1.5%, compared with about 16% in the United States; the proportion of authorized invention patents that have been licensed is 1.2%, and the proportion of authorized invention patents in the United States is 29.7%.
The main reason for this phenomenon is the lack of a unified IP-led trading market throughout the country. From the perspective of the number of institutions, the number of national intellectual property rights and scientific and technological achievements property rights trading institutions is still insufficient. From the perspective of trading rules, the country lacks a unified market service standard and system.
At present, the national intellectual property finance is still dominated by intellectual property pledge financing, and the service models of intellectual property trust, securitization, venture capital, and insurance have not yet started.
To this end, the Opinions on Accelerating the Construction of a Unified National Market issued on April 10 made the latest plans for the development of intellectual property rights, including improving the property rights protection system and the evaluation and trading mechanism. Strengthen the internationalization of patents, actively participate in and promote the formation of international intellectual property rules, etc.
In particular, it is mentioned that it is necessary to improve the cross-regional jurisdiction system of intellectual property courts and smooth the docking mechanism between intellectual property litigation and arbitration and mediation. Strengthen enforcement of intellectual property rights protection.
In 2021, China investigated and dealt with 50,100 illegal cases in the fields of patents and trademarks, handled 49,800 administrative adjudication cases of patent infringement disputes, accepted 64,800 cases of mediation of intellectual property disputes, investigated and handled 2,957 cases of infringement and piracy, and deleted 1,197,000 links of infringing pirates.
The social satisfaction with intellectual property protection has further increased to 80.61, and on the basis of last year's 134 intellectual property protection measures, a new round of 80 131 measures has been further identified in 2022.
However, china's enforcement and punishment of intellectual property rights are still not as strong as those of the world's intellectual property powers.
According to the International Property Index Report released by the International Property Union last year, China ranked 46th by ranking global countries in terms of intellectual property protection, patent protection, and penalties for piracy, far lower than most countries in the United States and Europe.
At present, China has completed the original accumulation stage of the number of patents, and has reached a critical moment of breakthrough from "quantity" to "quality".
To this end, the Outline for the Construction of an Intellectual Property Power (2021-2035) promulgated in September 2021 began to correct deviations from the national level: "The mainland should change from a big country in the introduction of intellectual property rights to a big country in creation, and from the pursuit of quantity to the improvement of quality" to accelerate in an all-round way. The 14th Five-Year Plan for the Protection and Application of Intellectual Property Rights in October also takes "quality first" as the primary basic principle.
It also proposes to implement the patent navigation project, improve and improve the effectiveness of intellectual property transfer and transformation, and promote the coordinated development of technology, patents and standards.
However, China still needs to measure its own level of intellectual property development by international standards, and rely on core technologies and well-known brands to enter the ranks of innovation powerhouses and intellectual property powers.