China has overtaken America again: Patents and Liberty 1

 

As the electronics revolution was to the 20th century, the bio medical revolution will be to the 21st century. This time, China intends to be an innovator, not a copier; a leader, not a follower.

The State Intellectual Property Office granted 1.26 million patents in 2012 to domestic and overseas applicants, up 31.25 percent from a year earlier, according to data released by the office Tuesday.The office received 2.05 million patent applications from home and abroad in 2012, an increase of 25.77 percent from a year earlier, office commissioner Tian Lipu said at a conference on intellectual property rights.The office grants patents in three categories: inventions, utility models and designs.The number of invention patents granted by the office jumped 26.1 percent to 217,000 cases last year, Tian said.By the end of 2012, China had 435,000 legitimate invention patents (not including those from Hong Kong, Macao and Taiwan), which represent an average of 3.23 invention patents for every 10,000 Chinese.
The government aims to have an average of 3.3 legitimate invention patents per 10,000 people by 2015, according to the 12th Five-Year Plan (2011-2015).
Source:Xinhua

In 2009, two Chinese scientists made a major bio medical breakthrough, hailed worldwide, by cloning a mouse from its skin cell. One is Zeng Fanyi, who earned her MD and PhD degrees at the University of Pennsylvania and is vice-director of Medical Genetics at Shanghai Jiao Tong University. Zeng and her team are now pursuing another pioneering program: mammary gland bio reactors.

 

What’s that? Transgenic animals, conceived artificially with injected, targeted genes that express specific functions. The animals secrete in their breasts pharmaceutical proteins that can be used to cure hereditary diseases. While Zeng’s transgenic procedure works, its commercialization remains unrealized. So Zeng’s research receives ample support from the government, which has been increasing science funding at over 20 percent per year. But bringing new pharmaceuticals to market is a long and perilous process. Only 8 percent of China’s investments have become effective drugs. – says Robert Lawrence Kuhn in “China Daily”

 
According to the Economist :

China has overtaken America again. Its patent office received more applications than any other country’s in 2011. (The numbers were released in December.) But look closer, and the picture is murkier.

In America and Europe, roughly half of patent applications are lodged by foreigners. This used to be true in China, but in the past few years filings by locals have surged to three-quarters of the total (see chart 1). Is this because China has suddenly become more innovative? Or is it because government incentives have prompted people to file lots of iffy patent applications, which the local patent office has a tendency to approve?

There is no reliable way to measure a patent’s value. But one can use a rough-and-ready yardstick: in how many places did the inventors seek a patent for the same technology? If it is a good idea, they will try to patent it in lots of places. If they just want to pocket a Chinese subsidy, they won’t bother.

Data from the UN’s World Intellectual Property Office suggest that some of the apparent spurt in Chinese innovation is illusory. Or at least, patents in China are probably less valuable than those in America or Europe.

Hardly any Chinese inventors seek to patent their ideas abroad. Between 2005 and 2009 fewer than 5% did (see chart 2). In America, the figure was 27%; in Europe, more than 40%. Geeks in the West should not relax, but it is not clear that their Chinese rivals have yet outstripped them.

 
 

As Robert Lawrence Kuhn (an international corporate strategist and investment banker , author of The Man Who Changed China: The Life and Legacy of Jiang Zemin and How China’s Leaders Think) puts it:

China’s leaders call for “indigenous innovation” – the country must develop its own technologies and proprietary products. Yet China’s industrial transformation from assembler-manufacturer to innovator-designer is complex, risky, open to surprise, and will surely take time.
Moreover, innovation requires freedom. To become an increasingly innovative society, China must become an increasingly free society. China must also enforce IPRs and rethink the essence of education.
China’s new leaders face the challenge of innovation.

     The Chinese people are watching.

 

Other concerns include the compulsory licensing of patents. It is unclear how the government will determine that a patent is being misused, or how much patent owners will be paid if they are forced to license their patent.

 
China’s new Patent Law is intended to help accelerate China’s transition to an “innovation economy.” Many companies, however, are concerned that it could also impair their research and development efforts in China, compel the transfer of patented technologies and create further uncertainties in China’s IPR system.

According to Ha-Joon Chang (professor of economics in in the Faculty of Economics, University of Cambridge) author of  Kicking Away the Ladder:  How the Economic and Intellectual Histories of Capitalism Have Been Re-Written to Justify Neo-Liberal Capitalism: 

“There is currently great pressure on developing countries to adopt a set of “good policies” and “good institutions” – such as liberalisation of trade and investment and strong patent law – to foster their economic development. When some developing countries show reluctance in adopting them, the proponents of this recipe often find it difficult to understand these countries’ stupidity in not accepting such a tried and tested recipe for development. After all, they argue, these are the policies and the institutions that the developed countries had used in the past in order to become rich. Their belief in their own recommendation is so absolute that in their view it has to be imposed on the developing countries through strong bilateral and multilateral external pressures, even when these countries don’t want them.”

 

As in:

http://www.economist.com/news/business/21569062-valuing-patents?fsrc=scn/fb/wl/pe/valuingpatents

http://www.chinadaily.com.cn/bizchina/2012-10/18/content_15828229.htm

http://online.wsj.com/article/SB10001424052748703575004575042691331624302.html

http://en.ce.cn/Business/Macro-economic/201301/09/t20130109_24014996.shtml

Ha-Joon Chang, “Kicking Away the Ladder”, post-autistic economics review, issue no. 15, September 4, 2002, article 3. http://www.btinternet.com/~pae_news/review/issue15.htm

http://www.amcham-shanghai.org/AmChamPortal/Event/EventPrint.aspx?EventId=3678

Leave a Reply