In March 2021, the Fourteenth Five-Year Plan for National Economic and Social Development and the Outline of 2035 Long-Term Goals (the "Outline") by the State Council received attention in the global innovation community. The Outline reveals a major shift in IP policy. It affirms that funding for intellectual property applications has entered into history. In addition, the resource so saved will apply to strengthening support for IP's subsequent transformation, utilization, administrative protection, and public services in the next stage.
The affirmative position signals that China's innovation ecosystem is turning over a new leaf.
Review of the previous long-standing policy
Two months earlier, the US Patent and Trademark Office (USPTO) released a report: Trademarks and Patents in China. The report shows the impact of non-market factors on IP systems in China.
The report points out that:
"Absent consideration of the role of non-market factors, cross-border comparisons based on the raw number of trademark and patent applications risk overstating brand creation and innovation activity in China. These non-market factors are also undermining domestic and foreign registries, stretching the capacity of China's patent and trademark examiners and review authorities, and narrowing the scope of available protection for legitimate rights holders". *
China always comes under such criticism for its emphasis on IP application volume over quality. But why had the Chinese patent and trademark authority not changed such policy after facing criticism for an extended period?
By observing the practices of the Chinese patent and trademark authorities, "Innovation's Crouching Tiger" (ictiger2020.com) took a retrospective insight into the former quantity-first policy. As the text points out, the administrative agency may have anticipated that the changes in quantity of patents and trademarks would also lead to changes in quality.
Two observations to note
Because of the high IP application volume stimulated by the incentive policies, the IP service industry has become familiar with basic IP service and experimented with new service models. For example, quite a few service agents have found their respective market niches. Some of them have even gone a step further. They have developed online business models to provide IP-related services that once needed face-to-face, in-person meetings.
Further, professionals, such as lawyers, patent agents, and valuation professionals, have been accumulating hands-on experience with various kinds of IP work. They have been learning about novel IP commercialization approaches, such as the patent pledge and copyright securitization.
These two developments are not common even in more mature countries such as the US or UK.
In this environment, the experience of Chinese IP professionals' has been accumulating at a rapid pace. This achievement may be one of the "qualitative changes" the administrative authority hoped to see when adopting such aggressive means for promoting IP commercialization.
It's worth mentioning that China's IP-based Industries had experienced a high-quality development during the 13th Five-Year Plan period (2016-2020), and that in 2020, the Chinese IP system had reached new heights, as discussed in the article "The Secret Driving Force for China's Solid IP Growth" .
With both the experience and patent amount built up the leadership now emphasizes promoting high-quality development, which is the priority for the time period for the 14th Five-Year Plan (2021-2025), and is focusing on strengthening support for subsequent transformation, utilization, administrative protection, and public services. **
Interested in gaining more insights into China's innovation ecosystem?
How does China's innovation ecosystem look behind-the-scenes? What kind of business opportunities are available for global participants? Read more about China's IP ecosystem's developments by visiting our blog at ICTiger2020.com or by following us on Facebook @ICTiger2020 for more related news stories. Contact the author at Jili_ICT@springip.com.
* See https://www.uspto.gov/sites/default/files/documents/USPTO-TrademarkPatentsInChina.pdf
** See https://www.cnipa.gov.cn/art/2021/1/22/art_53_156324.html