As highlighted in a report recently published by the US Patent and Trademark Office (USPTO), entitled Trademarks and Patents in China: The Impact of Non-Market Factors on Filing Trends and IP Systems, the high rate of Chinese patent and trademark filings in recent years is widely believed to have been influenced by government subsidies and other ‘non-market factors’. Since at least 2011, some Chinese applicants appear to have been taking advantage of the Australian innovation patent system to maximise the subsidies they are able to claim for foreign patent grants. In 2020, Chinese residents were by far the largest users of the system, filing more innovation patent applications than all other nationalities combined.
But could it be that the days of government subsidies, and an associated massive growth in patent applications originating in China, are drawing to a close?
On 27 January 2021, the China National Intellectual Property Administration (CNIPA) announced, in a notification entitled ‘Notice of the CNIPA on Further Strictly Regulating Patent Application Behaviour’ (in Chinese) (‘Notice’), that many lucrative subsidies must end by the middle of this year, with all others to be phased out by 2025. (A brief report of the Notice can be found on the China IP Law Update blog, while a Google translation of the Chinese original is quite comprehensible.)
The Notice states that the overriding objective of the new regulations on patent application behaviour is:
In order to thoroughly study and implement Xi Jinping’s thoughts on socialism with Chinese characteristics in the new era; to earnestly implement the decisions and deployments of the Party Central Committee and the State Council; and to earnestly promote China’s transformation from a major importer of intellectual property rights to a major country of IP creation, and from the pursuit of quantity to the improvement of quality.