China has historically been a small player in regard to patent filing. As recently as a decade ago,[i] China’s patent office, SIPO, which serves a country with three times the population of the United States, processed less than half as many patent applications as the USPTO, America’s patent and trademark office. Since the late 1990’s, Chinese patent filing has grown meteorically, and China has become a patent powerhouse. This increase has occurred both within China, turning SIPO into the busiest patent office in the world[ii], and internationally.
There are multiple reasons for this growth. It is caused partly by China’s evolution from an industrial nation into an innovative nation[iii], and partly by China’s role as a leader in many cutting-edge technologies, such as artificial intelligence[iv] One of the largest drivers of Chinese patent filing, however, is the Chinese government’s subsidy program, the “Made in China 2025”[v] initiative, which provides funding designed to encourage Chinese innovation. While China has experienced large increases in innovation overall, in practice these subsidies have primarily just increased the number of patent filings[vi], while doing a much poorer job of stimulating research and development.
These subsidies have encouraged a large number of low-quality patent applications, particularly in the subsets of Chinese patents that are subject to a lower degree of scrutiny before grant. As stated by Wang Xiang, the head of Orrick’s China IP practice: “A lax approval process for the less inventive categories has led to a flourishing of filings, where people literally copy a patent in the U.S. and seek approval in China, often with the intention of parlaying that into a settlement fee”[vii].
China’s “patent first, innovate later” culture is shown in the low quality and abnormally high rejection rate of Chinese patent applications[viii], both domestically and internationally. The patents obtained by Chinese industry are also maintained at a much lower rate than those from comparable nations, an indicator that they are not particularly valuable.
In recent years, China has also made these subsidies available for foreign patent applications made by Chinese citizens[ix]. This has led to a large number of patent filings abroad and has made China the fifth largest international patent filer. Many of the applications that are filed internationally are the same low-quality applications that are filed within China, which presents a problem to patent examiners globally, as these applications must be examined with the full scrutiny of any other application.
The question becomes, what should the IP offices of the world, SIPO included, do about the volume of low-quality applications that are being produced? These applications are being submitted to patent offices that are generally facing large backlogs[x] in unexamined patent applications. It will be difficult for patent offices to review the large number of Chinese applications, and these applications will add to the existent patent backlog. Backlog reduces the amount of time and effort that an examiner can spend on a given application and imposes unnecessary costs on a nation’s industry[xi].
In my opinion, the problems associated with this over-burdening volume of poor-quality patent applications can be resolved through the greater use of artificial intelligence by patent offices worldwide[xii]. Artificial intelligence[xiii] is software that learns how to complete tasks which have traditionally required the use of human thought. It can examine the data given to human decisions makers, observe the outcome of these decisions, and create “rules” with which to make its own decisions. Patent examination produces a large volume of decision-making data, making it particularly ideal for exploitation by artificial intelligence.[xiv]
Given the high cost of an examiner’s time, the large number of subsidized applications being produced by Chinese industry should act as a motivator for further adoption of artificial intelligence by the world’s patent offices. Artificial intelligence could be used in a variety of ways[xv] that could help regulate the massive number of applications. It could be used to determine the field of technology that an application falls into, if an application describes patentable subject matter, if it overlaps with prior art, and even if it meets a country’s drafting requirements. And, because of scalability, artificial intelligence can process a large number of applications within a much shorter period of time than a human examiner, at a lower cost.
Adapting this new technology would better enable patent offices worldwide to reward Chinese innovators for legitimate contributions to technology, while also managing the worst of the mass filing conundrum.
Written by Keenan Fast, Osgoode JD Candidate, enrolled in Professors D’Agostino and Vaver 2019/2020 IP & Technology Law Intensive Program at Osgoode Hall Law School. As part of the course requirements, students were asked to write a blog on a topic of their choice.
[i]Jane Croft, “China plays catch-up with Europe and US in patents filing race”, Financial Times (9 July 2019), online: <https://www.ft.com/content/8ecf7464-8d05-11e9-b8cb-26a9caa9d67b>
[ii] “World Intellectual Property Organization”, WIPO Intellectual Property Statistics Data Center, online: <https://www3.wipo.int/ipstats/>
[iii] Michael C. Wenderoth, “China Is Innovating Faster Than You Imagine”, Forbes (11 April 2018), online: <https://www.forbes.com/sites/michaelcwenderoth/2018/04/11/china-is-innovating-faster-than-you-imagine/#3eb8f425273d>
[iv] Louis Columbus, “How China Is Dominating Artificial Intelligence”, Forbes (18 December 2018), online: <https://www.forbes.com/sites/louiscolumbus/2018/12/16/how-china-is-dominating-artificial-intelligence/#4949444d2b2f>
[v] “Premier Li on ‘Made in China 2025’”, The State Council of the People's Republic of China, online: <http://english.www.gov.cn/premier/news/2017/08/10/content_281475781726536.htm>
[vi] Lulu Yilun Chen, “China Claims More Patents Than Any Country—Most Are Worthless”, Bloomberg (26 September 2018), online: <https://www.bloomberg.com/news/articles/2018-09-26/china-claims-more-patents-than-any-country-most-are-worthless>
[vii] Ibid
[viii] Ibid
[ix] “Notice on Printing and Distributing the Measures for the Administration of Funding for Foreign Patent Special Funds”, The Central People's Government of the People's Republic of China (31 May 2012), online: <http://www.gov.cn/zwgk/2012-05/31/content_2149501.htm>
[x] Patent Backlogs and Mutual Recognition, London Economics (January 2010) at 59, online: <https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/328678/p-backlog-report.Pdf>
[xi] Mark Schultz & Kevin Madigan, “The Long Wait for Innovation: The Global Patent Pendency Problem Center for the Protection of Intellectual Property”, Center for the Protection of Intellectual Property (2016) at 5, online: <https://sls.gmu.edu/cpip/wp-content/uploads/sites/31/2016/10/Schultz-Madigan-The-Long-Wait-for-Innovation-The-Global-Patent-Pendency-Problem.pdf>
[xii] “Index of AI initiatives in IP offices”, WIPO online: <https://www.wipo.int/about-ip/en/artificial_intelligence/search.jsp>
[xiii]BJ Copeland, “Artificial intelligence”, Encyclopædia Britannica online: <https://www.britannica.com/technology/artificial-intelligence>
[xiv] Steve Lohr, “The Age of Big Data”, The New York Times, (11 February 2012), online: <https://www.nytimes.com/2012/02/12/sunday-review/big-datas-impact-in-the-world.html>
[xv] Tabrez Y Ebrahim, “Automation & Predictive Analytics in Patent Prosecution: USPTO Implication & Policy” (2019) 35 Ga St U L Rev at 57 online <https://readingroom.law.gsu.edu/cgi/viewcontent.cgi?article=2978&context=gsulr>