a renaissance of innovation and ip? myths, ironies, threats, & opportunity from china jeff...
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A Renaissance of Innovation and IP? Myths, Ironies, Threats, & Opportunity from China
Jeff LindsayJeff Lindsay
Head of IPHead of IP
Asia Pulp & PaperAsia Pulp & Paper
Shanghai, China Shanghai, China
IP in China: Downplayed by the WestIP in China: Downplayed by the West
• Western stereotype: China a great copier (or thief), but not an innovator.
• Western stereotype: Chinese IP can’t be taken seriously.
• E.g., the 2011 Thompson Reuters Top 100 Global Innovators (based on international patent activity, 2008-2010)– Naturally, Apple was on the list.– Tiny Liechtenstein made the list.– But ZERO top innovators came from China, Taiwan
and Hong Kong.
http://top100innovators.com/
Even though…..Even though…..
• Foxconn/Honhai Precision (Taiwan):– is the “silent” innovation partner for Apple and other
companies on the list– Has 3 x as many US patents as Apple– has 50 times as many US patents as some
companies on the TR 100 list
• Lenovo and Huawei are also major international filers with huge estates
• Invisible innovation? Invisible IP?• In fairness, I contacted the publisher….
Details: http://tinyurl.com/jefflindsay9
The Renaissance of IP in ChinaThe Renaissance of IP in China
• China had no IP system or IP laws until 1984, but has rapidly evolved since then
• Now China leads the world in patent filings
• Two Chinese companies are in the world’s top 5 international patent filers for 2011
• Many in the West are unprepared for the opportunities China’s IP boom will create.See WIPO stats on China at http://tinyurl.com/jefflindsay18
Also see http://tinyurl.com/jefflindsay13, tinyurl.com/jefflindsay14,
tinyurl.com/jefflindsay16, tinyurl.com/jefflindsay19
The Emergence of IP in ChinaThe Emergence of IP in China
Dr. Gao Lulin, Founderof China’s IP System
EPO.org at http://tinyurl.com/jefflindsay17
EPO.org at http://tinyurl.com/jefflindsay17
PCT Apps: #4 in the WorldPCT Apps: #4 in the World
http://www.globalpost.com/dispatch/news/afp/130319/global-patent-filings-rose-66-2012-wipo
#10
#4
#5
almost #3
#16#22
Scientific PublicationsScientific Publications
• World Bank reports that Chinese technical publications soared from 20,000 in 1998 to 112,000 in 2008 -- 8.5 percent of global output.
• China is now #2 in the world for scientific publications.
• Be patient. That will change.
Source: http://tinyurl.com/jeffiri6
Chinese IP MythsChinese IP Myths
• No real innovation• IP just low quality junk• International patents reveal China isn’t
serious about IP• Enforcement is a joke• There are no secrets in China, and certainly
no useful trade secret protection• China is all about IP theft, not creation and
protection
My ObservationsMy Observations
• Innovation: – looks different than in the West, but occurs in
many forms– Chinese employees can be as creative and
innovative as Western employees– cultural differences often need to be
addressed
My ObservationsMy Observations
• IP quality:– yes, often lacking, but rapidly improving– China is strengthening its law, its courts, and
its training of examiners– Chinese companies are strengthening their
systems and their patent drafting– But many companies still fear patenting key
technologies and rely too much on trade secrets
My ObservationsMy Observations
• International patents: – 2 of the top 5 filers are Chinese companies– China will soon lead the world
My ObservationsMy Observations• Enforcement :
– Difficult, but can work. Western companies can prevail over local infringers.
– IP litigation is exploding in China. Up 46% in 2012, with 87,419 civil IP cases accepted.
– Penalties are still arguably too weak. – Lack of discovery is a barrier. Guanxi, etc. can be barriers. – The proposed 4th Amendment may greatly strengthen
enforcement by adding discovery, tougher penalties, etc. • Chinese details: http://tinyurl.com/jefflindsay10• English chart: http://tinyurl.com/jefflindsay11• Commentary: http://tinyurl.com/jefflindsay20
tinyurl.com/jefflindsay12
Trade SecretsTrade Secrets
• Chinese trade secret law is very similar to US law, and is a strength of China’s IP system
• Enforcement is happening with serious penalties
• Burdens of proof can still be difficult
• Companies must take proactive steps to identify and protect trade secrets
Other ConcernsOther Concerns
• Enforcement requires patience, experience, and guanxi. Challenging.
• Corruption is being fought but remains serious, including at the academic level where students learn the wrong lessons.
• It is nearly impossible to buy legitimate movie DVDs in China. Social acceptance of copyright theft is pervasive. This may hinder general respect for IP.
Bottom LineBottom Line
• IP theft is still a serious problem.
• But China is rapidly and deliberately transforming from “cheaply copied in China” to “improved, designed, or invented in China.”
• While the West downplays China IP and innovation, China is returning to its historic role as a global leader.
See also the World Bank Report, China 2030: http://tinyurl.com/jefflindsay21
