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The Economist on Patents and Innovation in China

From Innovation in China: Patents, yes; ideas, maybe: Chinese firms are filing lots of patents. How many represent good ideas?The Economist (Oct. 14, 2010)

Innovation in China

Patents, yes; ideas, maybe

Chinese firms are filing lots of patents. How many represent good ideas?

Oct 14th 2010 | HONG KONG

NO PATENT law existed in China until 1985, and the country has a deserved reputation for trampling on intellectual-property rights. But that could be changing. Anxious to promote domestic innovation, the Chinese government has created an ecosystem of incentives for its people to file patents.

Professors who do so are more likely to win tenure. Workers and students who file patents are more likely to earn a hukou (residence permit) to live in a desirable city. For some patents the government pays cash bonuses; for others it covers the substantial cost of filing. Corporate income tax can be cut from 25% to 15% for firms that file many patents. They are also more likely to win lucrative government contracts. Many companies therefore offer incentives to their employees to come up with patentable ideas. Huawei, a telecoms-equipment manufacturer that craves both government contracts and global recognition, pays patent-related bonuses of 10,000-100,000 yuan ($1,500-15,000).

Such incentives produce results. In 2008 Huawei filed more international patents than any other firm in the world. China’s overall patent filings grew by 26% a year between 2003 and 2009, says a new report from Thomson Reuters, an information service. Growth was much slower elsewhere: 6% in America, 5% in South Korea, 4% in Europe and 1% in Japan.

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See also my posts Don’t Bet on China, Intellectual Property Imperialism, and Kinsella: How Intellectual Property Hampers Capitalism (Transcript):

We have America and its lackey, the World Trade Organization, pressuring other countries, like Russia, India, China, to adopt our draconian IP laws.

China is now actually coming into shape a little bit.  They’re now third in place, behind Japan and America in terms of patent filings which is a radical change from five to ten  years ago, due to American pressure.  We have diplomatic pressure being exerted on Canada right now to adopt some of our copyright provisions that are in our Digital Millennium Copyright Act which make IP law much worse and more draconian.

Even worse, right now pending, is the secret anti-counterfeiting trade agreement or ACTA.  It’s a treaty that’s being negotiated right now.  I suspect it will pass, probably this year, and it’s going to be horrible.  It’s going to impose patent and copyright type protections around the world, including Digital Millennium Copyright Act, or DMCA type provisions.  As science fiction author Corey Doctorow observed, the act is a “radical rewriting of the world’s Internet laws taking place in secret without public input.”

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