Patenting and Innovation Strategies in China
Ivey Business Journal
Despite China’s rapid economic and technological development, its intellectual property rights (IPR) protection environment is inadequate. Foreign companies and Chinese technology firms like Lenovo, Huawei, and Haier are pressuring the Chinese government for stronger protection. The government, in turn, wants to enhance innovative capacity in science and technology to boost economic progress, climb the value chain, and reduce dependence on foreign technologies. Patent applications in China have dramatically increased, particularly technology patents for strategic or defense purposes. The quality of the de facto IPR system and enforcement varies across regions, being more robust in the coastal provinces and major cities. Previous studies on IPR have mostly focused on the United States and Europe, not China, yet it is crucial for firms operating in China to understand its IPR environment. This article proposes four strategies for patenting in the country.
1) Incremental patenting is a strategy for complex technological products (i.e. semiconductors, communications, computers) in regions with weak IPR protection. It focuses on the lesser known utility-model patents, which are cheaper, granted faster, and shorter in duration than invention patents. 2) Effectual patenting is for complex technological products in regions with good IPR protection. It is suited to firms with technological products of higher strategic value. 3) Augmented patenting is for discrete technological products (i.e. chemicals, biotech, pharmaceuticals, life sciences) in regions with weak IPR protection. It is ideal for products with higher economic value. 4) Foundational patenting is for discrete technological products in regions with strong IPR protection. This strategy provides the strongest IPR protection possible.
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