If you can’t beat them, be like them!

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Back in 2010, the Chinese Government made a projection that by 2015 more than 1 million invention patents would be filed annually in China. Sure enough, data from the State Intellectual Property Office (SIPO) for 2015 showed 1.102 million patent applications, a new record high, rising by nearly 20% on the previous year. The Chinese government is now calling for a mind-boggling 2 million patent applications per year by 2020.

“What does this mean?” I asked my Chinese colleague and friend.

“What do you mean what does it mean,” he replied pragmatically. “It means that during 2020 our patent office will receive more than 2 million patent applications.” And there’s no reason for us to assume that China won’t hit this target.

But what does this mean for Europe? I was told that the European Patent Office has already predicted they’ll need to hire 3000 new patent examiners to deal with the anticipated spike up in new patent applications originating from China in Europe. Chinese businesses looking for international patents have so far been more focused on developing economies. Russia is a good example where we have seen a surge over the last few years from Chinese firms.

China’s worldwide innovation and patenting empire growing fast

So if China begins building a vast innovation and patenting Empire right here in our back yard won’t that pose a threat to our own freedom to do business? Isn’t it time for Europe to wake up and see how much China has changed and how quickly?

In the mid-nineties when I started in the IP business, I had no Chinese friends and no clients with any interest in China. The word on the street was: forget patenting in China, they’ll just steal your ideas and there’ll be no legal recourse. But this is not the China of today. The country is fast becoming an innovation-based super power – no longer just copying ideas, but with its own ability to create globally competitive IP value. It’s no accident that among the biggest PCT filers in the world are Chinese telecom giants ZTE and Huawei. And right behind this global success stands the might of the Chinese government, working on many dimensions: providing R&D funding through tax credits, grants and loans; education and technical assistance; and legislative encouragement through regular patent law revisions. Admittedly, it will be difficult to beat the Chinese at their own game. But if we can’t beat them couldn’t we at least try to be more like them? Europe is not China and never will be but that shouldn’t stop us from cherry-picking some of their best practices.

The same Chinese character in the word for threat is also found in the Chinese word for opportunity. As the global IP business heats up, there will be more opportunities for European businesses to maximize the benefits of their existing intellectual capital as well as more proactively expand their innovation capacity.

European could take lessons from China

Our governments in Europe could also take some lessons from China in driving domestic innovation. Incentivizing business to file for more patents would be a good place to start. In China in order to achieve the prestigious title of ‘Technology Company’ you need to have filed for a certain number of trademarks, patents, or designs. Perhaps European Governments could link the number of patents held by a company to its potential for R&D funding and tax reductions? European legislators also have plenty of room for amendments to patent law that would help facilitate the processes for seeking IP protection here.

Looking back on my own graduation from a Finnish science and technology university 22 years ago, I recall I knew nothing about patenting or intellectual property rights, even though I’d been groomed for a career in Finnish industry. And I’m afraid the situation is still a bit the same today. The Masters of Sciences in technology graduates I meet still don’t know much about IPR.

I recently gave a speech to a business forum on the IP industry and surprised them by arriving dressed in jeans and a work shirt. Moving through the sea of pin stripes and formal business wear, I might have looked like someone off the street who’d come in for the free donuts and coffee.

“You forgot you were making the keynote today,” one colleague joked. But the opposite was true. I’d deliberately broken with convention to shake up my audience. Complacency is never rewarded in business, and if China continues gobbling up the rights to the world’s innovation, working clothes will be just what’s needed, with the shirt sleeves rolled up for action!

 

SIMMELVUO-Markku-01

Markku Simmelvuo 
Managing Director of Papula-Nevinpat
European Patent Attorney

First publication of this blog was on the web page of the Federation of Finnish Enterprises on 15 June 2016 (in Finnish)

(Photos: Papula-Nevinpat)