China Today: Intellectual Property Protection in China: Does it Warrant Worry? - The recent rise in patent application filings reflects new confidence in the future of patent protection - BioPharm

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China Today: Intellectual Property Protection in China: Does it Warrant Worry?
The recent rise in patent application filings reflects new confidence in the future of patent protection


BioPharm International
Volume 20, Issue 5

PRC PATENT LAW BASICS

The 1984 PRC patent law took over five years to draft. The drafters examined the patent laws of the US, Europe, and other countries for reference. In many aspects, the PRC patent law is similar to European patent law. The PRC patent law is a first-to-file system that awards patents to the first applicant to file for patent, which differs from the United States, which is a first-to-invent system.

The 1984 PRC patent law was amended in 1992 to extend patent protection to drugs, which were previously excluded. Many blockbuster pharmaceutical and biotech drugs that were discovered, patented, or publicly disclosed before 1984 were not eligible for patent protection in China. Consequently, companies in China produced generic versions of these blockbuster drugs before generic versions became available outside of China.

In 2000, amendments were adopted that further harmonized China's patent system with other countries in anticipation of China's joining the World Trade Organization. The implementation regulations of the PRC patent law were adopted in 2001 and amended in 2002. The PRC patent law provides that "no patent right shall be granted" for scientific discoveries, rules and methods for mental activities..."

The PRC patent law also provides that creators of work-for-hire inventions should be compensated by their employers. "A state-owned enterprise or an institution" is required by law to pay an inventor no less than RMB2000 yuan ($250) for an invention patent.

RISING PATENT APPLICATIONS


Figure 1
The number of patent applications filed with the patent office by domestic and foreign applicants has risen rapidly in recent years. It took 15 years for China to reach its first one millionth filed patent application. However, it took only four years for China to reach its second millionth filed patent application. The number of patent applications has increased at an annual rate of 20% from 1997 to 2005 (Figure 1). Of the total of 2,761,189 patent applications filed from 1985 to 2005, 81.8% were filed by Chinese applicants and 18.2% by foreign applicants. In 2005, the number of patent applications by Chinese applicants increased by 37.4% over 2004. The increase in patent filings by Chinese applicants reflects a recent trend in IP awareness and focus by Chinese companies.


Figure 2
In 2005 alone, 214,003 patents were granted, of which 80% were granted to Chinese applicants and 20% to foreign applicants. On average, the number of patents granted by the patent office increased by about 20% per year between 1997 and 2005 (Figure 2).


Figure 3
In the medicine and pharmaceutical area, the annual percentage increase in patent application filings with the patent office has recently grown by double digits.3 The number of pharmaceutical patent applications filed for Western medicine was 3,263 in 2003, with an average annual growth rate of 27.4%. The recent growth in patent application filings reflects increasing confidence in the current patent system and the prospect of future patent protection and enforcement. It was not long ago that early-stage biotech and pharmaceutical companies would not consider China a country in which to file a patent application. Given the rapid expansion of the Chinese economy and the recent focus on IPR protection and enforcement, filing patent applications in China has become far more important than it was five years ago. China should be considered as a potential country in which to file patent applications for any international patent portfolio (Figure 3).


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