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From Pirates Paradise to Protecting Patents

January 7, 2011

In a bid to improve the domestic quality of goods and alter China’s image as the capital of cheap, fake goods at knock off prices, Beijing is conducting a major overhaul of its quality and Intellectual Property laws. While in September last year, Beijing decided to blacklist poor quality ‘Made in China’ industries, it is now targeting an astounding 2 million domestic patent applications annually by 2015, and aims to be one of the top two patent owning countries by 2020. The patents hunting master plan, titled “National Patent Development Strategy (2011 – 2020)” follows the “Outline of the National Intellectual Property Strategy”, which the Chinese government released in 2008. Following which, in 2009, China released an “Action Plan for Implementing National IP Strategy”. It had 250 specific measures for various governmental departments. Also in 2009, Beijing released another “Action Plan on Intellectual Property Rights Protection” listing 170 steps covering legislation, enforcement, trials, institutional building, publicity, training and education, international exchanges and cooperation, corporate IP protection and services to right holders.

Also to protect the massive R&D and innovation that the country is working towards, by 2020, China aims to quadruple both patent applications in foreign countries and domestic patent applications for every one million people. The annual patents transaction financial target is to reach 100 billion yuan (US$15 billion) by 2015. In order to implement a project on such a massive scale, Beijing plans to offer incentives of cash rewards, houses and tax breaks to scientists and innovators in addition it will also make the process of filing for patents easier – the patent master plan promises infrastructure for quicker filing, examining and granting of patents, funding patent holders, and integrating new patents into the economy.

However, India will be keeping a close eye on how China implements its Patent policies for foreign and domestic firms. China’s south Asian neighbor has been burnt twice due to China’s patent piracy.

In 2010, India foiled a bio-piracy attempt by Chinese pharmaceutical giant Livzon. Livzon was trying to patent “pudina”, or the commonly available mint plant, and “kalamegha” (andrographis), as treatment for bird flu or H5N1 avian influenza.

India’s Traditional Knowledge Digital Library and the Council of Scientific and Industrial Research stepped in to prove that “pudina” and “kalamegha” have been widely used in India for millennia for treating influenza, epidemic fevers and other ailments. The European Patent Office cancelled its patent to Livzon last June 10.

Nonetheless, while growing rapidly in registering patents in foreign countries, China still has considerable catching up to do with US and Japan, the two largest patent-owning nations. The US Patent Office says that out of 167,349 patents for inventions granted in 2009, China owns 1,655 compared with 82,382 US-origin patents and Japan’s 35,501.

Out of the total patents the US government issued to foreign nationals and entities from January to December 2009 – for utility, design, plant and re-issue patents – China bagged 2,270, compared with Japan’s 38,066, Germany’s 10,353, South Korea’s 9,566, Taiwan’s 7,781 and India’s 720. Even so, China had more than quadrupled its patent count, from 402 patents registered with the US Patent Office in 2005.

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