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How China Built the World’s Biggest Patent Office – The Pressure Driving Mechanism

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Abstract

In 2011 China’s patent office received more patent applications than any other patent office in the world. While explanations for this patent surge focus on some relevant factors such as the use of subsidies for application fees, what is missing from the literature is an analysis of how China turns its fragmented levels of government into an efficient system for obtaining compliance with patent targets set by the higher levels of government. Drawing on the governance literature from China we introduce the concept of the pressure driving mechanism and show how this mechanism enables China to reach the goals and targets that it sets for its patent system. We discuss goal and target-setting at the higher levels of government and show how these are then transmitted to lower levels of government. We explain how performance evaluation and peer transparency are used to generate pressure on Chinese officials to comply with patent targets. Provincial-level patent data are presented to show how well compliance works, as well as to demonstrate how the mechanism operates to make the patent system responsive to changes in targets. Through the application of the pressure driving mechanism, China is developing a unique tool of patent regulation.

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Notes

  1. WIPO (2011), p. 43.

  2. WIPO (2012), p. 49.

  3. Drahos (2010), pp. 150–151.

  4. Supra note 1, p. 41.

  5. 13th Five-year Guideline for National Economic and Social Development (2016–2020). http://news.xinhuanet.com/politics/2016lh/2016-03/17/c_1118366322.htm, Chapter 2 (in Chinese).

  6. Source of data: Annual and monthly statistical reports officially published on the State Intellectual Property Office (SIPO) website. http://www.sipo.gov.cn/tjxx/.

  7. Drahos (2010), p. 11.

  8. Jaffe and Lerner (2004).

  9. Pavitt (1985); Griliches (1990); Watanabe et al. (2001).

  10. See Ullrich (2013).

  11. Maskus (2017)

  12. See Li (2010).

  13. Wagner (2009).

  14. Liang (2012).

  15. Li X (2012), Dang and Motohashi (2015).

  16. Prud’homme (2012). See also Prud’homme (2015).

  17. See for instance: Rong (2013), Rong et al. (1997), Yang (2002, 2012). There is a large body of literature on this topic. From 1997 to 2016, 55 journal articles include “pressure driving mechanism” in their titles according to bibliometric information from China Academic Journals Full-text Database. Some literature is critical about the effect of the pressure driving mechanism, but the fact of its existence as a tool of governance in China is not contested.

  18. There are three levels of local government in China, beginning with the provincial level, and moving to the county level and town level in descending order. In some places, there may be a prefectural level between the provincial level and county level.

  19. Lieberthal and Lampton (1992), Mertha (2009).

  20. Roy (1994).

  21. Li C (2012) argues that China’s one-party political system could facilitate the state capacity to regulate effectively via institutional adaptations and policy adjustments.

  22. Ahlers and Schubert (2011).

  23. Lieberthal and Lampton (1992), p. 4.

  24. It previously functioned as a translation house, but gradually changed its role into that of a think tank. See Bing (2015).

  25. Rong et al. (1997).

  26. Rong et al. (1997), p. 28.

  27. Yang (2012), pp. 5–7.

  28. In this paper, governments are frequently mentioned as high-level or low-level only to show their relative position in the regulatory hierarchy. No evaluation of the quality of their governance performance is intended.

  29. For example, targets listed in the five-year plans.

  30. Zhou (2007).

  31. Yang (2002, 2012).

  32. Yang (2012).

  33. Mertha (2005).

  34. An exception to the double leadership format is the case of vertical leadership, in which lower-level governmental agencies are only responsible to higher-level governmental agencies, not local government at the same level. Vertical leadership exists in several regulatory areas, such as customs, tax, industry and commerce, quality supervision, and land resources. See Wang and Wang (2009).

  35. In addition to PIPOs, SIPO has its own branches at the local level which function either as patent acceptance windows or patent cooperation examination centres. Though located outside Beijing they are an integral part of SIPO. These branches should not be confused with PIPOs.

  36. Though the implementation by the county-level governments is also an integral part of the mechanism, the behaviour of the county-level governments is not within the scope of this paper.

  37. SIPO (2011). National Strategic Promotion Plan for Patent Development. http://www.sipo.gov.cn/gk/fzgh/201310/t20131025_860857.html (in Chinese). In this promotion plan, 10 special tasks are introduced; the improvement of patent quality is the first task.

  38. A PIPO is under the leadership of both SIPO and the local government to which it is affiliated.

  39. Yu (2000, 2005); Massey (2006).

  40. SIPO (2006). SIPO Commissioner Address on Giving Full Play to the Patent System. http://www.gov.cn/zwhd/2006-01/09/content_151769_3.htm (in Chinese).

  41. State Council (2008). Outline of the National Intellectual Property Strategy. http://english.sipo.gov.cn/laws/developing/200906/t20090616_465239.html.

  42. In addition to this long-term goal, the National IP Strategy also set mid-term goals – a series of five-year targets to be achieved by 2013.

  43. Para. 19 and para. 51. National IP Strategy. Supra note 41.

  44. State Council (2016). Reply of the State Council Regarding Approval of Establishing the State Council Inter-Ministerial Joint Meeting System for Implementing the Intellectual Property Right Strategy. http://en.pkulaw.cn/display.aspx?cgid=267491&lib=law (in English). http://www.gov.cn/zhengce/content/2016-03/30/content_5059662.htm (in Chinese).

  45. Inter-Ministerial Joint Meeting (2011–2014). Promotion Plan for the Implementation of the National Intellectual Property Strategy. http://english.sipo.gov.cn/laws/developing/. These promotion plans are available in English. From 2015 onwards, they are only available in Chinese. http://www.nipso.cn/zhuanti/2016tjjh/.

  46. State Council (2014). Notice of the General Office of the State Council Concerning Issuing Further Implementing the National Intellectual Property Strategy Action Plan (2014–2020). http://www.gov.cn/zhengce/content/2015-01/04/content_9375.htm. For an English briefing, see SIPO (2014). China Issues Action Plan to Further Implement the National IP Strategy (2014–2020). http://english.sipo.gov.cn/news/official/201501/t20150114_1061802.html.

  47. Starting from 1953, the First Five-year Plan for National Economic and Social Development of China was formulated following the system of five-year plans in the Soviet Union. Evolving over half a century, in 2006, the 11th Five-year Plan changed its name to Five-year Guideline to reflect a transition of China from a planned economy to the current status of a socialist market economy. The change also applies to the five-year plans thereafter. The present five-year plan in operation is the 13th Five-year Guideline (2016–2020).

  48. SIPO (2001). Tenth Five-year Plan for National Patent Work. http://www.sipo.gov.cn/gk/fzgh/201310/t20131025_860850.html (in Chinese).

  49. Ibid. Para. 3 of Part 2. It also mentions patent targets in other areas, including patent management and enforcement. For the purpose of this paper, only application-related targets are quoted in this extract.

  50. In 2020, the Chinese population will reach 1,450,576,229. This calculation is based on the survey number of the State Statistical Bureau of China that in the year 2010 there was a population of 1,370,536,875 and assumes it will maintain a 10-year increase rate of 5.84%. National Bureau of Statistics of China (2011). Report of Major Statistics of the Sixth National Census of the People’s Republic of China (No. 1). http://www.stats.gov.cn/tjsj/tjgb/rkpcgb/qgrkpcgb/201104/t20110428_30327.html.

  51. This is a statistical concept adopted by the National Bureau of Statistics of China (NBSC), which refers to industrial enterprises whose annual revenues from their main business operations are over 20 million yuan. The NBSC only collects statistics from these companies directly. Statistics from other enterprises are collected by sample surveys or are not collected by the NBSC. This indicator was introduced to reflect the contribution of patents to these enterprises in China.

  52. For instance, the Direct Municipality Chongqing has already issued an implementation plan for Made in China 2025. See Jiang (2016).

  53. Hou and Wu (2016).

  54. This incremental process is illustrated by interviews with governmental officials in SIPO by People.com, one of the most influential mainstream media in China. See Zhao and Wang (2011).

  55. Nonetheless, three pioneer provincial governments (Shanghai, Shandong, and Guizhou) and two prefectural governments (Shenzhen in Guangdong Province and Rizhao in Shandong Province) issued their local IP strategy before the National IP Strategy.

  56. Shen (2014).

  57. The number is different from that mentioned by Shen in his report in 2014 (ibid.). However, Shen did not disclose the source of his data. We used the database Chinalawinfo.com to formulate Table 2. All data in this table are from this database.

  58. For instance, SIPO announced its release of the Annual Compilations of 2016 at http://www.sipo.gov.cn/zscqgz/2016/201604/t20160414_1261700.html (in Chinese). According to the released announcement, “inter-ministerial meetings can supervise the progress of implementation by local government timely against key points specified in the annual compilations”.

  59. The National Patent Capacity Report was first published in 2011. Reports are authorized to be drafted and published by the Development and Research Centre of SIPO on the basis of surveys. Provinces are ranked in various ways. The full-text report of 2013 is available at http://www.sipo.gov.cn/zscqgz/2014/201404/t20140425_939490.html (in Chinese). From 2014, the full text of the report has no longer been publicly available.

  60. SIPO Monthly Statistical Report on Patent Work. http://www.sipo.gov.cn/tjxx/tjyb/ (in Chinese). Annual reports are also available since 1985 at http://www.sipo.gov.cn/tjxx/tjnb/ (in Chinese).

  61. Braithwaite (2006).

  62. SIPO (2014). National Patent Capacity Report of 2013. http://www.sipo.gov.cn/zscqgz/2014/201404/P020140429345620110367.pdf, pp. 78–79 (in Chinese). There are 31 provincial-level governments and 334 prefectural-level governments in China.

  63. Zhou (2007).

  64. Zhao (2014).

  65. Jiangsu PIPO (2013). IP Protection and Development Situations in Jiangsu Province (2012). http://www.jsip.gov.cn/zwgk/bgzj/bps/201305/W020160401623395125715.pdf, p. 4.

  66. Data sources: Annual Statistical Report of SIPO (2000–2015). See supra note 60. Data for 2016 are from the Annual IP Report of Jiangsu PIPO. http://www.jsip.gov.cn/zwgk/bgzj/zscqnb/201705/P020170518551135627527.pdf (in Chinese)

  67. Anhui PIPO (2011). Provincial Patent Statistical Report for 2010. http://www.ahzwgk.gov.cn/xxgkweb/blue/showNBconent.jsp?xxnr_id=165&unit=485004551 (in Chinese).

  68. Data source: Annual Statistical Report of SIPO (2000–2015). See supra note 60. Data for 2016 are from the Anhui PIPO portal. Ibid

  69. Anhui PIPO (2010).

  70. The portal for these statistical reports is the Anhui PIPO website. http://ah.sipo.gov.cn/sm2111111232.asp (in Chinese).

  71. Data source: Annual Statistical Report of SIPO (2000–2015). See supra note 60. Data for 2016 are from the Hebei PIPO website. http://www.hebipo.gov.cn/E_ReadNew.aspx?E_typeid=3&NewsID=3435

  72. The website is maintained by the Hebei Patent Information Service Centre, which is affiliated to Hebei PIPO.

  73. Patent Ranking in Hebei Province. http://www.hebippd.org.cn/WebPublish/InfoList.aspx?ListType=0026&SelectID=A2 (in Chinese).

  74. Data source: Annual Statistical Report of SIPO (2000–2015). See supra note 60. Data for 2016 are from the Guizhou PIPO Annual Report of 2016. http://kjt.gzst.gov.cn/index.php?show-index-cid-56-id-621.html

  75. Guizhou PIPO. Patent Statistics. http://kjt.gzst.gov.cn/index.php?cate-index-cid-56.html (in Chinese).

  76. Data source: Annual Statistical Report of SIPO (2000–2015). See supra note 60. Data for 2016 come from the Yunnan PIPO statistical report of 2016. http://www.ynipo.gov.cn/newsview.aspx?id=6019

  77. Ye (2006), Wu (2005).

  78. Prud’homme (2015), Prud’homme (2012), Liang (2012).

  79. SIPO (2013). Development of China’s Utility Model Patent System. http://english.sipo.gov.cn/news/official/201301/t20130105_782325.html.

  80. It is worth noting that from January 2017 the statistics for the breakdown of applications and grants of the three types of patents for each province are no longer published at the SIPO statistical portal. Instead there are data on applications by different types of applicants (enterprises, research institutions, universities, individuals and public organizations) and the number of service inventions and non-service inventions.

  81. SIPO (2013).

  82. The last two indicators are negatively related to patent quality because some enterprises did not pay patent application fees after obtaining subsidies for applications, or did not maintain the patent after securing the subsidies.

  83. SIPO (2007).

  84. Data source: Annual Statistical Report of SIPO (2000–2015). Data for 2016 come from the Monthly Report of December 2016

  85. Data source: see supra note 66

  86. Data source: see supra note 70

  87. Data source: see supra note 73

  88. Data source: see supra note 75

  89. Data source: see supra note 76

  90. WIPO (2017).

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Acknowledgements

We thank Dan Prud’homme, Meredith Edelman, Therese Pearce Laanela and Kate Ogg for their invaluable comments on an early draft of this article.

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  1. Professor of Law and Governance, Law Department, European University Institute, Florence, Italy

    Peter Drahos

  2. Doctoral Candidate, School of Regulation and Global Governance, Australian National University, Canberra, Australia

    Wenting Cheng

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Cheng, W., Drahos, P. How China Built the World’s Biggest Patent Office – The Pressure Driving Mechanism. IIC 49, 5–40 (2018). https://doi.org/10.1007/s40319-017-0655-1

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