The tasks of Tian

You could argue that each of the last 30 years has been a big year for IP in China, such has been the speed of the country's economic development. The country only established a patent office in 1980, shortly after Deng Xiaoping opened up its economy. Tian joined what was then known as the Chinese Patent Office in 1981 and has witnessed the spectacular increase in patent filings first hand.

The State Council, the country's chief administrative authority, appointed Tian SIPO Commissioner in 2005. At that time the country was in the middle of an unprecedented growth in patent applications, with 1 million filings made in the 18 months from the end of 2006 to the beginning of 2008. When the Office began accepting applications in 1985, it took 15 years for the first million to arrive.

Playing a global role

Zhang Tianan, vice-president of CCPIT Patent and Trademark Law Office, argues that the biggest challenge for SIPO is not just to clear out the backlog of filings, but to raise examination quality to meet the standards of the global IP system. “The borderline between regions and countries is obviously getting more blurred. New proposals allow offices to share examination results, which mean that examination standards such as the authorising criteria and grant conditions of one office would be automatically acknowledged by others. But differences still remain,” he says.

Tian told Managing IP that the rise in filings worldwide means that the IP-5 (SIPO, USPTO, JPO, EPO and KIPO) are “facing a very heavy workload and some challenges, such as large backlogs, and issues relating to human resources, search engines and language issues”. SIPO is taking part in discussions to deal with these problems. Talking about the last meeting of the IP-5 last October in Korea, Tian says that officials were able to share examination and quality-control mechanisms and amend rules to increase efficiency. Each office committed to lead two foundation projects. SIPO's role is to work on the common rules for examination practice and quality control and on a common statistical parameter system.

Tian stresses that these meetings were about technical issues, not politics, saying that the co-operation was “purely on a technical and operational level. We are not trying to enforce a new rule internally, but an open forum to tell the world our plans and proposals”.

But patents and politics are difficult to separate and, as a developing country with one of the world's largest patent offices, where China stands on contentious issues such as disclosure of genetic resources, traditional knowledge and access to medicines, matters. As Mark Cohen, former IP attaché at the US Embassy in Beijing, says: “SIPO is not a developed country but it does take decisions that reflect the complexity of China – you have a big patent office in a developing country, a bio-diverse country with medical and public health issues. You really have a very complicated mix of issues.”

At present SIPO is staying focused on the technical issues and is staying clear of the political controversies.

Dancing to the iPod's patent tune

Tian will need to use all his diplomatic qualities to turn the National IP Strategy into reality. The State Council published the Strategy in June last year after three years of negotiation. As Tian said at the roundtable on the Strategy in Hong Kong, China “needs to protect IP but protection is not enough … The core of the outline is to push forward system reform and improve the intellectual property regime”.

At the roundtable, Tian took a close look at the patents filed in China and pointed out the gap in patent quality between China and foreign countries. In 2007, invention patents accounted for 85.7% of all foreign patent applications but only 26.1% of domestic ones. Crucially, though the overall number of domestic applications looks bigger, Chinese applications have a lower acceptance rate than foreign ones.

Even more strikingly, 99% of Chinese companies have never filed a patent and about 60% of companies do not even own a trade mark. When you break down domestic applications the challenge becomes even clearer: only one-third of them are from companies, universities and institutes whereas in developed countries these organisations account for more than 90% of applications. And Chinese companies are not filing patents in the crucial areas: most Chinese patent applications concern Chinese medicine, methods of inputting Chinese characters on computers, food and drink and ceramics; foreign inventions focus on telecommunications, wireless transmission, semiconductors and genetic engineering. “China has the biggest number of design patent and utility model applications, but we have to admit that the quality is relatively low,” says Tian.

He also used the iPod as an example of how Chinese companies are stuck at the bottom of the technology value chain. Referring to a US research paper, Tian stated that for a 30 gigabyte iPod video that retails for US$299, US$114 goes back to Apple because of the intellectual property it owns, while only US$4 stays with the manufacturers. Although China's patent filings are impressive from a statistical point of view, the country is still not playing a role in the formulation of standards or patent pools, and that is a clear source of frustration within the government.

China's 2020 vision

The National IP Strategy is designed to deal with this problem. The first stage of this was the Patent Law amendments that the National People's Congress passed on December 27. They are due to come into effect on October 1 this year. “We now have policies to encourage more investment to improve invention quality,” Tian told Managing IP, emphasising the changes that have been made to raise the quality of design patents: “The amendment requires search reports for design patents. Applicants need to prove that their patent is reliable before they want to enforce it. We have also developed an online search database with pictures for design patents. And patent agents have been advised not to accept low-quality applications and will provide relevant consultation services.”

Tian also defended the utility model patent system, much criticised by foreign patent owners for encouraging businesses to file large volumes of so-called junk patents: “The current examination system conforms well to the situation of China,” says Tian. “The relatively short examination period meets the needs of small and medium-sized companies, especially those manufacturing products that are upgraded very quickly. It will help them get to market more rapidly.”

Tian was quick to assuage the fears of some companies about a few of the changes introduced, such as additional Doha-style provisions allowing China to export medicines to less-developed countries under a compulsory licence. “I would like to tell foreign companies that they don't have to worry about it at all,” he said, pointing out that provisions on compulsory licensing have been in China's laws since 1985 and have yet to be used. “In China we will stipulate for it, but we need to be very cautious and it is mainly aimed at public health issues such as infectious diseases and SARS.”

SIPO's biggest challenge

Making Chinese businesses more aware of intellectual property and improving patent quality go hand-in-hand. To help raise awareness SIPO is now setting up IP Assistance and Protection Centres throughout the country and has so far completed 41 of a planned total of 110. Tian said that SIPO has been contacting research specialists at companies to educate them on how to use the patent system effectively: “We started with coastal cities in eastern and southern China, such as Guangdong Province, where there is more co-operation with foreign clients with the development of an export-oriented economy and the government offers a certain amount of investment and support.”

But these are just the first stages of the Strategy. To execute the rest of the programme, SIPO will need to take on new powers and knock heads together. IP issues involve a number of different branches of government and the lines of authority are not always clear. Thomas Pattloch, IP officer at the EU delegation in Beijing, sees the implementation of the Strategy as SIPO's biggest challenge: “For the first time ever SIPO is not taking only the technical role of examining patents; they have to do a lot of things that go far beyond that.”

At the roundtable, an official from Guangdong presented the province's own IP strategy. SIPO will have to ensure that every other province does the same, and also formulate IP strategies for important industries, such as the railways: “In these areas you are embarking on tasks which carry strong political elements, which may conflict with other tasks you have and you may have to deal with agencies you have never dealt with before and urge them to do things they don't want to do.”

Tian has met every challenge presented to SIPO so far, and observers of the IP system hope that he can rise to those that 2009 will present.

An unabridged version of this article first appeared in Managing IP in February 2009. Managing IP would like to thank the Hong Kong Intellectual Property Department for its help in arranging the interview. Please visit http://www.managingip.com