Monday, 7 January 2013

Junk -- or a valuable asset? Time to re-evaluate secondary protection

Junk ... in the best
sense of the word
Writing for Business Insider, Beijing-based IP/IT Professor Stan Abrams ("The Economist Pops the China Patent Bubble") has some strong words to say about a phenomenon that has alternately fascinated many Western IP commentators and held them in thrall: the vast quantity of patents generated by China. After discussing the proposition, articulated by the Economist, that many Chinese patents are "iffy", he observes:
"... The reason why many granted patents are “iffy” stems from the fact that they do not undergo substantive review during the application process. This is true for two types of patents, utility models and industrial designs, but not for invention patents. “Substantive review” includes a check for prior art, necessary to determine whether a patent is indeed novel, which is one of the basic requirements set forth in the Patent Law.

Therefore a design or utility model patent application simply does not have to go through the same procedure than is the case for an invention patent; this is what the law stipulates and is wholly unrelated to the specific actions of individual patent examiners. The result is a whole lot of patents out there that may be fundamentally weak and subject to an invalidation challenge by a third party. These are commonly referred to as “junk patents.” However, this has nothing to do with whether the applicant was foreign or domestic, and it is incorrect to suggest that the Patent Office is somehow engaging in preferential treatment. This is the way it’s supposed to work, folks.

I’ll give the Economist a B+ on this one.... They got the numbers right and are correct in being at least somewhat skeptical about the boom in patent filings. However, China should be given some props for the positive trends, and the problems with junk patents are built-in to the system and not evidence of a conspiracy between patent examiners and the folks in charge of China’s innovation strategy.
This blogger has been in IP since 1973 and he has never heard utility models or industrial designs described as "junk".  They are an effective means by which businesses, particularly small and insecure ones, can procure protection at a reasonable cost and that is why secondary protection for innovations through devices other than carefully and expensively examined patents has proved so popular in Germany, South Korea, Japan and a surprisingly large number of countries for which WIPO keeps annual statistics.

For those who are both interested and open-minded, there's a free seminar on secondary protection in London on 22 January.  Details are available here.  Surprisingly, given the cost, strategic significance of such protection within a marketing plan and attractiveness to the SME sector, the buoyant registration figures for this event contain few from the financial sector and no-one at all from government.

1 comment:

Joff Wild, IAM said...

China overtook the US for total patent applications quite a few years back, but last year was the first in which it received more applications for invention patents, the ones which do undergo substantive examination. But you're right, foreigners dismissing Chinese utility model and design patents as junk are very ill-advised: