How does the patent war between the US and China play out?
(Baonghean.vn) - The world is witnessing a new war between the two economic powers, the US and China. However, instead of weapons and bombs, this war is taking place on the intellectual and innovation front, specifically through the patent war.
China to surpass US in international patent applications in 2023
Chinese inventors led the way in international patent applications for the second consecutive year, with about 14,000 more applications than the second-ranked US, according to 2023 data from the United Nations.
This comes as the two superpowers increasingly compete over technology, innovation and international standing. Earlier this month, Chinese Premier Li Qingqiang announced a 10% increase in government spending on science and technology research, while the US Congress is still debating the budget for science and technology research.
China has long been criticized for focusing on the quantity of patents rather than the quality of them, and for over-subsidizing applicants. So the country has recently begun weeding out poor research and substandard applications.
Mr. Robert Atkinson - President of the Information Technology and Innovation Foundation (ITIF) based in the US and also a member of President Biden's economic advisory team said: "China's patent filing reflects its potential technological capabilities. Therefore, from now until the end of this decade, if we do not respond comprehensively and seriously, everything will be too late."
However, some analysts say China's weakening economy and rapidly aging population will hamper its innovation trajectory, shifting momentum back to the United States.
According to data released in March by the World Intellectual Property Organization (Wipo), China filed 69,610 patent applications under the United Nations Patent Cooperation Treaty in 2023, compared with 55,678 by the United States. The 1970 treaty allows inventors to file an international patent in several countries at the same time, avoiding the cost of filing in multiple jurisdictions.
US to Surpass China in 2023 National Innovation Index
Meanwhile, assessing the progress of the two superpowers in the battle for technological dominance is also controversial as determining the cause and effect relationship between patent filings and commercial products, industries and economic activities is not simple.
“I don’t think we have the final answer in measuring innovation, it’s always been more of an art than a science,” said Carsten Fink, chief economist at Wipo, which oversees the UN agency’s Global Innovation Index.
Wipo's 2023 index, which combines 80 factors, ranked Switzerland as the world's most innovative country, followed by Sweden and the United States. China ranked 12th out of 132 economies surveyed, but topped the list of upper-middle-income countries, followed by Malaysia and Bulgaria.
How do other metrics perform?
Other measures also yielded different results. The U.S. Chamber of Commerce’s Intellectual Property Index, which uses 50 criteria including patents, commercialization and efficiency, ranked the United States first and China 24th out of 55 economies.
Meanwhile, the Bloomberg Innovation Index ranked the US 6th and China 22nd out of 50 countries based on six criteria, including spending on research and development, manufacturing, research and patents.
ITIF's Hamilton Index shows that China leads in seven out of 10 strategically important industries, including computers, electronics and chemicals, while the US leads in three: information technology, pharmaceuticals and transportation.
In 2023, Qualcomm and Microsoft were the top US companies filing international patents, while Huawei Technologies and battery maker CATL led the Chinese side.
Every country encourages patent filing, but analysts say China has taken it to a new level. In its desperate bid to innovate and achieve global rankings and standards under its “Made in China 2025” roadmap, Chinese applicants can enjoy subsidies that exceed the cost of filing, an incentive to file multiple patents for the same invention in order to gain income, prestige, and academic advancement.
The Western patent system generally places more emphasis on proving an invention is globally unique, compared to China's more domestically focused and lax standards, experts say.
Beijing is also working to crack down on plagiarism in academic papers and sharply reduce the number of poorly reviewed patents by 2023, while increasing the proportion of patents that are thoroughly examined, according to a report by the State Council.
Since its first patent was filed in 1985, China has often been criticized abroad for lacking innovation, not publishing enough scientific papers, and...
The US remains the leading country in spending on research and development.
According to the Organization for Economic Cooperation and Development (OECD), the US remains the leading country in total spending on research and development (R&D), with $806 billion annually, compared to China's $668 billion.
And while China was predicted to surpass the US in total R&D spending, that has yet to happen, amid massive demographic challenges, a real estate crisis, rising domestic debt and slowing economic growth.
The US economy, on the other hand, has shown surprising resilience, with low unemployment and some $200 billion in new investment in R&D through the Science and Chips Act of 2022.
Deep political divisions and budget battles in Washington have hurt government R&D, which fuels private-sector innovation, with the US National Science Foundation's budget, for example, falling 8.3% this year.
Experts say China’s management system makes it easier to create and execute national campaigns. Many of China’s top leaders have engineering degrees, while the United States seems to have lost its sense of “national mission” since the end of the Cold War.
“The United States has many actions that shoot itself in the foot. We cannot blame everything on China,” said Mark Cohen, director of the Asia Intellectual Property Project at the University of California, Los Angeles.
China’s growing patent prowess has failed to awaken the U.S. tech community in part because of the country’s inherent divisions, said an intellectual property lawyer who asked not to be named because of the sensitivity of U.S.-China relations.
Patents are important for large hardware companies, protecting against copying of physical designs. But they are less useful for startups struggling to survive. Software companies often view patents as an imperfect but acceptable tool because they are largely ineffective at protecting their secrets, including business models, data quantity and quality, and trade secrets.
This is why, although China filed 2.5 times more patents on artificial intelligence (AI) technology than the US in 2018, this does not mean that the US is falling behind in the field of AI innovation.
