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The Benefits of Patent Filing in China

Voice: Lucy GE
Project Administrator

Welcome to Linda Liu on air! This is Lucy.
China is one of the largest markets and has the most active consumer groups. As its population of middle-class is increasing and the society is stable, China is attracting more and more foreign investments.
As one of the biggest consumer markets in the world, China has excellent industrial system. In China, the business environment is improving, and the intellectual property is being enforced more properly.  
In recent years, with continuous improvements on judicial environment of China’s intellectual property protection, intellectual property, such as copyright, trademarks, and patents, became the weapon to win the competition and the tool to get privileged position for companies. Here are some benefits of patent filing in China for your reference.
Chinese companies are innovating themselves, and keeping a close eye on foreign patent publications. If the foreigners do not file in China, the Chinese companies would learn about and freely use the technology in China, or even file for China patents by themselves.
From the prosecution perspective, CNIPA is becoming one of the friendliest offices for software applications. The Examination Guidelines of CNIPA is being revised to lower the eligibility bar for software patent applications, including those in business context and medical device context, to accept “computer program product” as a new type of claim, and to consider positively the software inventions targeting user experience when evaluating the inventive step. According to the CNIPA, in the 1st half of 2021, the number of allowed patent applications filed by foreign applicants has a 30% year-on-year growth.
From the enforcement perspective, the latest Patent Law revision includes punitive damages in 3 to 5 times; and most updates in law enforcement are pro-patentee.
International companies have taken China as an important venue in global competition, e.g., suing non-Chinese and Chinese competitors in Chinese courts. According to the IP tribunal of the Supreme Court of China, the lawsuits they received from foreign entities in 2020 had increased to 116% as compared to the year 2019.
In the transaction market, portfolios without a Chinese counterpart are considered less valuable. Taking the case of UnifiedPatents just as a side example, as an effort to breakdown certain patent portfolios, such as important SEP portfolios, they have started regular patent invalidation actions since last year..
If you set a subsidiary in China with a certain number of patents, after meeting the requirements of the relevant policy, the Chinese subsidiary can be identified as high-tech enterprises and enjoy the 10% reduction of enterprise income tax in China.
That’s all for today’s topic. Hope you find it helpful. If you have any questions, please feel free to contact us.

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