Your browser does not support the PubReader view.
Go to this page to see a list of supporting browsers.
Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 26, No. 1, pp.33-72
ISSN: 1225-0279 (Print)
Print publication date 28 Feb 2013
Received 15 Sep 2012 Revised 28 Dec 2012 Accepted 04 Jan 2013

Quality and Value of Chinese Patenting: An International Perspective

Grid Thoma
Assistant Professor with Tenure, School of Sciences and Technology, Computer Science Division, University of Camerino, Via del Bastione, 62032, Camerino (MC), Italy, Tel: +39-0737-40-25-74, Fax: +39-0737-40-21-27 grid.thoma@unicam.it

JEL Classification: O31, O34

Abstract

This paper presents a novel analysis of the international dimension of the rapid growth of Chinese patenting and advances an econometric model to scrutinize the determinants of patent granting, prior-art searches, opposition to patents granted, and patent renewal decisions. Our results provide support for the “strategic patenting” hypothesis on the lower value and quality of Chinese patents compared to other patents on average, though a few caveats are in order. On the one hand, I find that the probability of grant for foreign multinational firms is negative although their patents are relative strong regarding the prior art. The low value effect on opposition and renewal decision is moderate. On the other hand, for Chinese indigenous patenting, I do not find ample evidence that there is lower probability of grant, but I do find support that these patents lack adequate prior art research, receive more oppositions, and have shorter renewal life cycle compared to other Chinese patents and other patents on average. The size and experience of the patent owner positively mediate these effects. Hence, the findings are consistent with the assumption that large and younger patenters concentrated in a few industries are responsible for the bulk of strategic patenting.

Keywords:

Patent value, Quality, China, International patent filings, Firm level analysis

Acknowledgments

I am grateful to Dominique Guellec and Jacques Mairesse for discussing this project with me and for their encouragement. The paper has also benefited from comments by Giulia Ajmone Marsan, Lee Branstetter, Stuart Graham, Bronwyn H. Hall, Pierre Mohnen, Mark Schankerman, Luc Soete, Brian Wright, and all the participants at the EPIP Workshop Meeting in Maastricht (December, 2010), the EPIP Annual Conference in Leuven (September, 2012), and the Third Asian Pacific Innovation Network Annual Conference in Seoul (October, 2012). All errors are mine. I would also like to thank Sheila Beatty for editorial assistance of the manuscript.

References

  • Amighini, A., Rabellotti, R., and Sanfilippo, M. “Outward FDI from Developing Country MNEs as a Channel for Technological Catch-up.” Seoul Journal of Economics 23 (No. 2 2010): 239-61. [https://doi.org/10.2139/ssrn.1603569]
  • Arora, A., Ceccagnoli, M., and Cohen, W. “R&D and the Patent Premium.” International Journal of Industrial Organization 26 (No. 5 2008): 1153-79. [https://doi.org/10.1016/j.ijindorg.2007.11.004]
  • Bessen, J. “The Value of U.S. Patents by Owner and Patent Characteristics.” Research Policy 37 (No. 5 2008): 932-45. [https://doi.org/10.1016/j.respol.2008.02.005]
  • China IP. Who Is Making Junk Patents? China Intellectual Property, by Jody Lu, Appeared on March 6th, 2011.
  • Crescenzi, R. A., Rodríguez-Pose, A., and Storper, M. The Territorial Dynamics of Innovation in China and India. IMDEA Working Papers Series 2012/09, 2012.
  • Eberhardt, M., Helmers, C., and Yu, Z. Is the Dragon Learning to Fly? An Analysis of the Chinese Patent Explosion. University of Oxford, CSAE Working Paper 2011/15, 2011. [https://doi.org/10.2139/ssrn.1965963]
  • Eun, J.-H., Lee, K., and Wu, G. “Explaining the ‘University-run Enterprises’ in China: A Theoretical Framework for University-industry Relationship in Developing Countries and Its Application to China.” Research Policy 35 (No. 9 2006): 1329-46. [https://doi.org/10.1016/j.respol.2006.05.008]
  • Fraser. The Fraser Institute ― Measuring Global Patent Protection. The Economic Freedom Network, http://oldfraser.lexi.net/publications/forum/1999/03/patent_protection.html, 1999.
  • Gambardella, A., Harhoff, D., and Verspagen, B. “The Value of European Patents.” European Management Review 5 (No. 2 2008): 69-84. [https://doi.org/10.1057/emr.2008.10]
  • Ginarte, J. C., and Park, W. G. “Determinants of Patent Rights: A Cross-national Study.” Research Policy 26 (No. 3 1997): 283-301. [https://doi.org/10.1016/S0048-7333(97)00022-X]
  • Goldberg, I., Branstetter, L., Goddard, J. G., and Kuriakos, S. Globalization and Technology Absorption in Europe and Central Asia: The Role of Trade, FDI, and Cross-border Knowledge Flows. World Bank Working Paper No. 150, 2008. [https://doi.org/10.1596/978-0-8213-7583-9]
  • Graham, S. J. H., and Harhoff, D. Can Post-Grant Reviews Improve Patent System Design? A Twin Study of US and European Patents. CEPR Discussion Papers No. 5680, 2006.
  • Grupp, H. “The Measurement of Technical Performance of Innovations by Technometrics and Its Impact on Established Technology Indicators.” Research Policy 23 (No. 2 1994): 175-93. [https://doi.org/10.1016/0048-7333(94)90052-3]
  • Guellec, D., and Van Pottelsberghe de la Potterie, B. “Applications, Grants, and the Value of Patent.” Economic Letters 69 (No. 1 2000): 109-14. [https://doi.org/10.1016/S0165-1765(00)00265-2]
  • Fleming, L. “Perfecting Cross-Pollination.” Harvard Business Review 82 (September 2004): 22-4.
  • Hall, B. H. “Exploring the Patent Explosion.” Journal of Technology Transfer 30 (No. 1 2005): 35-48. [https://doi.org/10.1007/s10961-004-4356-9]
  • Hall, B. H., and Lerner, J. “The Financing of R&D and Innovation.” B. H. Hall and N. Rosenberg (eds.), Handbook of the Economics of Innovation. Vol. 1, Amsterdam: Elsevier, pp. 609-639, April 2010. [https://doi.org/10.1016/S0169-7218(10)01014-2]
  • Hall, B. H., Thoma, G., and Torrisi, S. The Market Value of Patents and R&D: Evidence from European Firms. NBER Working Paper No. 13426, 2007. [https://doi.org/10.3386/w13426]
  • Hall, B. H., Thoma, G., and Torrisi, S. “Financial Patenting in Europe.” European Management Review 6 (No. 1 2009): 45-63. [https://doi.org/10.1057/emr.2009.3]
  • Hall, B. H., and Ziedonis, R. “The Patent Paradox Revisited: an Empirical Study of Patenting in the U.S. Semiconductor Industry, 1979-1995” The Rand Journal of Economics 32 (No. 1 2001): 101-28. [https://doi.org/10.2307/2696400]
  • Harhoff, D., Scherer, F. M., and Vopel, K. “Citations, Family Size, Opposition, and the Value of Patent Rights.” Research Policy 32 (No. 8 2003): 1343-63. [https://doi.org/10.1016/S0048-7333(02)00124-5]
  • Harhoff, D., and Reitzig, M. “Determinants of Oppositions against EPO Patent Grants: The Case of Biotechnology and Pharmaceuticals.” International Journal of Industrial Organization 22 (No. 4 2004): 443-80. [https://doi.org/10.1016/j.ijindorg.2004.01.001]
  • Harhoff, D., and Thoma, G. Inventor Location and the Globalization of R&D. Paper Presented at the Conference on Patent Statistics on Decision Makers, Vienna, Austria, November 17-18th, 2010.
  • Harhoff, D., and Wagner, S. “Modelling the Duration of Patent Examination at the European Patent Office.” Management Science 55 (No. 12 2009): 1969-84. [https://doi.org/10.1287/mnsc.1090.1069]
  • Henderson, R., Jaffe, A., and Trajtenberg, M. “Universities as a Source of Commercial Technology: A Detailed Analysis of University Patenting 1965-1988.” Review of Economics and Statistics 80 (No. 1 1998): 119-27. [https://doi.org/10.1162/003465398557221]
  • Hicks, D. M., and Hegde, D. “Highly Innovative Small Firms in the Markets for Technology.” Research Policy 34 (No. 5 2005): 703-16. [https://doi.org/10.1016/j.respol.2005.03.008]
  • Hu, G. A. “Propensity to Patent, Competition and China’s Foreign Patenting Surge.” Research Policy 39 (No. 7 2010): 985-93. [https://doi.org/10.1016/j.respol.2010.04.006]
  • Hu, G. A., and Jefferson, G. “A Great Wall of Patents: What Is Behind China’s Recent Patent Explosion?” Journal of Development Economics 90 (No. 1 2009): 57-68. [https://doi.org/10.1016/j.jdeveco.2008.11.004]
  • Hu, M. C., and Mathews, J. A. “China’s National Innovative Capacity.” Research Policy 37 (No. 9 2008): 1465-79. [https://doi.org/10.1016/j.respol.2008.07.003]
  • JEGPE. Comparative Study Report on Inventive Step. Published by the Joint Experts Group for Patent Examination between JPO, KIPO, and SIPO, Available at http://www.jpo.go.jp/torikumi/kokusai/kokusai3/pdf/nicyukan_hikakuken/jegpe_comparative_study.pdf, 2010.
  • Lanjouw, J. O., and Schankerman, M. “Patent Quality and Research Productivity: Measuring Innovation with Multiple Indicators.” The Economic Journal 114 (No. 495 2004): 441-65. [https://doi.org/10.1111/j.1468-0297.2004.00216.x]
  • Lerner, J. “The Importance of Patent Scope: An Empirical Analysis.” The Rand Journal of Economics 25 (No. 2 1994): 319-33. [https://doi.org/10.2307/2555833]
  • Liang, Z., and Xue, L. “The Evolution of China’s IPR System and Its Impact on the Patenting Behaviours and Strategies of Multinationals in China.” International Journal of Technology Management 51 (Nos. 2-4 2010): 469-96. [https://doi.org/10.1504/IJTM.2010.033815]
  • Martinez, C. Insight into Different Types of Patent Families. OECD Science, Technology and Industry Working Paper 2010/2, OECD Publishing, Paris, 2010.
  • Meyer, M. “Does Science Push Technology? Patents Citing Scientific Literature.” Research Policy 29 (No. 3 2000): 409-34. [https://doi.org/10.1016/S0048-7333(99)00040-2]
  • OECD. OECD Patent Statistics Manual. OECD, Paris, 2009.
  • OECD. Territorial Reviews: Guangdong, China 2010. OECD, Paris, 2010.
  • Papageorgiadis, N. P., and Cross, A. R. Measuring the Institutional System of Patent Protection and Enforcement: a New Index of 46 Countries. Uppsala University, University of Leeds, Working Paper, 2011.
  • Park, W. G. “International Patent Protection: 1960-2005.” Research Policy 37 (No. 4 2008): 761-66. [https://doi.org/10.1016/j.respol.2008.01.006]
  • PatStat. EPO Worldwide Patent Statistical Database. Available under License from OECD-EPO Task Force on Patent Statistics, April 2012.
  • Putnam, J. The Value of International Patent Rights. Ph. D Thesis, Yale University, 1996.
  • The Economist. Patents, Yes; Ideas, Maybe Chinese Firms Are Filing Lots of Patents. How Many Represent Good Ideas? October 14th, 2010.
  • Thoma G., Torrisi, S., Gambardella, A., Guellec, D., Hall, B. H., and Harhoff, D. Harmonizing and Combining Large Datasets ― An Application to Firm-Level Patent and Accounting Data. NBER Working Paper No. 15851, 2010. [https://doi.org/10.3386/w15851]
  • Van Pottelsberghe, B., and Van Zeebroeck, N. “A Brief History of Space and Time: The Scope-year Index as a Patent Value Indicator Based on Families and Renewals.” Scientometrics 75 (No. 2 2008): 319-38. [https://doi.org/10.1007/s11192-007-1864-z]
  • Von Graevenitz, G. The Impact of Recessions on the Utilization of Intellectual Property. Paper Presented at the OECD Workshop on Trademarks and Trademark Data, OECD, Paris, July 17th, 2009.
  • Wright, B., Cao, S., and Lei, Z. Utility Models vs. Invention Patents: Why File Utility Models for Good Inventions in China? University of Berkeley Working Paper, 2011.
  • Wright B., and Lei, Z. Patenting Subsidy and Patent Filing’s in China. University of Berkeley Working Paper, 2011.