China: Defensive Publishing could be just what Chinese companies need
It appears that China is facing a huge obstacle on matters of intellectual property, namely patents. More specifically, China is way behind in the patent race; not only worldwide, but even at home. If you just looked at a snapshot today, it’s hard to see why. Consider this:
- China has the largest population in the world.
- The Chinese educational system is heavily oriented toward science-based technical training.
- China graduates in excess of three times more engineers - electrical, industrial, bio-chemical, semiconductor, mechanical, even power generation - with bachelor's degrees than the U.S. university system.
- China consistently has graduated more engineers than the U.S., Japan, and Germany combined every year since 1997
- In terms of the size of their economy, China is on pace to overtake Germany in the next four years, Japan by 2015 and the U.S. by 2039
Yet, while the rate of patenting is increasing in China, on a worldwide bases, China is still way, way behind the US, Japan, Germany, France, the UK, South Korea, Italy, and Canada. China is actually patenting at an annual rate of less than 5% of the US. In fact, many individual Japanese and US companies themselves patent more than the entire nation of China on an annual basis. Worse yet, many of the above mentioned countries are exceeding Chinese patents in their own backyard; the Chinese Patent Office.
This is a seemingly impossible position for China. Every day China gets farther and farther behind in the patent race, and deeper and deeper into the hole of being a labor based nation rather than an intellectual property based nation.
However if history holds true, and China follows the teachings of its great strategy masters, China will find a path of low resistance whereby it can negate those patent positions.
For starters, China may turn the idea of what a patent is around and show that the patent is a tool for use by the weak, not the strong. For companies in more fully developed nations, patents are a necessary part of their IP strategy since their cost of invention is so high. The company that invests millions of dollars to create an inventive product must generate millions of dollars in sales just to break-even. If that inventive product is easy to copy, patents might be the only way to keep copiers out; copiers that of course did not have to invest millions in R&D to produce the inventive products. A copier is at break-even from the beginning. So, in a world without patents, who would prevail? The companies or countries with the greatest capabilities to conduct R&D and ultimately build products inexpensively. Companies or countries that wouldn’t be as financially devastated by copy-cats. Since China has low labor costs coupled with a highly educated labor pool, its companies c an invent and build more cost efficiently than companies from almost any other nation. The only thing keeping them from doing that is patents. This means that it is in China’s best interest not to compete in the patent race, but to stop the patent race.
China can do this with defensive publications. With an army of engineers graduating from its universities at home and abroad, China has the means to disrupt the patent fortresses of patent savvy companies. Its engineers can develop and defensively publish innovation for a small fraction of the cost of patenting and stop the patent race dead in its tracks…or at least slow it down a little.
