(News Focus) China aiming to become patent powerhouse

By Kim Young-gyo
HONG KONG, Sept. 15 (Yonhap) -- China, the world's second-largest economy, is
pushing to become a global patent powerhouse by investing more in research and
development under a state plan to nurture the sector as a future growth engine.
Top Chinese officials, including Premier Wen Jiabao, have emphasized that China
will shift its economic policy to promote sustainable growth by focusing more on
"created in China" products rather than "made in China" goods.
"We will upgrade the traditional industries with advanced technologies and
nurture a number of internationally competitive enterprises with their own
intellectual property and well-known brands," Wen said at an international
economic forum hosted by the Geneva-based World Economic Forum (WEF) this week at
the northeastern Chinese city of Tianjin.
Wen said the Chinese government will develop new pillar industries in the country
and provide stronger policy support so that it can "spur economic development
through innovation."
Under the national policy of Indigenous Innovation, or what the Chinese call
"zizhu chuangxin," China aims to expand its spending on research and development
to 2.5 percent of the gross domestic product (GDP) by 2020 from 1.3 percent in
2005.
Despite the global economic crisis, the State Intellectual Property Office,
China's patent office, has become one of the few government offices in China to
win a budget increase.
The office's annual budget jumped 15 percent last year, twice as high as the
average of 7 percent seen in other government departments.
Reflecting Beijing's emphasis on patents, the country has seen a jump in
applicants seeking to protect their own technologies and other intellectual
property rights.
A total of some 976,000 applications for new patents were submitted to the office
last year, with a daily average of 2,700, rising 17.7 percent from the previous
year. The number of patent applications filed by Chinese companies overseas
doubled in 2009 to 8,000 from 2007, according to government statistics.
The rising interest in patents across China is driven by the Beijing government
itself, experts said.
"The Chinese government continued promoting corporate research and development by
building technology clusters nationwide last year, though the world economy was
shrinking," said Wang Zhengyang, the head-lawyer at Beijing-based law firm
JunZeJun. "The government even helped private companies pay expenses for filing
patent applications."
Amid China's push for patent rights, Chinese companies are aggressively coping
with alleged violations of their patents by multinationals.
Fangda Group, headquartered in the southern city of Shenzhen, recently filed a
lawsuit against a Chinese subsidiary of Japan's Panasonic Group, claiming the
latter stole its core technology of a metro barrier door and obtained illicit
gains.
France's Schneider Electric Ltd., one of the world's top 500 enterprises, last
year reached an agreement to pay 157 million yuan (US$23 million) in
compensation, so far the highest amount for a patent infringement case in China,
after being sued by Zhenjiang Chint Group Corp., which has domestic low-voltage
electrical appliances leading enterprises.
Samsung Electronics Co., the world's second-largest handset maker, is reportedly
in the process of appealing a Chinese court ruling that it has violated a patent
owned by Hangzhou-based Holley Communications.
Experts urge South Korean companies to step up efforts to keep close tabs on
patent-related issues in China and prevent legal disputes before they take place.

"As the Chinese companies have started to develop advanced technologies on their
own, South Korean companies need to pay more attention on what is going on in the
Chinese market," said Yu Byung-deok, an official at South Korea's Intellectual
Property Office. "At times, there can be an overlap between technologies
developed in South Korea and China."
ygkim@yna.co.kr
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