As a follow-up to a previous post regarding China’s surge in patent applications, it is worth noting several important aspects of the Chinese patent system. The first is that most patent applications in China are not based on substantive examination. Instead, the applications are simply approved if the application is correctly filled out. Essentially, most of the patents issued are “registered” rather than examined. Secondly, the filing costs for domestic companies are subsidized by the Chinese government, making it rather cheap to file in China. Third, companies which own a certain number of patents are classified as “high tech” companies which are subject to lower taxation, providing a powerful incentive for filing patents. As a result of the forgoing, at the present time, Chinese patents are oftenn of low quality.

An excellent blog post on this subject can be found here in the Intellectual Asset Management blog.