States solves competition and innovation better than the plan – China proves – and only the CP reverses the destruction of cooperative federalism through the current patent system

This Article compares the patent legislative power allocation models in China and the U.S. In terms of evolutionary paths, the U.S. transitioned from a decentralized model where patent legislative power resided with the states, to a centralized model which consolidated this power at the federal level. Within the realm of patent legislation, there is no collaboration between the federal and state governments. Conversely, China moved from a centralized model, where patent legislative power was concentrated in the central government, to a semi-decentralized model, with coexistence between the patent legislative power of the central and local governments.

This Article posits that China's semi-decentralized patent legislation model manifests key elements of cooperative federalism, embodying power sharing between central and local governments as they collaboratively address issues related to innovation. However, the nature of the cooperation between China's central and local governments is distinctive. Unlike the U.S. federal system, where states enjoy significant autonomy, China's central government assumes a dominant role, a consequence of its unitary state structure. Local governments supplement the central government's constructed system by further developing it, tailoring it to local conditions under the central government's guidance and supervision.

Compared to the current centralized patent legislation model in the U.S., this Article suggests that the intricate structure of a semi-decentralized patent legislation model might be better equipped to cater to the diverse needs of local industries and inventor communities, and to spur local competition and institutional innovation. It can do this while complying with international treaty requirements, given that national patent laws maintain a level of protection no lower than these treaties necessitate and that local patent laws do not decrease the protection level of the national laws. However, the model also faces challenges regarding potential inconsistency, rent-seeking behaviors, and local protectionism.

[*304] The examination of this semi-decentralized patent legislation model opens new avenues for understanding legislative diversity, stimulating further scholarly discourse. Beyond introducing a novel case study in intellectual property law within a particular national context, it also offers fresh perspectives on the institutional designs of federal and unitary governments in addressing innovation issues.