Chinese innovation is driven by government R&D not patents
Charles Duan, 2019 -Technology and Innovation Director at the R Street Institute, where his research focuses on intellectual property issues. “U.S. PATENTS AND COMPETITIVENESS WITH CHINA” R Street, February, https://www.rstreet.org/wp-content/uploads/2019/02/Final-Short-No.-671.pdf //DH
Indeed, there are multiple reasons to believe that patents and patent enforcement are of minimal value and interest in China, such that the patent system is not a substantial driver of growth in the country.
For one thing, Chinese patent applications are low in quality. Chinese law offers three types of patents: "invention" patents akin to standard utility patents for inventions in the United States, "design" patents for ornamental or decorative features on products and "utility model" patents for "technical solutions proposed for the shape and structure of a product."10 The latter two patent types are less rigorously examined and less powerful as enforcement tools." Multiple recent studies show that Chinese patent filings have been predominantly of the design and utility model types, which suggests that the incentives for filing patents are not encouraging serious inventive activity.12
Furthermore, Chinese patents tend not to be retained for long. A Bloomberg study found that 90 percent of design patents in China, and substantial numbers of invention and utility model patents too, are abandoned within the first five years of their enforcement term.13 This again suggests that patents and patent enforcement are not a substantial asset for the Chinese innovation economy.
And finally, patent enforcement damages in China tend to be very low. In fact, a 2018 survey of Chinese patent litigation found that the median damage awarded was under $5,000." It is hard to believe that such a small monetary sum drives high-tech innovation, particularly when compared to billions in government investment. To be sure, China is considering amendments to its patent laws that could theoretically bolster patent enforcement but those amendments are not in effect and likely are not yet affecting the behavior of technology firms.15 As a result, there is little reason to believe that patents and patent enforcement are a serious driver of the technological innovation that China enjoys today.