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China: the end of Patent Subsidies

February 25, 2021

On Jan. 13, 2021, USPTO published a new report that discusses the influence from the high rate of Chinese patent and trademark filings, which are from the Chinese government subsidies and other non-market factors.  The volume of trademark and patent applications filed in China has outpaced that of global competitors in the pastas years. In China, however, non-market factors, including subsidies, government mandates, bad-faith trademark applications, and resulting countermeasures, substantially contribute to trademark and patent application activities. Absent consideration of the role of non-market factors, cross-border comparisons based on the raw number of trademark and patent applications risk overstating brand creation and innovation activity in China. These non-market factors are also undermining domestic and foreign registries, stretching the capacity of China’s patent and trademark examiners and review authorities, and narrowing the scope of available protection for legitimate rights holders, according to the USPTO.

Coincidentally, on January 27th 2021, China National Intellectual Property Administration issues a notice “on further Strictly Regulating Patent Application Behavior” (国家知识产权局关于进一步严格规范专利申请行为的通知). The notice announced the end of all patent subsidies by 2025.

  • Subsidies for patent application filings and other stages of the patent prosecution process (e.g., requesting exam) will end by June 30, 2021.
  • Only subsidies for granting of patents (including foreign patents) are allowed for now but local governments must cancel them by 2025. 
    • Subsidies for patent application filings and other stages of the patent prosecution process (e.g., requesting exam) will end by June 30, 2021.
    • Only subsidies for granting of patents (including foreign patents) are allowed for now but local governments must cancel them by 2025.

This Notice is entered into force on the same day and it aimed at moving China from a country dependent on “imported” patents to a country with great autochthon creativity. At the meantime, it helps to reduce or eliminate fraudulent and low-quality patent applications.