Analysis On The Patent Application Motivation In China Of Foreign Applicants

Being a member of WTO for more than ten years, China’s economic and literacy levels ascends rapidly. Import and export trade thrives and China absorbs more and more investment for foreign enterprises. However, due to deepening economic communication with foreign countries, China is confronted with more and more challenges and obstacles on the world stage, especially in the era of knowledge economy when every country is advocating intellectual property protection. The deficiency of intellectual property institutions and weakness of technological innovative ability makes China suffer from many restrictions such as patent blockage and infringement proceedings when doing business with transnational corporations.This paper elaborates the background and significance of the subject research based on the determinant of patent application motivation in China of foreign corporations. This paper also analyzes the overseas and domestic research status, laying a foundation of the theoretic and empirical analyses on the patent application motivation in China of foreign applicants. The theoretic analysis part of the paper finds that during 1985 and 1993, the trend of patent applications in China from foreign corporations kept relatively steady. Later it grew drastically. By analyzing the current situation of patent applications in China from foreign corporations I find that from 1985 to the end of 2014, the amount of top ten foreign countries who applies for patent accounts for 92.5% of that applied by all foreign countries. In the empirical part, on the basis of the status quo, by introducing the indicator of the number of license contracts which measures the income of getting patent license and the indicator of the number of patent infringement proceedings which measures the prevention of infringement proceedings, this paper finds that the important and common patent application motivation in China of foreign corporations is not to protect their innovation and domestic market from imitation and export from China anymore. Besides, patentees from different countries have different patent application motivation in China because of different economic strengths, international statuses and technological innovation abilities. Concretely it contains the return from gaining patent license, patent blockage and implementing patent infringement proceedings. In the end, according to the theoretic and empirical analyses, this paper offers practical proposals to both Chinese governments and corporations on coping with foreign corporations’ patent application strategies in China.