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Analysis: Winning the patent game in Asia


Vivek Nanda
EE Times
(03/21/2006 7:51 AM EST)


http://www.eetimes.com/news/semi/showArticle.jhtml?articleID=183701296

We've heard so much about it over the last several years that intellectual property (IP) issues hardly get us excited. Yes, we all know about both sides of the story — the complaints by both patent holders mostly outside Asia and those in Asia new to the patent regime.

A recent report by the U.S.-based Manufacturing Policy Project concludes that companies from countries with weak IP protection are copying technologies from unprotected patent applications that the U.S. Patent and Trademark Office (USPTO) and Japan's Patent Office (JPO) post on the Internet. The JPO found out that its applications are being examined about 17,000 times daily from China and 50,000 times daily from South Korea.

The report claims that Chinese pirates and counterfeiters are now defending themselves with a new technique called “A Great Wall of Patents.” This process involves filing for patents in China for the products copied. The applications are claimed to use modified drawings and descriptions taken from the patent office Internet sites in the United States, Europe and Japan.

The report finds three patent crises for the United States: piracy costs U.S. IP owners about $50 billion a year; patent pendency rates are close to 30 months, which is impeding introduction of newer and better technologies; and the U.S. 18-month rule allows copying of proprietary U.S. technology.

The industry has often said that once IP violators become IP owners, both the respect for IP and its protection will increase. The good news for everyone involved is that IP ownership is indeed gaining ground in Asia, according to statistics from the World Intellectual Property Organization (WIPO). The WIPO, headquartered in Geneva, Switzerland, is a specialized agency of the United Nations. It administers the Patent Cooperation Treaty (PCT), which involves 128 countries, and 22 other international treaties dealing with IP protection.

In 2005, over 134,000 PCT applications were filed at the WIPO, representing a 9.4 percent increase over the previous year. While the top five countries that use the international patent system remained the United States, Japan, Germany, France and the United Kingdom, the highest rates of growth came from Asia — from Japan, South Korea and China, which between them accounted for about 24 percent of international applications, compared to 34.6 percent from countries with the European Patent Convention and 33.6 percent from the United States.

Since 2000, applications from Japan, South Korea and China have increased by 162 percent, 200 percent and 212 percent, respectively. India's filings too have been growing at a decent clip of about 27 percent compound annual growth rate since the year 2000. Overall, the international patent applications from developing countries in 2005 saw a 20 percent increase, and represented 6.7 percent of applications filed.

The top ten applicants of the PCT from developing countries included Samsung Electronics, LG Electronics and the Electronics and Telecommunications Research Institute (ETRI) from South Korea, Huawei Technologies and ZTE Corp. from China, Council of Scientific and Industrial Research (CSIR) from India, and Agency for Science and Technology and Research from Singapore.

Perhaps the most interesting way of boosting IP ownership is that employed by China. China has done some amazing work in standards in the area of 3G cellular (TD-SCDMA), media (enhanced versatile disc), audio/video coding (AVS) and RFID. The home-grown standards or variations of standards established elsewhere allow China, among a few other things, to promote the development of IP by local companies.

South Korea, a large investor in China, seems to be headed the same way with its digital mobile broadcast (DMB) standard that is derived from the digital audio broadcast (DAB) standard widely used in Europe.

Perhaps, one of the means to success in the IP ownership game is for Asian countries to join together, as European countries have, in setting regional standards. This, I believe, would maintain the obvious benefits of having standards while increasing Asia's competitiveness.

Vivek Nanda is editor-in-chief of EE Times Asia, a sister publication to EE Times.