Quality and Value of Chinese Patenting: an International Perspective

This paper presents a novel analysis of the international dimension of the rapid growth of patenting by Chinese firms fuelled by globalization of R&D activities of foreign multinational firms off-shoring in China and by national inventors employed by Chinese firms. Using an econometric model to analyze patent granting, prior-art searches, opposition to patents granted, and patent renewal decisions, it can be argued that the value and quality of Chinese patents are conditioned by the characteristics of the patent owners. Overall, our results from analysis of these four indicators have provided support for the “strategic patenting” hypothesis on the lower value and quality of Chinese patents compared to other patents on average, though a few caveats are in order. On the one hand, I find that the probability of grant for foreign multinational firms is negative although their patents are relative strong regarding the prior art. The low value effect on opposition and renewal decision is moderate. On the other hand, for Chinese indigenous patenting, I do not find ample evidence that there is lower probability of grant, but I do find support that these patents lack adequate prior art research, receive more oppositions, and have shorter renewal lifecycle compared to other Chinese patents and other patents on average. The size and experience of the patent owner positively mediate these effects. Hence, the findings are consistent with the assumption that large and younger patenters concentrated in a few industries are responsible for the bulk of strategic patenting.