Inconsistency in the Assessment of China's Domestic and Foreign Patents

Abstract

Stronger intellectual property rights (IPR) protection is usually acknowledged beneficial for a country’s technology progress (Briggs, 2008; Dinopoulos and Kottaridi, 2008; Grossman and Lai, 2004; Li, 2008; Sequeira, 1998; Tvedt, 2010). However, what if the IPR protection is carried out unequally towards domestic and foreign patents? More specifically, do some national patent offices’ impose strong IPR protection to domestic patents but weak ones to foreign patents? If it is true, then why and how does a patent office treat native and foreign patent applicants differently? Many scholars have recognized the malfunction of patent offices. It can be caused by the congestion of mass applications, inconsistent standards among different patent examiners, incapability of examiners in updating their science and background knowledge over time, or budgetary constraints of patent offices (Abbott, 2004; Burke and Reitzig, 2007; Caillaud and Duchene, 2011; Mack, 2006; Thomas, 2002). However, these failures, due to imperfections of examiners and institutions, should be distinguished from deliberate discrimination against non-citizen patent applications. If foreign patent applications receive such deliberate non-national treatment, which is used as a strategy to protect domestic innovations, we identify it as a kind of strategic patent policy. This chapter exploits the possible strategic patent policy or inconsistency in the assessment of domestic and foreign patents in the Chinese patent office by the analysis of patent data. The content is organized as follows. We first review the literature in Section 13.2, then specify the econometric models in Section 13.3