Quality and Value of Chinese Patenting: An International Perspective

Abstract

This paper presents a novel analysis of the international dimension of the rapid growth of Chinese patenting and advances an econometric model to scrutinize the determinants of patent granting, prior-art searches, opposition to patents granted, and patent renewal decisions. Our results provide 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 life cycle 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.

Keywords: Patent value, Quality, China, International patent filings, Firm level analysis

JEL Classification: O31, O34