HongFangLaw ~ Chinese IP Law Updates ~ n’ 2
29 July 2016

An Interpretation of Statistics Report on China Patent 2015(I)
Corporate-Owed“Dormant Patent”

Chinese?State?Intellectual Property?Office published Statistics Report on China Patent 2015(the “Report”) which contained statistics information throughout each phases of patent research and development, use, management and protection.

The Report brings to light some patent-related phenomena and issues. “Dormant patent” is particularly worthy of attention.

According to statistics, patents invented by enterprise and ultimately put into market consist of no more than 52.3%. In other words, nearly half of the corporate patents have not been made best use of by the inventors. Meanwhile, data shows the percentages of patent licensing and assignment in relation to active patents are 10% and 5.9%, respectively.

How to activate the “dormant patents” is a challenge that emerges in the process of enterprise patent management.

At the core of the problem are unusable patent resulting from unclear R&D purpose, patent quality insufficient to meet up with production demand, diminishing market demand for patented product, patent defense initiated by enterprise, patent hoarding policy etc..

To solve the problem, corporation can market patents in dormant status, boost the circulation (i.e. licensing, assignment) of such patents to yield economic benefits. On the other hand, small and medium enterprises which do not need patent defense may consider suspending the payment of annuity for the non-economically beneficial patent, so as to avoid cost accumulation.

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