China has revealed itself as the enfant terrible of patent applications. Well known for its leading position in copying foreign products, China has increasingly been filing patents to protect domestic products and established itself as one of the world's leading patent applicants since the turn of the millennium.

A current study by ZEW, Mannheim, in collaboration with the German Graduate School of Management and Law (GGS), Heilbronn, developed a quality index allowing researchers to measure patent quality in cross-country comparison. The study revealed a widening gap between patents from China and high- income countries as well as a decrease in patent quality over time.

In order to file an international patent application, each applicant has to undergo the Patent Cooperation Treaty (PCT) procedure. China currently ranks third in terms of applications made under the PCT, surpassing Germany as one of the greatest global sources of patent applications. On the one hand, China's patent expansion has been accompanied by a rise in research and development investments. On the other hand, this expansion could have also been driven by patent subsidies and political targets. This raises the question as to how much Chinese patents are truly worth.

In order to facilitate international comparison, the study developed the so-called ISR (International Search Reports) index to measure the quality level of PCT applications. The index is based on patent citations of PCT applications, which are listed in the ISR. The quality comparison is made on the basis of reports of Chinese and non-Chinese PCT applications. Almost all non-Chinese applications were filed by high-income countries, i.e. the leading technology nations. The ISR index shows that China's patent quality is significantly below that of high-income countries.

"Between 2001 and 2009, Chinese PCT applications only reached 34 per cent of the quality level of non-Chinese applications," explains Dr. Philipp Boeing, ZEW researcher and author of the study. Furthermore, patent quality decreased significantly in the period considered in the study. "Chinese patent expansion has come at the cost of patent quality," concludes Boeing, summarising the results of the study.

The study is available for download (in English only) at:
http://ftp.zew.de/pub/zew-docs/dp/dp16048.pdf

For more information please contact:
Dr. Philipp Boeing, Phone: +49(0)621/1235-377, E-mail boeing@zew.de