Balancing Authoritarian Innovation and Accountability: An Empirical Study on the Dual-Track of Patent Intellectual Property Right Protection in China (1986-2020)

Project: Research

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Seeking to promote innovation as the engine of future economic growth, China has poured a tremendous amount of resources to encourage patent innovation, and to reform the intellectual property rights (IPR) regime that has emerged as a key domain of China's national innovation system (Nelson, 1993; Weightman, 2020). By 2016, the number of patent applications in China had exceeded the sum of patent applications from USA, Japan, South Korea and Europe. Alongside the skyrocketing patent applications is a dramatic surge in patent disputes. China's patent litigation has increased by 343% from 2008 to 2019 (CNIPA 2008, 2019). Although China's standing has been tarnished by its “pirate” notoriety for widespread infringes and inadequate enforcement of IP protection, China has become the most IP-litigious nation in the world (Suttmeier & Yao, 2011). The optimists assert that the inundation of patent application and infringement litigations is simply China catching up with technological leaders and strengthening its IP protection; while the critical voices argue that China's low-quality “patent bubbles” indeed suggest a widening gap between China and the technological leaders. Embedded in such debate is the institutional quandary of patent IP protection: disputes over low-quality patents could waste legal and institutional resources, while the high-quality patents might attract strategic patent litigation trolls. In other words, China has to balance between developing its innovation-based economy and constructing institutional fairness and accountability of its national innovation system. To engage in the debate on if China is catching up requires a comprehensive understanding of China's patent IPR protection. To this end, there is a growing trend of empirical studies on patent litigations, especially after the 2013 judicial transparency reform that makes the courts' Documents of Adjudication Decisions accessible to the public (for example, Bian,2018; Long & Wang, 2015; Yin & Liang, 2015; Zhang, Curpi & DiMinin, 2020). However, upon investigation of patent IP protection there are two major problems worth noting. First, China practices a dual-track of patent IP protection and the administrative procedure often proceeds the legal remedy. When patent disputes occur, involved parties often file patent invalidation requests to China's National Intellectual Property Administration (CNIPA) before or when they file an infringement litigation against the alleged infringers. The courts have to stay until the Patent Review Adjudication Board (PRAB) makes a decision on the validity of the patent in dispute. As a result, a significant percentage of patent disputes are resolved either via administrative mechanisms or settled before they even show up in the litigation databases. Second, not all patent litigation decisions are released to public in China. Chinese courts tend to withhold certain patent litigation decisions when it deems necessary. As such, solo investigations on patent litigation, even though insightful, won't be able to capture the full extensity of patent disputes nor to evaluate the impacts of the dual-track patent IPR regime. Thus, focusing on the administrative-legal duality of patent IP regime, this study presents a novel perspective to gauge institutional protection of patent innovation by analysing a unique dataset of PRAB's administrative adjudications decisions on patent invalidation requests in the past four decades and related administrative lawsuits against PRAB. By matching these two datasets with features of patents in dispute, and characteristics of involved disputers, and regional economic statistics, this study aims: 1) to explore what factors shape China's administrative adjudications on patent validity and how the administrative decisions change over time; 2) to investigate if the administrative agencies make fair decisions and if judiciary review can hold the administrative bureaucracy accountable; and 3) to discuss the impacts of this administrative-legal dual track system on China's innovation strategies in the global competition. The above inquiries are significant for policy makers and innovation practitioners. Ever since the US started putting the screws to Chinese tech companies over the past two years, the pressure on China's tech supply chains has motivated a desire for indigenous innovation. In a recent 2020 symposium with top scientists, industry leaders, and politicians, Xi Jinping urged China to reduce its reliance on foreign technology, especially on the core technology arena, within the span of the next Five-Year Plan. To what extent China can move beyond simply throwing money at scientists to spur innovation, while turbocharging a healthier and broader national innovation environment will be crucial for China's future. Given China's status in global development and politics, our findings will not only contribute to a nuanced understanding how China navigates economic development, bureaucratic accountability and judiciary fairness in its path of innovation, but also offer insights for various policy-makers and stakeholders, foreign and domestic, to develop relevant strategies in the global competition of technology innovation. 


Project number9043272
Grant typeGRF
StatusNot started
Effective start/end date1/01/22 → …