National Strategies and Policies for Innovation: A View from China and India

July 2007

On July 2, WIPO held the fifth in a series of public Patent Colloquia, on the theme of “National Strategies and Policies for Innovation.” Speakers from two rapidly expanding economies, China and India, outlined how the national intellectual property (IP) system could be integrated into national innovation strategies and policies in order to help develop a country’s resources, infrastructure and capacity for economic development. While expressing differences in their approaches, both speakers agreed that the IP system was an important, if not indispensable, factor for economic development.

National IP systems and, in particular, the patent system, are widely recognized as a tool for boosting innovation and technological development. But what is the best way of using this tool in order to maximize the potential benefits it offers? There is no clear-cut answer to the question, not least because any national IP strategy has to take into account that country’s unique situation, requirements and priorities. As a starting point, however, it is useful to learn from the national policies and experiences of other countries in order to reach a better understanding of the role that the patent system may play as one piece within the broader range of development policy measures.

Two invited government officials, Mr. Liu Jian, Division Director, International Cooperation Department, State Intellectual Property Office of the Peoples’ Republic of China (SIPO), and Mr. T. C. James, Director of the Intellectual Property Division, Ministry of Commerce and Industry, India, presented the intellectual property policies of their respective government.

Increasing indigenous innovation

Mr. Liu presented the national innovation strategies detailed in China’s Outline of National Medium- and Long-Term Science and Technology Development (2006-2020). The main goal, he said, was to upgrade the country’s industrial structure in order to make China an innovation-driven economy by 2020. To this end, Mr. Liu emphasized the importance for China of building its capacity for indigenous innovation.

“Core technology cannot be bought. Only by strong capacity of science and technological innovation, and by obtaining our own IP rights, can we promote [China’s] competitiveness and …win respect in the international society.” – Premier Wen Jiabao.

Despite the patenting boom in China, with over 210,000 applications for patents for inventions filed with SIPO in 2006, a large majority of these patents continue to be filed by foreign applicants, particularly in the field of hi-tech and core technologies. Mr. Liu quoted the words of Chinese Premier Wen Jiabao on this central concern: “The core technology cannot be bought. Only by strong capacity of science and technological innovation and by obtaining our own IP rights, can we promote the international competitiveness of the country and can we win respect and dignity in the international society”.

Mr. Liu highlighted three key elements of indigenous innovation which needed to be developed:

generating original innovation in the domain of basic research;
integrating existing technology in order to create competitive new products or business lines; and
assimilating, digesting and improving imported technologies in order to create new IP rights based on those technologies.

China’s IP policies for promoting innovation aimed, therefore, at the following: first, to support Chinese enterprises in building their R&D capacities in order to develop and patent core technologies; second, to assimilate existing technologies while introducing advanced technologies from abroad; and third, to improve the protection of IP rights as a means of encouraging investment in – and the rewards from – innovation.

The national strategy also laid down measures to improve the national innovation system, including:

support to small and medium-sized enterprises,
business-university-academia collaboration,
commercialization of R&D results from research institutes and universities, and
promotion of intermediary services, such as information services, IP agencies, investment services and incubators.

One of the challenges, Mr. Liu noted, was to increase IP awareness in order to establish a culture of innovation and a social environment conducive both to the respect of others’ IP rights and the protection of one’s own. He also emphasized the necessity of effective enforcement of IP rights protection, which, he held, was the most essential part of the IP system.

IP rights - choice or necessity?

Mr. James began his presentation by asking whether a strong IP rights regime was a choice or a necessity. He described the Indian IP strategy as four pronged:

to meet existing international obligations;
to protect the rights of IP holders while safeguarding the public interest;
to modernize the IP rights administration; and
to improve awareness about IP.

Mr. James summarized the different IP laws enacted in India, emphasizing that the Indian legislation aimed to strike a balance between the interests of IP right holders and those of the public.

Before and now. India’s modernized IP administration has eliminated a backlog of over 44,000 patent applications within the past three years. (Courtesy Ministry of Commerce and Industry, India)

In addition to establishing an up-to-date legal framework, the Indian government had embarked on a US$34 million project to modernize the administration of IP rights in the country. This included the construction of four state-of-the-art IP office buildings equipped with the latest IT facilities, a four-fold increase in the number of examiners, and the establishment of an Intellectual Property Training Institute for in-house training. The modernized administration, Mr. James said, had successfully eliminated a backlog of over 44,000 patent applications in the past three years, and it was now possible to obtain a patent in eight months, compared with previous delays of six to eight years. In the past five years, the filing of patent applications had increased three-fold and patent grants five-fold.

Mr. James described the importance of sensitization programs for police and customs officers, for teachers and students, and for business, industry and scientists, which he singled out as a major task in the future. He also noted the important role of international cooperation in the areas of capacity building, human resources development, public awareness programs, development of IP professional skills, joint studies and exchange of experience in the area of protection of traditional knowledge. As a next step, he said, India would seek to become an International Searching and Preliminary Examination Authority under the PCT and would accede to the Madrid Protocol. Further, it would set up a National Institute for Intellectual Property Management which would function as an IP think-tank for training, education and research.

Citing an increase in the number of multinational companies which had set up in India from 18 in 2004 to 50 in 2006, Mr. James expressed conviction that confidence in the IP system was a powerful economic stimulator. An effective and efficient patent system, he believed, encouraged innovative activities and promoted transfer of technology. To achieve this, however, IP rights had to be approached not as a self-contained and distinct domain, but rather as a policy instrument to be deployed in the context of wide ranging socio-economic, technological and political objectives. “The protection of IP rights,” concluded Mr. James in answer to his own question, “is not a choice, but a necessity.”

Report by Philippe Baechtold and Tomoko Miyamoto, Patent Law Section, WIPO

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