Enterprise patenting in Zhejiang province
Minghua Xu
Director, Soft Science Institution, Zhejiang Administration School, Hangzhou, China
Jinqi Chen
Zhejiang Administration School, Hangzhou, China
Haibo Bao
Associate Professor, Zhejiang Administration School, Hangzhou, China
PP: 144 - 152
Abstract
This paper investigates patenting development of enterprises in Zhejiang Province, China. The paper indicates that technological capabilities of enterprises and legal regime development are two key factors that affect patenting of enterprises. Both factors explain the status of enterprises in Zhejiang that seems to become active in recent years in the generation of invention, patent application and patenting management.
The analysis shows that the majority of the enterprises are still in imitation stage of latecomer's learning. They are faced with the challenge to become more innovative in the context of China's accession to WTO.
The paper ends with policy recommendations as how to provide, among other things, better legal system, incentives, consultation and information services, so as to improve the environment for enterprises' innovation.
Keywords
intellectual property rights (IPR), enterprise patenting, technological capabilities, legal regimes, Zhejiang
Article Text
Patents are an important legal instrument for protecting intellectual property rights (IPR). Nordhaus (1969) deemed that a patent, by granting innovators temporary monopoly power, would stimulate the innovator to more effort in research and development (R&D) and innovative activities. Meanwhile, the patent encourages technology transfer through circulation of the technological information contained in the patent files.
In recent years, there has been a worldwide surge in interest in patenting, in academia, in policy circles and in the business community. This heightened level of interest has generated a vast body of research focusing on patenting, in contrast to other means of intellectual property protection. Analysis of the research covers patent strategies and decision-making, and the mechanisms in which patents are employed and patented rights are enforced (Cohen, Nelson and Walsh 2000; Hall and Ziedonis 2001; Lanjouw and Schankerman 2001; Lanjouw and Lerner 2001). Research works in this area have considered whether patents play an prominent role in stimulating invention in developed countries (Scherer et al 1959; Taylor and Silberston 1973; Mansfield 1986; Levin et al 1987; Schankerman 1998; Cohen et al 2000). There has, however, been little work, to our knowledge, that analyses the influences of intellectual property rights in a developing country such as China.
This paper aims to fill the hole by studying factors that promote patenting firms and commercialize new technology in China. Based on a survey of patenting at firms in Zhejiang Province, the paper shows that the technological capabilities of enterprises and legal regime are among the factors that affect enterprise patenting.
Zhejiang Province is located on the southeast coast of China, where the most market-oriented economic life and flourishing private companies have developed in the past twenty years. For example, in the list of the Top 500 private enterprises and Top 100 rich businessmen in China, Zhejiang Province holds one-third and one quarter respectively. Zhejiang was not, however, a magnificent place before the market reforms. Under the planned economy, it received the least central investment and therefore established few modern industries. Since China began to engage in market reforms and opened to international trade and technology, provincial development in Zhejiang has relied largely on private initiatives. The private enterprises that gradually gained competitive advantage in several industries are the subjects of this paper.
The paper is organized as follows. Section 2 discusses the characteristic technological capability building of enterprises in Zhejiang, and the relationship between technological capability building and patenting. Section 3 studies the development of the legal systems for IPR. Legal systems, which compose the environment where the enterprises manage their IPR, have been changing in the economy reforms. Section 4 concludes the discussion.
References
Barzel Y (1989) Economic Analysis of Property Rights 2nd edn, Shanghai People's Publishing House, Shanghai, p.5.
Bernstein JI (1989) The structure of Canadian interindustry R&D spillovers and the rates of return to R&D, Journal of Industrial Economics 21: 324-47.
Cohen WM, Nelson RR and Walsh JP (2000) Protecting their intellectual assets: appropriability conditions and why US manufacturing firms patent (or not), National Bureau of Economic Research, Working Paper No. 7552, Cambridge, Massachusetts.
Griliches Z (1992) The search for R&D spillovers. Scandinavian Journal of Economics 94(Supplement): 29-47.
Hall BH and Ziedonis RH (2001) The Patent Paradox Revisited: An Empirical Study of Patenting in the US Semiconductor Industry, 1979-95, RAND Journal of Economics 32(1): 101-128.
Hiroshi Ota (1992) Policy Implications for the United States, in Japan's Growing Technological Capability: Implications for the US Economy, Arrison TS, Bergsten CF, Graham EM and Harris MC (eds), National Academies Press, Washington.
Jones CI and Williams JC (1977) Measuring the social return to R&D, Finance and Economics Discussion Series Staff Working Paper 1977-12, Federal Reserve Board, Washington DC, February.
Kim L (1997) Imitation to Innovation: The Dynamics of Korea's Technological Learning, Harvard Business School Press, Boston, Massachusetts.
Kim L and Nelson RR (2000) Technology, Learning, and Innovation: Experiences of Newly Industrializing Economies. Columbia University Press, New York, p3.
Lanjouw J and Lerner J (2001) Tilting the Table? The Use of Preliminary Injunctions, Journal of Law and Economics 44(2): 573-603.
Lanjouw JO and Schankerman M (2001) Characteristics of Patent Litigation: A Window on Competition, RAND Journal of Economics 32(1): 129-151.
Levin RC, Klevorick AK, Nelson RR and Winter SG (1987) Appropriating the Returns from Industrial R&D. Brookings Papers on Economic Activity 3: 783-820.
Mansfield E, Rapoport J, Romeo A, Wagner S and Beardsley G (1977) Social and private rates of return from industrial innovations. Quarterly Journal of Economics 91(2):221-40.
Mansfield E (1985) How Rapidly Does New Industrial Technology Leak Out? Journal of Industrial Economics 34(2): 217-223.
Mansfield E (1986) Patents and Innovation: An Empirical Study, Management Science 32: 173-181.
Nordhaus WD (1969) Invention, Growth, and Welfare: A Theoretical Treatment of Technological Change, MIT Press, Cambridge, Mass.
Schankerman M (1998) How Valuable Is Patent Protection? Estimates by Technology Field. RAND Journal of Economics 29: 77-107.
Scherer FM, Herzstein S Jr, Dreyfoos A, Whitney W, Bachmann O, Pesek C, Scott C, Kelly T and Galvin J (1959) Patents and the Corporation: A Report on Industrial Technology Under Changing Public Policy 2nd edn. Boston, MA: Harvard University, Graduate School of Business Administration.
Taylor CT and Silberston ZA (1973) The Economic Impact of the Patent System: A Study of the British Experience, Cambridge: Cambridge University Press.
Utterback JM and Abernathy (1976) The dynamic model of product and process innovation, Omega 3: 639-655.
Yang W (1999) The Property of Technology Innovation, Tsinghua University Press, Beijing, pp.146-150.
Zhao X and Xu Q (2002) The Path of Technological Capability Evolution, Science Research Management 23(1): 70-76.
eContent Home
