March 21, 2018 / 1:50 PM / a month ago

China intellectual property filings soar, hard to judge if it plays fair: U.N.

GENEVA (Reuters) - China is now a major producer of innovative technologies, nosing ahead of Japan to become the second biggest source of international patent applications, the United Nations said on Wednesday.

FILE PHOTO: A labourer works inside an electronics factory in Qingdao, Shandong province, China January 29, 2018. REUTERS/William Hong/File Photo

China’s fast growth in intellectual property has led to accusations by U.S. President Donald Trump that it has stolen American ideas, but the head of the U.N. World Intellectual Property Organization (WIPO) said it was hard to tell.

“The reality is a new competitor has arrived,” WIPO Director General Francis Gurry told a news conference in Geneva.

“We will just observe what occurs now but I would say that the commercial, economic and geopolitical reality that we must take cognizance of is that China has arrived as a major technological competitor.”

At current rates China will overtake the United States to become the biggest source of international patent applications in the WIPO system within three years, WIPO said.

The top filers of patent applications at WIPO in 2017 were Chinese technology companies Huawei [HWT.UL] and ZTE Corp (000063.SZ), followed by U.S.-based Intel Corp (INTC.O), Japan’s Mitsubishi Electric Corp (6503.T) and the U.S. company Qualcomm Inc (QCOM.O).

China’s applications for international trademarks in WIPO’s system rose 36 percent last year and it was clear the country had gone from being a consumer of technologies to a producer of technologies, putting it at the heart of a global innovation race, Gurry said.

China’s top leadership had taken an extremely strategic approach to turn China into the laboratory of the world, with policies aimed at fields such as artificial intelligence and advanced manufacturing.

It was up to individual countries to decide how to respond, Gurry said. There were plenty of anecdotes about China’s behavior but assessing if it had played by the rules was a huge question.

“You’re talking about a very complex innovation ecosystem, comprising regulatory framework, institutions, individual actors across a vast country. I don’t think one could take a judgment on that question even without an extremely careful analysis of a huge amount of detail and evidence.”

China’s patent applications at WIPO have recorded double-digit annual growth in every year since 2003.

Trump told Reuters in January he was considering imposing a big fine on China for intellectual property theft.

He is expected to unveil up to $60 billion in new tariffs on Chinese imports by Friday, targeting technology, telecommunications and intellectual property, two officials briefed on the matter said on Monday.

Gurry said he could not comment on the U.S. complaint since he had not yet seen any evidence, nor did he know what would be proposed. WIPO would not adjudicate such a dispute, but China might take its complaint to the World Trade Organization.

    Reporting by Tom Miles; Editing by Susan Fenton

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