Danny Friedmann
The goal of the China IP Index is to “assess and analyze the different development status of intellectual property capacities in 31 provinces and municipalities of China through setting up a scientific, systematic and formal system.” The result, that only focuses on protection (namely application and registration) of IPRs and not on enforcement and excludes the whole category of copyright is claimed to be of “substantial significance”, by the researchers of the index here. Whether this is justified will be questioned after an overview of the ranking.
RANKING: The East Coast still dominates “developed” IPR
The index gives an indication of the development of IP in the different provinces and municipalities. Unsurprisingly Beijing 北京, the place where the central power resides, ranked also in 2012 as the place with the best developed IP in China. The first 9 places in the ranking of the provinces and municipalities of China have not changed since last year and are all located in the Eastern part of China. Interestingly Chongqing 重庆, that has been in the news so frequently because of the developments concerning the Chongqing party chief who was removed from power in March 2012, made it into the top 10. It’s the only Western municipality or province that made it in the top 10. Shaanxi 陕西 rose four places to position 12. Hainan 海南 rose also four places to position 19.
Learn which Chinese province and municipality has most developed IPR
1. Beijing 北京 2012 (1) 2011 (1)
2. Shanghai 上海 2012 (2) 2011 (2)
3. Guangdong 广东 2012 (3) 2011 (3)
4. Jiangsu 江苏 2012 (4) 2011 (4)
5. Zhejiang 浙江 2012 (5) 2011 (5)
6. Shandong 山东 2012 (6) 2011 (6)
7. Tianjin 天津 2012 (7) 2011 (7)
8. Liaoning 辽宁 2012 (8) 2011 (9)
9. Fujian 福建 2012 (9) 2011 (8)
10. Chongqing 重庆 2012 (10) 2011 (12)
11. Hunan 湖南 2012 (11) 2011 (10)
12. Shaanxi 陕西 2012 (12) 2011 (16)
13. Hubei 湖北 2012 (13) 2011 (11)
14. Anhui 安徽 2012 (14) 2011 (15)
15. Sichuan 四川 2012 (15) 2011 (13)
16. Henan 河南 2012 (16) 2011 (14)
17. Hebei 河北 2012 (17) 2011 (17)
18. Shanxi 山西 2012 (18) 2011 (20)
19. Hainan 海南 2012 (19) 2011 (23)
20. Inner Mongolia 内蒙古 2012 (20) 2011 (22)
21. Jilin 吉林 2012 (21) 2011 (18)
22. Heilongjiang 黑龙江 2012 (22) 2011 (19)
23. Jiangxi 江西 2012 (23) 2011 (21)
24. Guizhou 贵州 2012 (24) 2011 (26)
25. Guangxi 广西 2012 (25) 2011 (24)
26. Yunnan 云南 2012 (26) 2011 (25)
27. Xinjiang 新疆 2012 (27) 2011 (29)
28. Gansu 甘肃 2012 (28) 2011 (27)
29. Ningxia 宁夏 2012 (29) 2011 (28)
30. Qinghai 青海 2012 (30) 2011 (31)
31. Tibet 西藏 2012 (31) 2011 (30)
China IP Index less than usefull (Tweet this at Twitter)
There is a certain relationship between the implementation of intellectual property rights law and economic development as Fink and Maskus have shown in their 2005 research for the World Bank, see here. That there is also a relation between development of a region and its IPR is made clear by the China Intellectual Property Index, which was composed by a consortium of Chinese universities and research institutes.
If one looks at the work done to get the index, a compliment is in order. It must have been a Herculean task to gather all the information in a standardised way from the 31 places, which are decentralised power centers.
However, one can pose questions to its usefulness. To make a ranking which measures the percentage of patents or trademarks per so many people or companies puts a premium on the quantity of patents and trademarks, regardless its quality. The percentage of IPRs in a region is rather a result of economic development and subsidizing the application of patents and trademarks, as can be expected after such rankings, can lead to misallocation of funds that could be invested in more productive ways. Read also IP in China: Quantity Obsessed, Quality Challenged. The index tried to offset the quantitative emphasis by also looking at patents that are still valid after five years, which helps somewhat. Then again, if a patent never get revoked it does not necessarily mean it has quality, since it could mean that it is that insignificant that competitors do not even bother.
Black hole in China Intellectual Property Index (Tweet this at Twitter)
Copyright non-existant in China Intellectual Property Index (Tweet this at Twitter)
China IP Index Excludes Enforcement (Tweet this at Twitter)
Intellectual property rights constitute of copyright and industrial rights. The CIPI only focuses on the latter part, patents and trademarks. Therefore it might better be renamed China Industrial Property Index. Copyright is an important aspect of intellectual property rights. The development of copyright in China is problematic because copyrighted material is subject to censorship.
Another problem with the index is that it does not measure anything related to enforcement of intellectual property rights. In other words, you might have a lot of IPRs, but what is it all worth if you cannot enforce it at a sufficient level? This author has proposed the enforcement/infringement ratio to measure enforcement of IPR in China.
METHODOLOGY
The China IP Index is based on the following two legs: Current status development and Potential of development.
The Current status development can be divided into three parts:
Level of intellectual output;
Level of intellectual fluidity/liquidity;
Economic performance of intellectual property.
– Level of intellectual output: is based on output scale, quality, structure and efficiency
Output scale is looking at patent, trademark and new varieties of plants and animals scale index.
– Patent scale index is based on: Annual Application Quantity of the Patents within the Country, Annual Quantity of Granted Patents within the Country and Annual Application Quantity of PCT Patents.
– Trademark scale index is based on: Annual Application Quantity of Trademarks and Annual Quantity of Registered Trademarks.
– New varieties of plants and animals scale index is based on: Annual Application Quantity of New Varieties of Plants and Animals. (it’s strange that CIPI is not taking into account the granted new varieties of plants and animals)
Output quality is looking at the patent and trademark quality index.
– Patent quality index is based on: Patent Application Quantity in Every Ten Thousand People (IP Dragon has pointed out before that this does not really make sense) and Granted Patent Quantity in Every Ten Thousand People.
– Trademark quality index is based on: Trademark Application Quantity in Every Ten Thousand People, Registered Trademark Quantity in Every Ten Thousand People.
Output structure is looking at the invention patent index, patent validity, enterprise patent index and well-known trademark index.
-Invention patent index is based on: Annual Invention Patent Application Quantity in Every Ten Thousand People in Position, Annual Granted Invention Patent Quantity in Every Ten Thousand People in Position, Percentage of Annual Invention Patent Application within the Country and Percentage of Annual Granted Invention Patent Quantity within the Country.
– Patent validity is based on: Quantity of Valid Patent within the Country (in excess of 5 years) and Quantity of Valid Invention Patent within the Country (in excess of 5 years).
– Enterprise patent index is based on: Annual Employment Patent Application Quantity of Enterprises, Annual Granted Employment (Patent) Quantity of Enterprises, Annual Employment Invention Patent Application Quantity of Enterprises, Annual Granted Employment Invention Quantity of Enterprises, Annual Employment Invention Patent Application Quantity of Large-Medium Sized Industrial Enterprises and nvention Patent Quantity Owned by Large-Medium Sized Industrial Enterprises.
– Well-known trademark is based on: Quantity of Well-known Trademark Owned by Enterprises.
Output efficiency is looking at talent, capital and enterprise output efficiency.
– Talent output efficiency is based on: Annual Employment Invention Patent Application Quantity in Every Ten Thousand Scientific and Technical Personnel, Annual Invention Patent Application Quantity in Every Ten Thousand Scientific and Technical Personnel in Large-Medium Sized Industrial Enterprises.
– Capital output efficiency is based on: Annual Invention Patent Application Quantity in Every Hundred Million R&D Expense, Annual Employment Invention Patent Application Quantity in Every Hundred Million Scientific and Technical Expense.
– Enterprise output efficiency is based on: Annual Invention Patent Application Quantity in Every Ten Thousand R&D Personnel of Large-Medium Sized Industrial Enterprises and Annual Invention Patent Application Quantity in Every Hundred Million R&D Expenses of Large-Medium Sized Industrial Enterprises.
– Level of intellectual property liquidity is based on transaction index in technical market, intellectual property intermediate index, enterprise technology introduction index.
Transaction index in technical market is looking at the Scale index of technical market, openness index of technical market and spillover index of technical market.
– Scale index of technical market is based on: Quantity of Contracts Stipulated in Technical Market, The Concluded Contract Amount in Technical Market and Portion of Concluded Contract Amount in Technical Market in GDP.
– Openness index of technical market is based on: Overseas Contract-Introduction Quantity and Contract Amount Introduced Overseas.
– Spillover index of technical market is based on: Ratio between the Quantity of Contracts Concluded in the Technical Market and Quantity of Contracts in the Technology Spillover Place and Ratio between the Amount of Contracts Concluded in the Technical Market and Amount of Contracts in the Technology Spillover Place.
Intellectual property intermediate index is looking at the trademark and patent intermediate indices.
– Trademark intermediate index is based on: Quantity of Trademark Agents and Quantity of Trademarks Acted for by the Agents.
– Patent intermediate index is based on: Annual Quantity of Patents Application Acted for by the Agents and Annual Quantity of Invention Patents Application Acted for by the Agents.
Enterprise technology introduction index is looking at the inner technology introduction index and the overseas technology introduction index.
– Inner technology introduction index is based on Inner Technology Purchase Expense of the Large-Medium Sized Enterprises and Overseas Technology Introduction and Absorbing Expense of Large-Medium Sized Enterprises.
– Economic performance of intellectual property is looking at macro economic performance, enterprise development performance and social development performance.
Macro economic performance is based on: an economic development level based on GDP per capita and annual disposable income of urban households; transit of economic development style based on labour capacity and energy consumption of gross local product; and economic structure optimising based on Proportion of Import and Export Income of High-Tech Products in That of the Whole Country and Proportion of Value Added of the Up-scale High-tech Enterprises in That of the Whole Country.
Enterprise development performance is based on: production escalating index which is based on Portion of Output Value of New Production of Large-Medium Sized Industrial Enterprises in Gross Industrial Output Value and Portion of Sales Income of New Production of Large-Medium Sized Industrial Enterprises in Main Business Income; and the equipment update index which is based on the Original Price Portion of Micro-electronic Controlling Equipments of Large-Medium Sized Enterprises in equipment Used in Manufacture and Business Operation.
Social development performance is based on Environment Improvement which is Non-hazardous Treatment Ratio of Daily Disposal and Industrial Wasted Water Discharge Rate; Social development which is based on average life expectancy; and Informatization of Social Life which is based on internet coverage rate and mobile phone popularizing rate.
The Potential of development is looking at the creativity input index, creativity product index and creativity environment index.
Creativity input index consist of three parts: talent, capital and enterprise input indices.
Talent input index is based on R&D Full-time Equivalent, Scientific and Technical Personnel in Every Ten Thousand People and Proportion of Scientific Engineers in the Scientific and Technical Personnel.
Capital input index is based on Proportion of R&D Expenses in the GDP, Proportion of Local Financial And Scientific Appropriation in Local Scientific and Technical Expenses, Scientific And Technical Expenses Per Capita and Fundamental Research Expenses Per Capita.
Enterprise input index is based on Proportion of Scientific Engineers in the Scientific and Technical Personnel of Large-Medium Sized Industrial Enterprises, Proportion of R&D Expenses in the Main Business Income of Large-Medium Sized Industrial Enterprises, and New Product Development Expenses of Large-Medium Sized Industrial Enterprises.
Creativity product index consist of two parts: thesis and technical project indices.
Thesis index is based on Technical Thesis Quantity in Chinese Journals within China and Chinese Thesis Quantity Collected by Main Foreign Search Tools.
Technical project index is based on Quantity of National Industrialized Projects in Plan, and Quantity of New Products Developed by the Large-Medium Sized Industrial Enterprises.
Creativity environment index is based on the Financial support index, Financial environment index, openness index and education environment index.
Financial support index is based on the Local Financial Income Per Capita.
Financial environment index is based on Loan Balance in the Financial Institute Per Capita at the End of A Year.
Openness index is based on Proportion of Foreign Investment Amount in GDP, and Proportion of Export Amount in GDP.
Education environment index is based on Proportion of Education Expenses in the Local Financial Expenses, and Undergraduates of Colleges and Universities Per Hundred Thousand People.
Have a question? We take questions at: info at ipdragon point org.
Text Danny Friedmann
Chenwei Zhang IP Dragon Update