No copycats here: China's Huawei leads international patent filings, according to UN

PUBLISHED : Friday, 20 March, 2015, 12:32pm
UPDATED : Friday, 20 March, 2015, 2:08pm

Despite companies in China having a reputation for being "copycats", a Chinese firm has led the world in filing international patents for innovations and new technology for the second time in three years.

Shenzhen-based telecom giant Huawei Technologies was the world's No. 1 applicant for international patents in 2014, a United Nations agency said Thursday, underscoring the innovative strides made by Chinese technology companies.

Huawei was followed by San Diego-based chipmaker Qualcomm Inc while Huawei's crosstown rival ZTE Corp, which was the world's leading applicant in 2012, took third place in its number of filings, according to the World Intellectual Property Organization (WIPO).

WIPO's report, which is sometimes viewed as a rough barometer of a country's technological progress, noted that China was the only country to see double-digit growth in its filings, although US companies led by far. High-tech and automotive powerhouse Japan, home to last year's leading applicant Panasonic Corp, saw its total filings slide.

In recent years China's top policymakers have offered incentives to nudge Chinese companies to shift from low-value, low-cost manufacturing to fostering innovation.

The country has also made a series of reforms to improve IP enforcement within its legal system, long considered dubious by foreign and Chinese firms alike.

However, Tencent boss Pony Ma Huateng said this month that work still needs to be done to strengthen IP protections.

"I can't overstate the importance of rule of law. I have said on different occasions that many of the questions boil down to lax law enforcement,” he said on the sidelines of the annual meeting of the National People's Congress in Beijing.

“Tencent has won many lawsuits, and … received millions in damages in the highest case, which wasn’t bad, but it doesn’t amount to much of a deterrent, given they might have made hundreds of millions in US dollars elsewhere,” Ma said.

“It doesn’t deter violators at all, therefore often you’ll find it’s a case of bad money drives out good."

Innovation was a key point of Chinese premier Li Keqiang's annual address at the NPC. Li, who made a high-profile visit to Huawei's research and development centre in January, said start-ups and tech companies could become drivers of China's economic growth and employment in the near future.

Huawei has touted its yearly research and development budget - equal to 10 percent of its revenue - as proportionally higher than many of its peers in industry. Chief Executive Ken Hu told reporters in Barcelona this month Huawei will spend $600 million on 5G wireless research and development from 2013 to 2018.

Chinese technology industry observers say Qualcomm's antimonopoly settlement reached this year with Chinese regulators could spark a patent war as Chinese firms such as ZTE use their IP portfolios - and a stronger legal regime - to extract royalties from smartphone makers.