China’s Rise in U.S. Patent Grants

As reported by IFI CLAIMS Patent Services, in 2018, the number of patents granted by the U.S. Patent & Trademark Office (USPTO) experienced its first noticeable decline in ten years. While analysts cannot fully explain the dip in grants, they expect it to be temporary.

Of the top ten countries in U.S. patent activity, China was the only one to demonstrate an increase in 2018 U.S. patent grants. Chinese companies currently account for just four percent of the 2018 grants, but experienced a radical twelve percent growth from 2017. This ranks China as the fifth top U.S. patent recipient for the very first time, behind the U.S. (31% of 2018 grants), Japan (16%), South Korea (6.5%), and Germany (5%).

The Chinese patent grants are led by Huawei, the world’s largest supplier of telecommunications network equipment and second-biggest maker of smartphones. Huawei is one example of a recent shift in the Chinese technology development model: spending heavily on research and development and expanding into global markets. Larry Cady, a senior analyst at IFI CLAIMS, is confident that China’s IP developments will continue to grow: “China’s going to overtake Germany shortly.”

Currently the world’s second largest economy by nominal GDP, China has spent billions on research in new technologies, including artificial intelligence, quantum computing and biotechnology.

While these advancements have many consequences, one in particular is a new arms race between the U.S. and China prompted by emerging quantum developments. In November 2018, China’s largest defence electronics company, China Electronics Technology Group Corporation, announced a radar that uses quantum physics to detect stealth aircraft in flight. Such quantum-inspired technologies present a game-changing opportunity in warfare. The U.S. National Defense Strategy Commission agreed in a recent report, describing “a grave crisis of national security and national defense, as U.S. military advantages erode and the strategic landscape becomes steadily more threatening.”

Author: Christina Liao