Companies lack of know-how about patents and the nation's weak grasp of intellectual property rights (IPR), are holding China back, a senior official said yesterday.

Lu Yongxiang, vice-chairman of the Standing Committee of National People's Congress (NPC), warned that a lack of experience in patent applications was restraining China's ambition of becoming an "innovative country."

Between 1998 and 2003, 99 per cent of Chinese companies did not apply for a single patent, said Lu.

Even the country's 166 biggest companies, only applied for an average of 226 each less than 20 per cent of the applications made by their foreign counterparts, he added.

His remarks came as he reported the review of the implementation of the Patent Law to NPC Standing Committee members in Beijing. The law was passed in 1984 and has been revised twice in the past two decades.

Many high-tech invention patents are applied for by foreign companies, especially in wireless transmission, mobile telecommunications, semiconductors, medicines and computers, according to Lu, who is also president of the Chinese Academy of Sciences. 
For example, 91 per cent of mobile telecommunications patents are held overseas.

The result is that Chinese enterprises have to pay high fees for using these core technologies, sometimes as much as 40 per cent of the total price of the product, according to Lu.

Since China's accession to the World Trade Organization in 2001, Chinese enterprises have paid over US$1 billion in economic compensation due to IPR disputes with foreign companies, said Lu.

Another patent-related problem is that many Chinese inventions come from universities or research institutes, which have little access to market development.

 Many patents are only academic-oriented and could not be developed into market products, according to Lu.

He urged Chinese companies to devote more investment to technological innovation, and governments and people's courts at all levels to improve IPR protection work.

Lu added that the NPC Standing Committee plans to revise the Patent Law to better adapt it to the current situation in China.

(China Daily June 29, 2006)