China Ranks First Blockchain Patent Applications, why Only 19% Approved

Entrepreneurs in China are submitting extra blockchain patents than any nation on Earth, however solely a fraction of these functions are being accepted. 

According to Jianwei Wang, the deputy director on the Ministry of Industry and Information Technology, Chinese blockchain patents account for 84% of the world’s complete. 

In an announcement subsequently reported by the South China Morning Post, Wang stated that blockchain, “accelerates integration with the financial system, companies for folks’s livelihoods, good cities and administrative companies”.

Wang didn’t specify over what time interval his 84% declare was measured, however his feedback do align with a Statista report in Jan. which measured the distribution of global blockchain patents over 2021

That is just one a part of the story, nonetheless. One potential level of concern for Chinese development is that solely a fraction of these patents are ok to win closing approval.

Further knowledge means that much less of these accepted patents go on to change into profitable merchandise than in competitor nations such because the U.S. or South Korea.

Distribution of worldwide blockchain patents in 2021, by nation (Source: Statista)

A extremely complicated and irritating system

In China, cryptocurrency stays topic to a nationwide ban, however the underlying blockchain expertise isn’t. The mining of cryptocurrency can also be banned, forcing operations underground.

Meanwhile, a Chinese courtroom just lately discovered that the possession and buying and selling of cryptocurrency is protected by regulation, so long as that cryptocurrency is traded as property and never foreign money, as a result of cryptocurrency can’t be foreign money, and subsequently it isn’t. 

Such mind-bending semantics recommend that if the Chinese Communist Party (CCP) was to abolish singing within the rain, Chinese innovators and lawmakers would finally discover a technique to dance between the raindrops.

China’s burdensome and oppressive edicts have resulted in a extremely centralized atmosphere by which the nation is way forward of the expertise curve in sure areas equivalent to its digital yuan, however the place innovation is annoyed elsewhere.

State-backed tasks together with the CBDC-related Blockchain Service Network (BSN), proceed to do properly in China’s home market.

The community now operates 28 blockchain frameworks, with 3,000 complete apps created by a 25,00 robust military of builders. Major trade gamers equivalent to Emperor Group, HSBC, Lan Kwai Fong Group and Maxim’s Group are amongst its prospects.

BSN now has plans to construct on its success and change into a world drive, however it might discover important challenges to abroad adoption. 

In different expertise areas, equivalent to 5G, governments, together with the U.S. and the U.K., have banned Chinese expertise. The notion is that state-backed Chinese corporations are too carefully tied to the CCP and subsequently pose a significant safety risk.

China patents face important challenges

While state-backed blockchain innovators face roadblocks from cautious abroad governments, the Chinese patent system additionally has its personal points to sort out. While solely 19% of Chinese patent functions are accepted, within the U.S. that determine is a far larger 26%. In South Korea, patent approval is a large 45%.

This in keeping with a 2021 report by PatSnap which examined blockchain innovation and its patents, and from a Chinese perspective, not all of its findings had been for the great. The report in contrast and contrasted patents from nations from all over the world together with China, The U.S. and South Korea. 

As of Oct. 2021, PatSnap discovered there have been 55,000 international blockchain patents. 

The report (auto translated from the Chinese) was subtly vital in that it stated, “China is at present the nation with the most important variety of patent functions on this discipline, with about 33,000 items, accounting for about 63.2%, however the high quality of patents nonetheless has room for improvement.”

That high quality situation is one in every of main significance, and it tarnishes a number of the sheen from China’s blockchain figures. 

Citations wanted

One of the methods by which the standard of a patent will be measured is within the variety of citations it receives. Citations could point out {that a} particular patent or expertise led to additional helpful innovation.

With Chinese innovators submitting extra patents than anybody else, it could be logical to imagine that Chinese patents would even have extra citations than anybody else, as every innovation builds upon one other. In reality, exactly the alternative is true.

In the class of essentially the most profitable patents within the trade, measured as these that are cited over 100 times or more, U.S. innovators are 13 instances extra profitable than China.

As PatSnap goes on to say, “it’s value noting that 1.3% of the patents within the United States have been cited greater than 100 instances, indicating that the related technological improvements are very excessive and influential, and are usually acknowledged by the trade. Only 0.1% of blockchain patents in China are cited greater than 100 instances.”

Overall the information recommend that patents within the U.S. and South Korea, though far much less voluminous, are of a greater general high quality.

In quick, generally high quality actually is healthier than amount.

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