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(News Focus) China aiming to become patent powerhouse
By Kim Young-gyo
HONG KONG, Sept. 15 (Yonhap) -- China, the world's second-largest economy, is pushing to become a global patent powerhouse by investing more in research and development under a state plan to nurture the sector as a future growth engine.

   Top Chinese officials, including Premier Wen Jiabao, have emphasized that China will shift its economic policy to promote sustainable growth by focusing more on "created in China" products rather than "made in China" goods.

   "We will upgrade the traditional industries with advanced technologies and nurture a number of internationally competitive enterprises with their own intellectual property and well-known brands," Wen said at an international economic forum hosted by the Geneva-based World Economic Forum (WEF) this week at the northeastern Chinese city of Tianjin.

   Wen said the Chinese government will develop new pillar industries in the country and provide stronger policy support so that it can "spur economic development through innovation."

   Under the national policy of Indigenous Innovation, or what the Chinese call "zizhu chuangxin," China aims to expand its spending on research and development to 2.5 percent of the gross domestic product (GDP) by 2020 from 1.3 percent in 2005.

   Despite the global economic crisis, the State Intellectual Property Office, China's patent office, has become one of the few government offices in China to win a budget increase.

   The office's annual budget jumped 15 percent last year, twice as high as the average of 7 percent seen in other government departments.

   Reflecting Beijing's emphasis on patents, the country has seen a jump in applicants seeking to protect their own technologies and other intellectual property rights.

   A total of some 976,000 applications for new patents were submitted to the office last year, with a daily average of 2,700, rising 17.7 percent from the previous year. The number of patent applications filed by Chinese companies overseas doubled in 2009 to 8,000 from 2007, according to government statistics.

   The rising interest in patents across China is driven by the Beijing government itself, experts said.

   "The Chinese government continued promoting corporate research and development by building technology clusters nationwide last year, though the world economy was shrinking," said Wang Zhengyang, the head-lawyer at Beijing-based law firm JunZeJun. "The government even helped private companies pay expenses for filing patent applications."

   Amid China's push for patent rights, Chinese companies are aggressively coping with alleged violations of their patents by multinationals.

   Fangda Group, headquartered in the southern city of Shenzhen, recently filed a lawsuit against a Chinese subsidiary of Japan's Panasonic Group, claiming the latter stole its core technology of a metro barrier door and obtained illicit gains.

   France's Schneider Electric Ltd., one of the world's top 500 enterprises, last year reached an agreement to pay 157 million yuan (US$23 million) in compensation, so far the highest amount for a patent infringement case in China, after being sued by Zhenjiang Chint Group Corp., which has domestic low-voltage electrical appliances leading enterprises.

   Samsung Electronics Co., the world's second-largest handset maker, is reportedly in the process of appealing a Chinese court ruling that it has violated a patent owned by Hangzhou-based Holley Communications.

   Experts urge South Korean companies to step up efforts to keep close tabs on patent-related issues in China and prevent legal disputes before they take place.

   "As the Chinese companies have started to develop advanced technologies on their own, South Korean companies need to pay more attention on what is going on in the Chinese market," said Yu Byung-deok, an official at South Korea's Intellectual Property Office. "At times, there can be an overlap between technologies developed in South Korea and China."