PTO Documents Surge in ‘Suspect’ Chinese IP Applications

Patents and trademarks motivated by “non-market factors,” such as subsidies, government mandates, “bad-faith” applications and “defensive countermeasures," can “undermine the reliability” of intellectual property “registries,” reported the Patent and Trademark Office Wednesday. The growing number of “suspect” applications filed in the U.S. from China prompted the agency to “study the reasons for this development.” Though PTO knows of no “public source information” showing what proportion of IP applications in China are motivated by subsidies, “it has observed the impact of Chinese subsidies granted for foreign trademark applications.” After Shenzhen and other cities began offering subsidies for overseas trademark applications, PTO experienced a “surge” in fraudulent applications originating in China, it said. Irregularities can abound, including narrowing the scope of “protections” available to IP owners “engaged in the legitimate sale of goods and services,” it said. “Absent consideration of the role of non-market factors, cross-border comparisons based on the raw number of trademark and patent applications risk overstating brand creation and innovation activity in China.” PTO offered no recommended remedies.