In the intellectual property race, China is catching up

Last year saw the publication of 1,045,283 patent documents with the International Patent Classification (IPC) code corresponding to chemistry, across 174 international territories. But the US Patent and Trademark Office (USPTO) contributed only 7.6% of those chemistry patent publications, stemming from 77,928 unique patent applications. Moreover, almost half the US chemistry patent publications can be traced to a parent application first filed in a non-US territory, suggesting that the entity filing for protection of the chemistry invention was based outside the US.

Instead, it was China that dominated global patent publications in 2025, including around half of all chemistry patent publications. Of these half-a-million Chinese chemistry patent publications, over 92% were “homegrown” and can be traced back to a parent case first filed in China. So what has led to the emergence of China as a leader in chemistry innovation, at least in terms of patent metrics?

The US had a head start. Broadly speaking, the chemical industry was one of the first enterprises established in the US following European colonization. The southern states produced pitch and turpentine from pine trees and cultivated natural dyes such as indigo.

The 20th century saw a golden age of chemical innovation that brought dyestuffs, pharmaceuticals, and new polymeric materials such as Stephanie Kwolek’s Kevlar and Wallace Carothers’s nylon. The electronics revolution beginning in the mid-1970s demanded a plethora of new materials to support the field of information technology.

From steel and concrete to intangible assets

Worldwide, chemistry patent publications were relatively low in number during the 1950s, ’60s, and ’70s, but they kicked up a notch in the 1980s. This increase partly reflected the growing realization that corporate value is dramatically influenced by intellectual property (IP)—that IP can act as a barrier to entry for competitors.

In 1975, company value was based mainly on physical assets, but by the late 1980s, valuations had shifted to being predominantly attributed to intangible assets, including patents, brands, copyrights, employee goodwill, know-how, and business information. For example, when Philip Morris (now Altria Group) purchased Kraft Foods for $13.1 billion in 1988, Kraft’s tangible assets were valued at $1.3 billion. The remaining $11.8 billion—around 90% of the firm’s value—was considered to include brand equity, patents, business practices, and the likelihood of future innovation by employees.

Given the shift in perceived value, it made sense for companies to encourage corporate employees to increase intangible assets by filing more patents. At the same time, the 1980 Bayh-Dole Act allowed US universities and other research institutions to derive value from their IP. University technology-transfer departments were set up, and faculty were encouraged to file patents on discoveries that their universities could then license to help fund further research.

These factors spurred an increase in US patent publication across all industries, with a hockey-stick growth curve from just 66,000 in 1980 to 802,000 in 2020. The total number of US patent publications has fluctuated between 770,000 and 803,000 ever since.

Patent activity in the US chemical sector peaked during the mid-1970s, when roughly 23% of all US patent publications related to chemistry, but the sector’s share has been slowly declining ever since. In 2025 just a little over 10% of all US patent publications related to some form of chemistry.

China’s multidecade plan for IP dominance

In 2025 the Chinese patent office published 5,107,272 patent documents in total. That’s 57.5% of all patent documents published around the world and more than six times the USPTO’s contribution of 771,447 documents of all classifications.

The US Chamber of Commerce benchmarks national patent systems of some 50 countries representing more than 90% of the world’s economy. For each country, the chamber evaluates around 50 metrics of economic importance to the use, application, and enforcement of IP rights. The chamber summarizes the findings to provide the International IP Index, a national IP strength index for each country, annually. The metrics include, for instance, enforcement success against patent infringers and the likelihood that a given patent may be found invalid.

In 2025 the US patent system was rated number 1 globally, closely followed by the UK and Europe.

China’s patent office was rated number 24, up from number 28 in 2020. In 1980, the year the China National Intellectual Property Administration (formerly the Patent Office of the People’s Republic of China) was commissioned, China was not even on the list.

Perhaps cherry-picking the best aspects of other countries’ IP systems, China emulated Germany by instituting the use of utility-model patents beginning in 1985, alongside regular utility patents. Utility models are like mini-patents—narrow and very specific to the product being commercialized. They are usually less expensive to file and prosecute and possibly easier to enforce than utility patents.

The fact of the matter is that China has a top-down approach to innovation policy. The government decides what types of technology projects get funding and are emphasized in academia and industry through 5-year plans. The US, on the other hand, has a bottom-up system that is less prescriptive but that leaves room for the fostering of new-to-the-world innovation and unexpected technical breakthroughs.

There’s an additional layer to China’s innovation policy: long-term planning. The country’s 11th 5-year plan (2006–2010) may have been the first to include an emphasis on building IP strength as part of a broader plan to transform China from a manufacturing- to a knowledge-based economy. Key to this plan were systems that incentivized the Chinese population to participate in IP education, file and create IP, and file patents internationally.

The rise of China as a creation-based economy

I talked to a China-born industrial designer, August Lin, who filed his first patent, on a new design for a whiteboard eraser, at age 14. In Lin’s case, the project was part of a special-topics class in school, but it’s now quite common for young people to file patents in China. This activity is exemplary of a powerful aspect of Chinese innovation policy: the establishment of patent literacy from a young age.

In a 2018 Zoom presentation to the Georgia Intellectual Property Alliance, I heard Jeff Lindsay, then head of IP at Asia Pulp and Paper (APP Group), explain his point of view from his Shanghai office. He described school, city, provincial, and national patent-searching competitions for kindergarten through high school; daily newspapers reporting on IP matters; and more than one Chinese national newspaper with a pull-out section dedicated solely to IP.

Indeed, an article published late last year by the China Daily describes nationwide efforts to teach theoretical and practical IP skills. According to the article, one school’s deputy principal, Dang Jiwu, commented that his school had abandoned the traditional method of instilling theories in favor of incorporating IP elements into every subject and aspect of teaching.

Dang said the essence of IP education lies in practical applications, such as an electronic makerspace workshop and a Lego robotics laboratory, both spaces equipped with patent-search-database terminals, along with laser cutters, 3D printers, and other tools that students can use to invent.

Dang’s school is far from unique in its approach. According to the China Daily article, more than 17,000 elementary and secondary school teachers have received training in IP education so far.

China’s National IP Publicity Week in April 2025 was intended to further popularize IP knowledge building and foster a nationwide environment of creativity and innovation. Hainan Province livestreamed IP-focused video content, while Shandong Province organized IP-themed debates and mock IP court trials. The educational programs extended beyond patents to include trademarks and copyrights, notably teaching elementary school children how to spot counterfeit goods and pirated books.

Incentivizing the general public to patent

The 11th 5-year plan marked a turning point for China by financially rewarding citizens to file patents. Anyone willing to write an invention patent application and file it was rewarded with cash, according to an article by the IP research firm Copperpod IP. If the patent application was issued, the filer got additional cash. If the patent was filed internationally, even more was provided. As a result, China filed a total of 1.68 million patents in 2023, some 46% of the world’s patent applications, up from around half a million in 2011.

China is also growing as a filer of international patents. According to a World Intellectual Property Organization report, China inched ahead of the US as the top filer through the WIPO clearing house, filing 58,990 patent applications versus 58,740 from the US. Perhaps this is due to the generous rewards provided to China-based inventors filing non-Chinese patents, reportedly around $14,000 per WIPO application. Copperpod says the early incentives were “innovation training wheels” for the Chinese population and “patent boot camp” for new patent attorneys, examiners, and judges.

In September 2021 the Chinese Central Committee released a strategic plan called “The Outline of Building an Intellectual Property Rights (IPR) Powerhouse (2021-2035),” intended to help transform China from a major IP creator into a global IP powerhouse by 2035. It aimed to achieve results including 12 high-value patents per 10,000 capita by 2025. The China National Intellectual Property Administration reports that this goal was surpassed with 16 high-value patents per 10,000 people.

This focused, multidecade effort by China’s leaders has integrated IP and invention in the national business culture. Their plan is beginning to pay dividends. Although patent-filing subsidies have been eliminated as of this year, Copperpod points out that the strategy of filing everything—including non–commercially viable inventions—contributed to the dominance we see today by instilling a patent culture in the population.

The surge of patent activity forced IP managers to defend, bargain, and litigate at increased rates, thereby strengthening their corporate IP muscles. For inventors, the surge in activity provides blazes that illuminate the technical trail: researchers can now learn from past patent filings about inventions that were unsuccessful.

A country shifts from quantity to quality

Technology transfer is one metric of patent value. Of the close to 80,000 US chemistry patent publications published in 2025, over 1,000 (1.4%) are referenced in publicly disclosed license agreements, providing evidence of commercially relevant and valuable IP rights being traded as fungible assets. China is behind in quality but not by much: of the half-a-million-plus Chinese chemistry patent publications in 2025, around 2,000 (0.8%) are included within publicly disclosed license agreements, according to research by my firm, Lyco Works Incorporated.

Experienced patent professionals—including patent agents, litigators, attorneys, examiners, and judges—will be key to China’s ability to continue this strengthening trend. In a paper published last year, researchers assessed the progress of Chinese initiatives directed at increasing patent literacy and IP training within 30 Chinese universities over a 5-year period. The researchers concluded that while improvements in consistency were needed across educational platforms, IP information literacy had increased appreciably.

Around a quarter of the universities studied included compulsory IP-education classes. University students accessed patent databases in libraries using both open-access databases and paid database subscriptions.

China’s remarkable journey from not even having a patent office in 1980 to its position today speaks to a changing world. With IP literacy education and practice firmly embedded in China’s citizens from a young age, and as professionals gain more experience, the few remaining barriers to the consistent generation of high-value, commercially and technologically relevant patents will be overcome.

The Chinese patent system, while not ranked in the top 20 today, has steadily improved. The only thing holding it back is the brief experience of China’s examiners, patent attorneys, and judicial system. This experience will develop over time.

The US patent system remains one of the strongest and most robust by many metrics. For now, the US has the advantage: a patent system established almost 200 years ago, and generations of patent attorneys, examiners, and judges with historical precedence and professional mentoring. But China has made incredible progress over the past 45 years. It is closing the gap and may soon be nipping at our heals for the top spot.

Jason Lye is recognized by IAM magazine as a top patent strategist. Prior to launching Lyco Works Incorporated, Jason led teams at Newell Brands (formally Newell Rubbermaid) and Kimberly-Clark Worldwide in buying and selling patented technology.

Views expressed are those of the author and not necessarily those of C&EN or ACS.