Effectiveness of Intellectual Property Protection: Survey Evidence from China

This paper examines Chinese pesticide firms’ use and perceptions of various means of intellectual property (IP) protection in protecting their innovations, using a unique dataset from 97 pesticide firms surveyed in 2008. These firms rate Chinese patents as quite effective in protecting their IP from infringement, although 70 percent of them state that improved enforcement is needed. Those firms that have been granted patents and those that claim their patents have been infringed upon both give lower ratings to the perceived effectiveness of patents. Trademarks are rated as less effective than patents, but firms that have had experience with patenting and infringement of patents tend to rate trademarks as more effective than those firms that do not have direct experience with the patent system. General government policies to encourage increased privatization, more private R&D, and higher education are associated with more faith in IP, but policies to strengthen IP by promoting mandatory IP training and the development of specialized IP divisions in the firms do not influence perceptions of IP effectiveness. We conclude that if the Chinese government wants to encourage innovation using IP protection, it must focus on improving the enforcement of patents.