Utility Model Patent Regime ‘Strength’ and Technological Development : Experiences of China and Other East Asian Latecomers

This paper analyzes how strategic calibration of utility model patent regimes – which provide a type of patent right that is distinct from invention patents and is far less studied in the literature – over time is intended to facilitate technological development. To do this, the paper develops what appear to be the first indexes of utility model patent regime “strength” (divided into “strictness” and “appropriability” indexes), which it tabulates for mainland China, Japan, South Korea, and Taiwan per every year from the time of inception of their laws governing utility models (the first of which was in 1905) till 2016. It then analyzes these indexes via fixed effects regressions and case studies. The results show that East Asian latecomers instituted utility model patent regimes that were less strict and offered less appropriability during earlier stages of economic catch-up, likely in order to facilitate technological learning. Subsequently, the strictness of the regimes was increased as knowledge accumulation and, to some extent, technological capabilities increased and, in mainland China's case especially, as patent quality problems were experienced. It is also found that increasing the strictness of utility model patent regimes may reduce patenting in the short-term, but not the long-term. Six propositions are formulated, including the overall conclusion that successful latecomers seem to have pursued a dynamic catch-up strategy of transitioning from imitative to more sophisticated technological development by increasing both the strictness and appropriability-strength of their utility model patent regimes in conjunction with increasing knowledge accumulation and, to some extent, technological capabilities. It is suggested that mainland China might benefit from further increasing the strictness of its utility model patent regime in the future