ACCELLERATING INNOVATION WITH IPROB WILLOWSVICE PRESIDENT, THOMSON REUTERSCHINA PATENT INFORMATION FAIRSEPTEMBER X, 2011

AGENDA

• MARKET FACTORS

• IP LANDSCAPE

• CHINESE PATENTING

• INDUSTRY EXAMPLES

2

MARKET FACTORS

MARKET FACTORS DRIVING IP

• Many economies struggling

• Intangible assets valued higherthan tangible ones

• Patents becoming productsunto themselves

• Many organizations are flexing IP muscles to quell competition and infringement suits

• IP collaboration a must

4

IP LANDSCAPE

SHIFTING IP LANDSCAPE

6

Apple injunction keeps Samsung Tab off shelves

A patent fever over smartphones

Google buys more than 1000 patents from IBM

Nortel completes $4.5B sale of patent portfolio

Sony, LG Electronics settle bitter patent dispute

The age of disablement: the great patent bubble

Kodak considers sale of digital-photo patents

CHINESE IP LANDSCAPE

7

Interdigital Inc. sues China’s Huawei and ZTA for patent infringement

China today: Counterfeits “R” Us

China takes knockoffs to a new level

How Google deal can help Motorola in China

CHINESE PATENTING

CHINA’S INCREASE IN INNOVATION

• China is third-largest patent office in the world – By invention patent applications

• Published applications increased16.7% per year from 2006 to 2010

• China’s is 8th in its global ranking of citations on scientific papers

• China ranks 29th by the Global Innovation Index

• China invested 457 billion yuan (US$65.8 billion) in R&D in 2008, 1.52% of its GDP

9

EVOLUTION OF CHINA’S INNOVATION

Manufacturing Economy Made in China Knowledge

EconomyDesigned in

China

10

China’s 12th Five Year Strategic Plan

1998 2004 2010 2016

PATENT FILINGS (2006 – 2010)

11

PROJECTED FILINGS (2011 – 2015)

12

DOMESTIC FILINGS (2006 – 2010)

13

DOMESTIC v. FOREIGN FILINGS IN CHINA

14

PATENT FILINGS IN CHINA BY INDUSTRY

15

Electri

cal m

achin

ery,

app

arat

us, e

nerg

y

Digita

l com

mun

icatio

ns

Compu

ter t

echn

ology

Mea

sure

men

t ins

trum

ents

Contro

l inst

rum

ents

Mac

rom

olecu

lar c

hem

istry

, poly

mer

s

Organ

ic fin

e ch

emist

ry

Biotec

hnolo

gy

Pharm

aceu

ticals

Basic

mat

erial

s ch

emist

ry

Food

chem

istry

Chem

ical e

ngine

ering

Mec

hanic

al en

ginee

ring

mac

hine

tools

0

5,000

10,000

15,000

20,000

25,000

2006

2010

AUTOMOTIVEINDUSTRYREVIEW

AUTOMOTIVE INNOVATION IN CHINA - ALL

17

Calendar year 2010

TOP 5 FOREIGN FILERS1. GENERAL

MOTORS2. HONDA3. FORD4. TOYOTA5. HYUNDAI

AUTOMOTIVE INNOVATIONS PROTECTED

18

AUTOMOTIVE INNOVATION IN CHINA – DOMESTIC ONLY

19Calendar year 2010

AUTOMOTIVE INNOVATIONS PROTECTED

20

PHARMACEUTICALINDUSTRY REVIEW

GLOBAL PHARMACEUTICAL INNOVATION

22

CN

US

JP

KR

EP

RU

FR

GB

DE

IN

CHINESE PHARMACEUTICAL INNOVATION

23

YEAR ALL PHARMA

TRADITIONAL MEDICINE

NON-TRADITIONAL

2006 10,799 6,967 3,832

2007 12,658 8,513 4,145

2008 12,246 7,820 4,426

2009 12,833 7,798 5,035

2010 14,005 8,111 5,894

CHINESE PHARMACEUTICAL INNOVATION

24

BEIJING YIXINTANG INST MED RES

UNIV ZHEJIANG

BJ GUANWUZHOU BIOL SCI INST

TIANJIN SHENGJI GROUP CO LTD

UNIV FUDAN

TIANJIN TASLY PHARMACEUTICAL

UNIV CHINA PHARMA

YU NEIXUN

UNIV PLA 2ND MILITARY MEDICAL

UNIV SHENYANG PHARMACEUTICAL

0 100 200 300 400 500 600 700

2006 - 2010

SUMMARY

SUMMARY

• China is rich in innovation, however needs to take the protection of IP rights more seriously

• Counterfeiters and infringers must be dealt with swiftly to entice non-Chinese companies to enter the Chinese market

• To be viewed as a truly innovative nation, Chinese institutions must look to protect and bring its inventions to markets outside of China

• Patent protection and enforcement holds the key to global innovation success for China

26

ACCELERATING INNOVATION WITH IP

rob.willows@thomsonreuters.com