Shengju Deng, Wei Yin, Yongfu Sun

GuoZhi Patent Warning Consulting Center, China

Jun Pei

Patent Examination Cooperation Center of the Patent Office, SIPO, China

Introduction

With the strategy of innovation-driven development and the objective of being a powerful country of intellectual property being presented, the intellectual property industry has exhibited a good trend of prosperity and development. The daily chemical industry is an important component of the national economy and is closely related to people’s daily life. With the development of the economy and the rising of people’s consumption level, the daily chemical market has a huge demand potential and broad development prospect. Attaching importance to the investigation and analysis of the situations of the intellectual property of daily chemical products, especially the statistics and analysis of patent application situations, is of important guiding significance for maintaining the healthy and orderly development of the daily chemical industry in China. In this paper, the present situation of patents in the cosmetics field was analyzed, and the features of patent protection in the daily chemical industry were summarized. In addition,the patent situation distribution of Procter & Gamble, the leading enterprise in the industry, was analyzed and some suggestions for patent protection in the daily chemical industry were presented.

Present situation of development of and patent protection in daily chemical industry

Present situation of development of daily chemical industry

In view of patents, the products in the daily chemical industry mainly include the following six categories: cosmetics, cleaning products, oral care products, fragrances and deodorants, insect terminators and others. The daily chemical industry, as an industry of fast-moving consumer goods, has great consumption potential, with the industry scale expanding continuously; however, due to increasingly strong market competition, the gross profit decreases gradually and the function of brand marketing becomes more important.

The patent protection in the daily chemical industry is closely related to the issue of China’s national policies.In 2010, China started to implement the China national mandatory standard: Instruction for Use of Consumer Products—General Labeling for Cosmetics, so the cosmetics entered an era of “all-component identification”.The issue of this policy drives the transition of product protection mode from the original technical secret protection mode to patent protection mode in the daily chemical industry.

Present situation of patent protection in daily chemical industry

The contents of patent protection in the daily chemical industry include: (1) the contents of daily chemical products, e.g., formulation, preparation process, and application; as the technique primarily relates to chemical substances preparation method and applications, the main protection type is invention patents; (2) auxiliaries for daily chemical products, e.g., containers, auxiliary tools and related equipment; the technique relates to specific structures, so the main protection types are invention patents and utility models patents; (3) outer packaging design for daily chemical products, e.g., outer packaging structure design; the main protection types are utility models patents and appearance design patents.

Patent analysis refers to the following: information retrieval, data collection, information extraction and information processing, for the analyzed technical theme; fully mining technical, economic and competitive intelligence from the patent information, to facilitate the public’s use of the intelligence to drive innovation and development;and the analysis contents primarily include the present situations and development trends of patent protection technologies, the competition markets and the main competitors of patent technologies, and the distribution of main patent technologies.

The distribution of patent application quantities in China for cosmetics, cleaning products and toothpastes in the daily chemical industry is given in Table 1. It can be seen from Table 1, the general application quantity submitted in mainland China takes first place; overseas applicants primarily occupy the Chinese market by submitting applications abroad through the PCT-based way and the Paris Convention-based way. It is suggested that the Chinese domestic innovativeentities should implement overseas patent layout strategy of innovative technologies through using the PCT and the Paris Convention to seize the overseas markets.

Table 1. Distribution of patent application quantities in China for cosmetics, cleaning products and toothpasts

Present situation of cosmetics patent protection in China

Analysis of cosmetics patent application trends in China over the years

Cosmetics mainly include beauty cosmetics, cleaning cosmetics, skin care products and hair care products. The trends of cosmetics patent application in China over the years are shown in Figure 1. As can be seen from Figure 1,aたer the year of 2000, overseas competitors had taken the lead in laying out patents in China through using PCT and Paris Convention, to seize the Chinese market; in 2010, aたer China started to implement the China national mandatory standard Instruction–Use of Consumer Products - General Labeling for Cosmetics, the Chinese domestic innovative entities largely used patents protection to protect their innovative achievements, whereas the overseas competitors did not significantly increase the quantities of patents portfolio.

Figure1. Patent application trend for cosmetics in China over the years

Analysis of distribution of patent application methods for cosmetics in China

In the cosmetics field, the application quantity in mainland China accounts for over 70%, whereas the application quantity through using PCT and Paris Convention accounts for less than 30%; however, the eあective authorization rate of PCT applications and Paris Convention applications is far higher than that of general applications,indicating that the quality of the patents authorized in China and applied by overseas competitors is far higher than that of the patents applied by Chinese domestic innovative entities (shown in Figure 2). This is worth learning and referencing for Chinese domestic innovative entities.

Figure 2. Distribution of patent application types for cosmetics in China

Analysis of countries and innovative entities attaching importance to the Chinese market in cosmetics field

The innovative entities in the USA, Japan, France,Germany, Korea, and UK attach great importance to the Chinese market (shown in Figure 3). The patent application ranking of Chinese domestic innovative entities shows that the top 3 entities are Qingdao Sanding,Aesthetic and Guangzhou Damekiss. But the Chinese domestic innovative entities have a low concentration of patent application, and it doesn't match with their actual industrial positions. The overseas innovative entities(Procter & Gamble, Unilever, etc.) gain the Chinese market mostly through using the PCT, whereas, Loreal,Kao and Amore, etc. gain the Chinese market through using the PCT and Paris Convention.

Figure 3. Analysis of countries attaching importance to Chinese market in cosmetics field

Distribution of patent technologies in China by domestic and overseas innovative entities

The analysis results of patent technologies in China by domestic and overseas innovative entities are given in Figure 4. The patent protection for the overseas innovative entities mainly concentrated in five aspects, including heterocyclic organic compounds added in cosmetics(A61K8/49), plant extracts (A61K8/97), alcohol organic compounds (A61K8/34), C-C unsaturated polysaccharides(A61K8/81), and cosmetics with special physical shape as modified characteristic (A61K8/02). The patent protection for the Chinese domestic innovative entities mainly concentrated in three aspects, including plant extracts added in cosmetics (A61K8/97), animal extracts(A61K8/98), and microorganism extracts (A61K8/99).

Figure 4. Distribution of patent technologies in China applied by overseas applicants (a) and domestic applicants (b)

Brief summary

The quantity of patent application of cosmetics in China is near 20,000, the concentration of patent protection is relatively high. After the year of 2000, overseas innovative entities have filed patents in China through using PCT and Paris Convention, to seize the Chinese market. After 2008,the patent application quantity has exhibited explosive growth, but the patents of domestic applicants have great differences from those of overseas applicants. Overseas innovative entities, mainly including overseas major companies (e.g., P&G, Unilever, etc.), have got many patents in China. It gave warning to domestic enterprises that when designing patent strategy, they should effectively use PCT application and Paris Convention application to develop overseas patent strategy. Moreover,the overseas patent technologies focus on protecting the use of synthetic organic compounds, and the domestic patent technologies focus on protecting the use of animal,plant and microorganism extracts, which is worth learning and referencing for domestic daily chemical enterprises.

Analysis of patent situation of P&G

P&G was established in 1837. After over 100 years of development, it has become one of the largest daily goods production enterprises in the world, with 127,000 employees and 6 major research and development centers,with factories and branch companies in more than 80 countries, and with more than 300 best-selling brands in over 160 countries and regions. In this paper, Procter &Gamble was selected as the representative of transnational corporations in daily chemical industry, and its annual distribution status of China patent application quantities and types were studied.

Application trends over the years

P&G started to file patents to the State Intellectual Property Office of P.R.C in 1985, and the number of its annual applications increased constantly. In 1999, it started to file patents in China; afterwards, the number of annual applications reached 200–350, far higher than the domestic and overseas enterprises (shown in Figure 5).

Figure 5. Patent application trend of P&G in China

Although P&G has applied for many patents, it can be seen from the legal status that over 50% of patents have been invalid (shown in Figure 6). Invalid patents include the patents which are regarded as withdrawn after issuing, those revoked by the examiner during patent examination, and those declared invalid after patent authorization, and all of these invalid patents can be referenced and used by Chinese domestic enterprises. In addition, analysis of patent application years shows that the valid patents of P&G are mostly concentrated in the years of 2005–2008, so each of the domestic enterprises,if having product technologies relatively close to those of P&G, can investigate through patent analysis whether the products of P&G during 2005–2008 were the same as or similar to its ones, to avoid the risk of violation of intellectual property.

Figure 6. Legal status of patents applied for by P&G

Distribution of main applicants

P&G lays emphasis not only on patent protection, but also on cooperative innovation of technologies. As can be seen from the status of patent applicants (shown in Table 2), it has applied for more than 50 patents jointly with 12 partners in different branches. The domestic enterprises can work with colleges or universities, research and develop some new technologies, to improve the efficiency of innovation.

Table 2. Partners of P&G for patent application

Distribution of patent technologies

Through the analysis of the distribution status of technology fields of P&G for patent application in China(shown in Figure 7), the patents applied for in China by P&G relate to tens of classes under International Patent Classification (IPC), and these fields include cosmetics,personal cleaning and care products, infant care products,feminine hygiene products, medical devices, foods, and packaging. The fields of P&G with the largest patent application quantities in China are the traditional dominant fields of the company, including cosmetics, medical and health care products, and cleaning products, and this fully reflects that daily chemical products are main products of P&G sold on the Chinese market. Popular brands like Pantene, Rejoice, Head & Shoulders, Vidal Sassoon,Clairol, Safeguard, Olay, Crest, Tide, and Ariel, etc, which are commonly seen on the market. It can be seen that P&G attaches great importance to innovation and intellectual property protection in its traditional dominant fields.

Figure 7. Distribution of main patent technologies of P&G

Brief summary

P&G, as the leader of daily chemical industry, has very large application quantity of China patents layout; however,the invalid patent technologies, accounting for more than 50% of its patents, have entered the public knowledge field,and less than 30% of its patents are still under protection.While laying emphasis on patent protection, P&G pays attention to cooperating with over ten enterprises or institutions for research and development; and its patent technologies primarily relate to cosmetics, medical and health care products, cleaning products, etc.

Conclusions and suggestions

In summary, the present situation of patent protection in daily chemical industry of China exhibits the following features: (1) with the promulgation of China national policies, the patent protection for innovative achievements has becomes more and more prominent in daily chemical industry; (2) the cosmetics, cleaning products, and toothpastes have high patent concentration, and are key points for which the overseas giants lay out their patents;(3) the overseas giants, including P&G, Laya, Unilever,Kao, Shiseido, and Amore, protect their innovative achievement using intellectual property, and accordingly maintain their market monopoly; (4) domestic enterprises have relatively low patent concentration, which is not favorable for long-term development and industrial transformation and upgrading; their investment in research and development and output from patents increase constantly, but they have low patent authorization ratio and do not have overall patent layout planning.

Thus it can be seen that as China started to implement the national intellectual property strategy, the Chinese domestic enterprises have gradually started to attach importance to protection of intellectual property.Nevertheless, compared with transnational corporations,e.g., P&G, the domestic daily chemical enterprises still have evident differences in respect of the patent application quantity and quality. Therefore, it is suggested that the domestic enterprises should fully utilize the patent intelligence and information to drive cooperative innovation and utilize intellectual property to maintain the dominant position in market competition, which is of very important significance for healthy and sustainable development of daily chemical industry.