How Prisoners in China Get Out of Jail Early With Patents

By Ashley Feinberg on at

China absolutely dominates the rest of the world when it comes to the number of patents it produces, thanks in part to a system of government rewards that encourage inventors with everything from cash to early release from prison. Wait, what?

The unusual policy came to light last month when Beijing Youth Daily published the results of an undercover investigation into an emerging industry of patent application businesses that cater to an unusual market: prisoners. Specifically, wealthy prisoners can pay these small businesses anywhere from £500 to £5,000 to have inventors' ideas patented as their own -- everything from cigarette holders to geothermal energy innovations.

Why? Because the Chinese government offers sentence reductions for "important technical innovations," which could be demonstrated by obtaining a patent for an invention. According to the paper, prisoners can essentially buy a path towards early release.

The Beijing Youth Daily is published by a youth group run by the Communist party, and unsurprisingly, its report focused on needling incarcerated corrupt former officials. One former health bureau secretary in jail for accepting bribes, it said, has filed 11 patents since getting locked up. Probably the most famous jailed official Nan Yong (who ran the national football league before he was busted for, yep, corruption) has patented many inventions, including a smartphone holder.

So corrupt officials continued to be seemingly corrupt, even in jail. No big surprise there. But I was curious about the law. Was it turning jails into hotbeds of amateur inventors? Are there other unusual laws that aim to boost China's reputation as an innovation powerhouse?

Carl Minzner, a Fordham professor who specialises in the Chinese legal system, explains that the law stems from Section 78 of Chinese criminal law, which describes a few reasons why sentences may be reduced. One is helping prevent crime and saving lives. Another is "inventions or important technical innovations," which can include patented technologies.

But as Minzner was quick to point out, China definitely isn't leaning on its prisons for its technical innovation. "True, China is exhibiting a tendency to use administrative rewards to prompt innovation," he added, but the recent exposé on prisoners buying patents definitely isn't a good or indicative example of it.

Patents numbers are exploding in China, even outside of this criminal justice loophole. In 2013 (the most recent year for which there are stats) there were more than 600,000 patents published in China. In 2003, there were just 40,000. Compare that to 302,948 applications granted in the US in 2013, for instance, and you'll get a sense for the scale of the boom.

The director of the US Patent and Trademark Office described the number as "mind-blowing" in a New York Times article about the trend a few years ago, in part thanks to incentives that include "cash bonuses, better housing for individual filers and tax breaks for companies that are prolific patent producers." In December, Thomson Reuters released a report showing that the strategy is working in spades.

But do more patents necessarily mean more innovation? These policies have had unintended consequences, like an influx of patents that are filed just for the incentives or to block competition. It's unclear how many of these patents actually end up leading to real-world innovation, since there's no data on how they are ultimately used. And since the government also rewards inventors for filing patents in other countries, the problem is seemingly spreading to places like Australia, which has a relatively lax policy on granting patents and has seen a major influx of "junk" patents seemingly filed just for the subsidy.

So it's unclear if the big push to file more patents will ultimately lead to more great ideas -- especially when, for example, the ideas are being bought to pay for an early release. In the end, ideas -- the spark that start the fire of any patent -- are wily and illusive objects of imagination; fascinating as it is to see how governments go about trying to incentivise the inception of them. And who knows? Maybe the next big technology will come from a prison.