With the rapid development of many small and medium enterprises, innovation and intellectual property has greatly increased and gained enormous importance. Since the onset of the financial crisis, many export-oriented enterprises without intellectual property (IP) closed, while those with independent IP were less affected and some experienced growth. To effectively respond to the economic calamity and help SMEs survive, the Beijing Intellectual Property Office has created and implemented new ideas for IP management and launched the country’s first IP Trusteeship Project in March 2008.

 

 

At a press conference held on April 22, a spokesperson from the Beijing Intellectual Property Office Fu Xiaohui commented: “SMEs in Beijing are still in a harsh environment;so government should adopt innovative ways to support these enterprises. As far as the Intellectual Property Office is concerned, we will run a trusteeship mechanism for innovative enterprises in Beijing.” Fu Xiaohui added, “SMEs may be small in size, but they are usually more dynamic, innovative and powerful.”

 

For various reasons, SMEs still own fewer intellectual properties, and an IP system is yet to be wildly established. “China has a considerable number of small and medium enterprises. New small businesses, in particular, have advanced new technologies, but lack information, funding and professional IP management personnel”, stated Ma Hongya, Chief of the Industry Promotion Division under the Beijing Intellectual Property Office. Currently, more than 65% of invention patents and more than 80% of new products come from small and medium enterprises, while 80.2% of SMEs do not have an intellectual property sector and 88.5% are without IP transactions.

 

“Even the high-tech SMEs cannot be optimistic about intellectual property.” Ma Hongya explained in detail: most companies do not have special departments, staff or input in intellectual property; most technologies are imitation rather than innovation. Many enterprise technologies are ordinary within an industry, which is of not good for the rapid development of enterprises. Moreover, these enterprises know little about IP protection. Without IP awareness and protection, they may infringe intentionally or unintentionally on the rights of others.

 

IP trusteeship refers to a service method and management approach. IP holders entrust intangible IP assets to a certain social service agency, which has been granted rights by administrative authority and has limited administrative litigation ability- The Intellectual Property Trust Center, exercises legal and administrative control. Furthermore, it will consider the different needs of enterprises and offers packaged services including; patent mining, patent infringement warning, patent protection, anti-counterfeiting procedures, etc., so that overall IP protection is enhanced. Thus, IP trusteeship is an effective way for enterprises, especially small and medium enterprises to save time and labor.

 

In practice, the center will meet the needs of an enterprise in intellectual property management and provide professional agency services. Under the premise of strict protection on trade secrets, enterprises entrust the center to take charge of all intellectual property related issues, including consulting, application, maintenance, protection, and management. Specific services include; the research of IP strategy and development and providing professional programs; assisting in the implementation of IP strategy and realizing capital operation of intellectual properties; helping enterprises develop their own intellectual property and train IP personnel. They also provide suggestions on IP registration and assist with routine legal issues; perfecting, monitoring and implementing an IP management system; offering infringement warnings and adjusting innovation direction and contents; timely investigations of IP infringement, evidence collection and protection of IP; helping enterprises with brand strategy and cultivation, and assisting enterprises to realize the economic value of brands.

 

 

It has reported that the Beijing Intellectual Property Office started the pilot IP trusteeship project in 2008, and established pilot centers in Fengtai, Chaoyang, Xicheng, Shijingshan and BDA in 2009 for further experimentation. Under government guidance, the selected IP agencies provide a package of IP outsourcing services for SMEs in a particular industry or region, including consulting services, patent and trademark application, IP strategy formulation, patent pledge loan, and patent licensing. Basic services are free of charge and personalized services are inexpensive. Three major formats were created: the incubator format was adopted in the Fengtai and Shijingshan districts, whereas agencies provide free services to hundreds of small enterprises within the same incubator. Second, the industry format was implemented in the Beijing Economic and Technological Development Area and agencies offer hundreds of biomedical companies free basic services; and the Wangjing Science Park in Chaoyang District took the third. In the framework of the professional service format, agencies provide dozens of companies with services such as strategic development, information support and industry retrieval.

 

As one of the important measures to implement IP strategy this year, the Beijing Intellectual Property Office has worked in unison with the Administrative Committee of the Zhongguancun Science Park this past April and started the “IP Promotion Project in the Zhongguancun National Independent Innovation Demonstration Park,” Four parks have become the “Beijing IP Trust Pilot Base.” The three-year project aims to give Zhogguancun IP full play. promote the implementation of IP strategy in enterprises, continuously stimulate scientific and technological R&D and innovation, significantly improve a companies’ patent and innovative activities with a package of intellectual property work, and foster an industrial cluster with strong independent innovation capability and core competitiveness.

 

 

Statistics from the Beijing Intellectual Property Office shows that since the commencement of the IP trusteeship project, remarkable results have been enjoyed in the following aspects:

 

1. Patent applications from enterprises have increased significantly. By way of the IP trusteeship, the common needs of enterprises have been designed into modules. The trust center offers free services including; consultation, information retrieval and processing and provide patent agency  and maintenance services at a lower price, which cuts the cost of personnel management and acquisition of hardware and software, saves business expenditures and reduces operating costs. In the first half year of the pilot work, the number of patent applications from participating companies increased by almost seven times, the rate of willful patent infringement was zero, and the corporate training rate reached 100%. Entrusting enterprises gained comprehensive enhancement in both the IP quantity to quality.

 

2. Patent management achieved initial success. The IP trusteeship has provided qualified enterprises with an intellectual property management platform, promotes the transformation of intangible assets via intellectual property transactions, overseas expansion, appreciation of patent portfolios and other intellectual property business models, and addresses the high-level requirements of corporate development. With the help of IP trust services, an enterprises’ awareness of patent management has increased substantially. Enterprises have begun to try strategic transfers and licensing of their patents, and some have achieved initial success. Enterprises receive benefits from patent management, which greatly enhances their enthusiasm in IP management and improves their overall competitiveness. For instance, Beijing Watchdata Inc. has successfully transferred their patent for a hundred thousand Yuan and signed an intentional patent contract with a Taiwan company, valued at USD one million..

 

3. Patent protection has been enhanced. Concerning patent disputes met by participating enterprises, professional intermediaries are introduced to facilitate IP protection. They produce a comprehensive analysis of patent information, define infringement and take active countermeasures. The lawsuit between the Beijing Feitian Technologies Co., Ltd and Aladdin Information & Technology Co., Ltd lasted for nearly four years, with legal fees that ran into the millions of dollars. With recent help from the Smart Card Industry Trust Center, remarkable results have been achieved. The Beijing, Feitian Technologies Co. filed an action against Aladdin for patent infringement and prevented the latter from expanding its domestic market. Feitian successfully stopped the authorization of Aladdin’s five invention patents, and hindered the competitor’s domestic patent layout. Finally, Aladdin was forced to reduce their patent licensing fees from 12% to 3% and initiated reconciliation.

 

4. The IP service industry has been enriched and developed. In the past, the IP service industry was mainly focused on agency, protection and data provision. After the implementation of the IP trusteeship project, high-end IP services have been created and services including centralized trust, high-end services, and overall outsourcing have been promoted. The emergence of patent management companies in particular, has also greatly enhanced the level of the intellectual property service industry.

 

Practice has proven that the IP trusteeship is a breakthrough in the traditional IP operating mode and an effective measure to promote the rapid development of enterprises.