BEIJING - A true, vivid story about ordinary people is better than any lackluster lecture, said Jimmy Zhong, vice-president of Philips (China) Investment Co, who has led the company's work on intellectual property (IP) in China for more than five years.

"I was deeply impressed," Zhong said, referring to a story he read about a young Chinese entrepreneur.

The man set up an Internet company and provided integrated game advertisement services. However, running a business proved arduous and the difficulties surpassed his expectations.

His girlfriend said she had little faith in his future and left him soon after he set up the business. In addition, his company was almost on the verge of bankruptcy because a competitor stole his idea and copied his software program.

But the embattled entrepreneur defeated his rival in court by demonstrating 14 software patents he had previously acquired. Eventually, he won the case and saved the company.

"I believe that if ordinary people enhance their awareness of IP protection, and learn to use patents to protect their innovations, it will provide a good guarantee for China to become a more innovative country by 2020," said Zhong .

He joined Philips' China operation in 2000, and during the past decade has witnessed a sea change in attitudes towards IP protection in China.

"The progress that China has achieved is really fast," Zhong pointed out.

From legislation to the government's macroeconomic policy objectives, are all very timely and support intellectual property rights (IPR) protection, which is not common in other parts of the world, he said.

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People's awareness of IPR protection is also growing. Philips holds an annual media seminar to enhance Chinese journalists' knowledge of IP protection.

In the early years of the seminar, Zhong recalled that he found that many reporters knowledge of IP was quite basic, but now, they ask in-depth questions, noting that "their professionalism probably beats their European and US counterparts".

"I used to say to my colleagues that we've caught up in good time, as China is in transition from a traditional economy to a knowledge economy," Zhong told China Daily. And in a knowledge economy, intangible assets, such as patents, brands and business models, will be of vital importance to every company.

For example, intangible assets account for around 80 percent of the total assets of many Fortune 500 enterprises, a figure that has increased sharply in the past decades. This is a trend that is also being witnessed by Chinese companies, Zhong said.

From its early days as a carbon filament lightbulb producer in Eindhoven, in the Netherlands, to becoming the world's leading health and wellbeing company that covers a large product spectrum such as medical equipment and lighting applications, Philips has always seen innovation as a driving force for its sustainable development.

"A well-functioning intellectual property system is essential for the protection and encouragement of innovation," said Zhong.

But he found that in Chinese history, intellectual property protection was inadequate, which led to the loss of some traditional treasures, such as some secret recipes of traditional Chinese medicines.

"If we don't establish a sound intellectual property system, we will lose more treasures, because patent holders are always worrying about their rights and fear sharing knowledge," he said.

Philips has 450 employees working in its IP and Standards offices around the world, with 50 in China. The China unit was established in 2000, and now has four branches in Beijing, Shanghai, Shenzhen and Hong Kong.

The company's Intellectual Property and Standards department is responsible for work such as patent and trademark applications, cracking down on piracy and cooperation with the Chinese authorities to protect IP.

"The Chinese government has greatly helped Philips in terms of fighting intellectual property infringements," Zhong said.

Last year, the State Administration for Industry & Commerce cracked 356 cases involving intellectual property infringement with Philips.

Meanwhile, Chinese Customs prohibited 30 kinds of infringing goods that violated Philips' rights from being exported to other countries in 2009.

The losses saved by these two organizations reached 10 million euros ($13.3 million) last year, according to Philips (China) Investment Co.

"Our company's commitment to China is unchanged," said Zhong.