Spiking demand for intellectual property services shows large room for growth

China's patent mechanisms need to be upgraded with foreign expertise, amid a growing demand for international intellectual property services from domestic enterprises, experts said.

The number of patent applications, the demand for legal support, and intellectual property consultation in various sectors have soared in recent years, inspired by the central government's call to develop intellectual property strategies.

But the development also poses challenges to the country's immature patent services, they said.

The State Intellectual Property Office said China has 1,001 patent agencies and 8,861 professional practicing agents registered under the office. The entire patent agency industry generated income of more than 8.7 billion yuan ($1.4 billion), including application and managing fees, last year.

There is still room for the industry to thrive as lots of IP-related services have not yet been fully developed in China, said He Hua, the office's deputy director.

"The skyrocketing demand in the patent application processing each year shows how big the industry is going to be, and the industry is far from realizing its potential," He said at an IP symposium held by the All-China Patent Attorneys Association on Saturday.

China received 825,000 invention patent applications last year, a 26.3 percent increase year-on-year. The 2.38 million patent applications filed was the highest in the world for the third consecutive year, the office said earlier this month.

Chinese companies are paying more attention to international patents, with a rising awareness of their IP edge in the global market. The country received 22,924 international patent applications according to the Patent Cooperation Treaty in 2013, a 15 percent increase from 2012.

But of all the domestic and foreign patent applications filed last year, only 60 percent were processed through patent agencies, a 15 percent drop from 10 years ago.

Local agencies' lack of knowledge of the international IP system and legal frameworks in overseas markets has forced major innovation companies to seek patents on their own.

Chinese telecommunication giant Huawei Technologies developed a 300-staff intellectual property rights department in 1995 and processed almost half the applications of its more than 30,000 international patents, said Cheng Xuxin, deputy director of Huawei's IPR department.

"When we have to apply for patents in overseas markets, we tend to entrust foreign attorneys or agencies, as local agencies lack the experience to handle foreign affairs," Cheng said during the symposium.

To help domestic agents improve their professional knowledge and skills, the patent attorneys association has introduced an online education system and requires its member agents to complete at least 16 hours of study to qualify for the annual verification.

Association President Yang Wu also stressed the importance of international exchange.

"Understanding the current global IP structure built by Western countries is crucial for Chinese agencies," he said.

Tao Xinliang, an IP professor at Shanghai University, said Chinese patent agencies should also expand their business scope to offer more value-added services.

"Our local agencies are relying heavily on operating patent applications for clients," Tao said.

"They should also develop services on litigation support, licensing, patent retrieval and IP training, which are all available services at IP agencies in the United States."

According to an analysis by the State Intellectual Property Office, only 20 percent of China's authorized patent agents provide services like IP assessment and legal consultation.

sunxiaochen@chinadaily.com.cn

(China Daily 04/28/2014 page3)