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Yearender-Feature: IP as the catalyst for China's innovation growth

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E-mail Xinhua, December 31, 2024

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by Xinhua writer Yuan Quan

BEIJING, Dec. 31 (Xinhua) -- For Long Weimin, a 58-year-old mechanical engineer with decades of experience and hundreds of inventions to his name, nothing is more exciting than innovations that can solve problems in the real world.

A chief engineer at the Zhengzhou Research Institute of Mechanical Engineering Co., Ltd., Long has also been appointed as a patent review consultant by China's top intellectual property (IP) regulator.

However, in the early years of his career, Long was unaware of the significance of a patent certificate. It wasn't until 2015, when an overseas company challenged an infringement claim on a brazing material product developed by his institute, that he realized its importance. Thanks to several patents secured in advance, Long and his team were able to successfully convince the challengers and secure global orders from leading enterprises.

Today, Long takes pride in showcasing the wall of patent certificates to visitors at his company. Many of these patents have earned numerous accolades and are featured in the country's space station and rockets, a source of national pride for the entire team.

Like Long, an increasing number of Chinese inventors and companies are recognizing the value of IP and using it to protect their innovative creations.

CORNEX is a young, private company focused on new energy. Established just three years ago in central China's Hubei Province, it has developed over 40 products in energy storage and electric vehicle battery sectors, while filing 3,300 patent applications.

Starting from a small workshop in Hubei three decades ago, Shushi Group has grown into a global tape supplier with an annual export exceeding 10 million U.S. dollars. The company places a strong emphasis on IP and has registered numerous trademarks worldwide. It aims to establish itself as an internationally recognized brand in the industry.

State-owned enterprises like China Railway Engineering Equipment Group Co., Ltd. also reap significant benefits from IP. The company has exported its self-developed tunnel boring machines to over 30 countries, generating patent transfer revenue exceeding 8 million yuan (about 1.1 million U.S. dollars).

China has become the world's first country with over 4 million valid invention patents, with enterprises being the main contributors. According to the China National Intellectual Property Administration (CNIPA), as of November 2024, the proportion of domestic valid invention patents held by enterprises reached 73.5 percent.

INFRINGEMENT PREVENTION

Many companies are realizing that IP not only generates profits but also protects a company's image and helps maintain order within the industry.

In the city of Yuzhou in Henan Province, Jun porcelain is a pillar of the local economy. Since 2003, delicate porcelain artworks have been gifted to foreign heads of state or collected in national museums and galleries. However, this growing popularity has also fueled a rise in counterfeit products. Local newspapers frequently report on efforts to crack down on counterfeit and infringing goods.

One local workshop owner lamented that while a genuine Jun porcelain vase was priced at 120,000 yuan, a counterfeit version could be sold for only 300 yuan.

Counterfeiting has severely impacted the reputation of leading enterprises. In response, these companies have enhanced IP protection by securing design patents and collaborating with authorities on enforcement. The local government also conducted special law enforcement operations to raise IP awareness.

In May 2024, a rapid IP rights protection center for porcelain patents was established in Yuzhou, slashing patent processing time from four months to just 7 to 10 working days.

Through rapid authorization, enterprises can secure quick protection for their innovations and prevent replication or infringement by competitors, thereby safeguarding their market share and profits.

IP PROTECTION OVERSEAS

As Chinese enterprises become more involved in global trade, an increasing number are facing IP disputes abroad. The lack of expertise, response capacity, and access to critical information has emerged as a major obstacle, preventing some companies from expanding internationally.

To address this, China has established IP centers nationwide to manage disputes and guide Chinese enterprises in safeguarding their IP rights overseas. Besides, the CNIPA has also intensified efforts on training and expert guidance, issuing monitoring reports and reminders to alert enterprises on potential risks.

Yutong, a leading electric bus manufacturer, benefited from specialized training by CNIPA's patent examination cooperation center in Henan ahead of the 2023 world bus expo in Belgium. The training, including patent early warning analysis, helped the company manage exhibition risks and boosted its confidence, leading to successful participation at the expo.

"Thanks to the training, we realized the importance of IP risk screening for overseas exhibitions," said Zhang Yongqi, the manager of patent management at Yutong.

Overseas markets have become the main driver of Yutong's performance growth. Its pure electric buses topped the European market in sales in 2022 and overall sales volume increased by 79 percent year-on-year in 2023.

Despite the rise in overseas tariffs, the electric bus maker remains confident, noting that its commitment to quality will continue to drive market success.

GROWING RECOGNITION

China has been the leading global source of international patent applications since 2019. The surge in global patents has been fueled by increasing IP awareness and a strong commitment to fostering independent innovation.

Nihat Deniz Bayramoglu, from Bayramoglu Law Offices LLC based in Las Vegas, has been providing IP consultation services in China since the 2010s. He found that Chinese enterprises are increasingly recognizing the importance of IP protection.

"In the past, only large Chinese multinationals were interested in applying for IP rights abroad, and now much smaller Chinese companies are also trying to protect IP rights," the attorney told Xinhua.

"In the past, the Chinese companies I represented were only defendants in court cases, and now many of my Chinese clients are plaintiffs in the United States suing American companies for patent infringement," he said.

He added that the perception in the United States during the 1980s and 1990s that China did not respect IP rights will gradually be replaced by the fact that "Chinese companies are innovators and leading cutting-edge technology."

In China's ongoing journey towards high-end, intelligent and green development, IP continues to play a supportive role. Innovators and companies are increasingly recognizing the value of IP, and actively leveraging it to drive innovation, compete globally and foster economic growth. Enditem