Inside the IPBC China 2012 06 Dec 12
The IPBC China, which took place between 2nd and 4th December in Beijing, attracted just over 500 registered delegates, 65% of whom were senior representatives from domestic Chinese companies. Over the course of the event they heard a world class line-up of speakers, comprising chief IP officers and other senior corporate IP managers, patent aggregators, NPEs and intermediaries, discuss and debate a number of key cutting-edge IP value creation issues, especially as they applied to IP owners based in China and the rest of Asia.
On the evening of 3rd December a gala dinner took place in which the recently-announced China IP Champions – Chinese corporates with a world class, strategic approach to IP – were honoured. We were delighted that representative of 22 of the 33 companies were present to receive their Champions certificates.
Those who attended the IPBC China will soon have access, via the events website, to all the presentation papers, as well as to videos of the plenary sessions and audio tapes of the breakouts. But for everyone, here are a few bullet points of just some of the topics covered:
• It is not right just to think of IP value and transactions in terms of US patents. For big players global portfolios are attractive for other than defensive reasons. For those that take the time to understand individual national systems there are always points of leverage which can be used to bring potential, but reluctant, licensors to the negotiating table.
• Buyers, sellers and intermediaries clearly see significant opportunities in Asia generally. Companies in the region are more interested in acquiring patents as they expand into new territories and technologies; while national funds are also getting involved. Local patents are becoming a larger component in deals that are being done.
• Although the transactions market in China is far less developed than in other parts of the world, it is beginning to emerge. The Chinese market is growing in importance and companies will often need patents in order to operate there. If they do not already own them, they will have to license or buy them. This process is being helped by the fact that there is growing confidence in enforcement mechanisms in China – patents are actually worth having as a result.
• One significant problem in China, though, is that the vast majority of domestic applicants are far keener on quantity than quality. Helped by government subsidies, they are happy to apply for patents, but will not invest any significant sums in the process. This not only means that there are a lot of very poor patents out there (especially non-substantively-examined utility model and design patents), but also that SIPO (the Chinese patent office) finds itself under huge pressure in terms of the applications it receives – something that means those who are keen to prioritise quality have to wait longer for their grants. Also, many patent attorney firms have not developed significant expertise, because clients do not demand it.
• In terms of levels of sophistication there is a huge range among Chinese businesses. There are the Champions on the top, but below that awareness of IP, and the willingness to invest in it, begins to taper off relatively quickly. However, several people I spoke to commented that IP knowledge is developing rapidly. China is on the same kind of journey from workshop to innovation that places such as Japan, Korea and Taiwan have previously undertaken – but it is happening more quickly and under much greater worldwide scrutiny. Nothing that is happening now in China in terms of infringement, piracy and counterfeiting has not happened elsewhere before. But it has never before happened in the internet and digital age.
• IP is a business and the chief IP officer role reflects that. Horacio Gutierrez of Microsoft told delegates that around 50% of those that report to him directly are non-lawyers, but instead specialise in areas such as finance, strategy and deal-making; while two other CIPOs who took part in the event and are running big ticket monetisation programmes for their companies – Paul Melin of Nokia and Kasim Alfalahi of Ericsson – do not have formal legal qualifications. Another CIPO present, Andrew Sant of Crown Technology, has a background in physics rather than the law.
When we began planning for the event, we thought that getting 350 people to come along would be a great success, and that it would be fantastic if 50% of them were based in mainland China. So to have had the turnout that we got and the level of buy-in from Chinese corporates was immensely gratifying. In fact, it would be fair to say that the IPBC China exceeded even our wildest expectations. Many thanks to all sponsors, speakers and delegates for making the event the success it was. Now our thoughts turn to Boston in June, before we return to Asia in November 2013.
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