Shanghai beefs up intellectual property efforts ahead of FTA

In anticipation of the opening of a free trade area in Shanghai at the end of September, local authorities are considering a new mode of intellectual property administration in the experimental area, according to a senior governmental official.

Lyu Guoqiang, chief of the Shanghai Intellectual Property Office, said that the area will break from the conventions observed in most major cities.

"We are considering integrating enforcement forces of patent, trademark and copyright into one special team," Lyu said.

"We will try offering one-stop service."

Globally, the trend is that free trade areas tend to have higher standards for intellectual property protection, he said.

Han Zheng, Party chief of the city, said that for the Shanghai free trade area, "the key is innovation in terms of the mechanism rather than favorable policies".

The 28.78-square-kilometer area, the first of its kind on the Chinese mainland, comprises four existing bonded zones in the metropolis. Local authorities predict it will trigger a series of reforms in such sectors as finance, trade, tax and government administration, analysts said.

And it will allow wider access to the service industry, they added.

Asia-Pacific IP center

IP protection is a priority not only for the free trade area but also for the entire city, according to the local government.

Shanghai aims to be the IP center of the Asia-Pacific region, according to the city's development outline for the decade beginning from 2010.

"It is not just a concept, but a physical plan that we can turn into reality," Lyu said.

The chief said his team will foster 600 IP pilot and demonstrational companies before 2015, which will play a leading role in improving IP creation, use, operation and protection in the local business community.

And annual government expenditures in this regard will be some 100 million yuan ($16.33 million).

"We hope that Shanghai will become a top patent examination site in Asia and the first choice for settling IP disputes in the event of litigation and arbitration," he said.

Yet currently, the city is still short of "high-end experts and specialists", he said.

"In transnational IP disputes, few domestic agencies can represent clients in courts," Lyu said.

Wang Hongxiang, managing director of the Shanghai Patent and Trademark Law Office LLC, said human resources are the key to the IP service industry.

Generally, it takes five years for a new patent agent to grow into an independent practitioner, Wang said. It takes about 10 years to become full-fledged agent and around 20 years to be an expert.

In his company, the majority of the staff members are aged around 30. The young employees know about the latest technological trends.

Rotating in different positions, they are encouraged to develop a versatile set of skills while maintaining an edge in a specialized field, he said.

Zong Gang, president of Sinoipro IP Management and Technology Transfer Co Ltd, also noted the shortage of professionals in the industry.

"Despite heavy R&D investment, the massive scale of academic theses and an influx of returned overseas Chinese researchers, there is a lack of a crucial link - management of patent quality," Zong said.

He criticized the excessive pursuit of patent numbers.

"IP is a sheer business tool," he emphasized, adding that patent applications and management require cost considerations.

Some inventions with great potential are stifled due to the poor quality of the patent application, he said.

"Badly written documentation cannot provide enough protection and no one is willing to take it over. It damages inventions' commercial value and future potential."

To guarantee patent quality, He Rongming, president of Shanghai Micro Electronics Equipment Co Ltd, said his company's in-house experts file patent documentation themselves rather than outsourcing the business to agencies.

"Few local agencies have the ability to do that," He said.

The company specializes in manufacturing facilities and systems that are used to produce chips.

Integrated circuit products were among China's largest imports in 2012. Production methods, machinery and materials are essential to drive the domestic circuit industry, He said. A leader in the domestic lithography industry, the company has more than 1,300 patents, including some 450 granted abroad.

Unlike overseas agents, many of whom previously worked as a head of an R&D team, most domestic practitioners lack technological expertise and cannot provide effective protection, he said.

"Thus we have to nurture our own patent engineers. But when some of them quit our company, they are also a source of the expert pool in the society."

"We are lagging behind developed countries 10 to 20 years," Zong said. "That is actually a time for fostering our own qualified human resources."