IP Regime in China
Actually, IP exchange is an important platform for IP monetization. The Chinese government has been promoting state-sponsored IP exchanges for decades. In addition to this newly established on in Beijing, up until 2020, around 24 exchanges have been approved by authorities at the provincial level or above.
In July of 2019, SpringIP Group, an innovative company dedicated to fostering enterprise innovation through AI and big data, surveyed IP exchanges in China and obtained several insights. In short, these exchanges have not achieved their full capacity as expected so far. Still, new IP exchanges are being established year after year regardless of their unprofitability.
The Sources of the Constraints
The following may explain this phenomenon:
First, to promote IP utilization and monetization, these exchanges are established in line with China’s national development plan. Second, these IP exchanges are vested with a public mission to monetize patents accumulated in previous years by research institutions and enterprises subsidized by the government. Third and more importantly, in more developed countries, sizable professional brokers facilitate IP transactions. At this stage in China, interdisciplinary experts who can handle both technology and business issues are still rare.
AI may be a solution to support IP exchange and professional brokers. But the market still needs time to fully apply AI in this field.
Private Exchange as an Alternative?
To fill the vacancy, privately-owned IP exchanges began entering this business a few years ago. In 2019, the number of active privately-owned IP exchanges has increased to more than fourteen. How might such private platforms facilitate IP monetization in the future? The following two developments are important to monitor.
First, the profit model of these privately-owned IP exchanges has not been proven. Whether the business model is sustainable largely depends on public awareness and recognition of the value of their services.
Second, privately-owned IP exchanges will need a larger pool of quality IP in stock to achieve economies of scale. They need to wait for more IP to be created domestically or otherwise to import tradable IPs from other countries.
Therefore, another development strategy is to equip themselves with the language and professional skills needed to access the global market to facilitate cross-border IP monetization transactions.
A great potential and investment opportunity?
How to resolve these issues? What kind of business opportunities are available for global participants? More information and detailed analysis can be found in a survey of IP exchanges in China conducted by SpringIP Technology Co., ltd. and published in the Innovation’s Crouching Tiger (www.ictiger2020.com).