International Trend for Creation and
Application of Intellectual Property
--Establishment of Two
Emerging Markets
Peking University Law School/ Intellectual Property School
Zhang Ping
September 5th, 2011
International Trend for Application of Intellectual
Property — Establishment of Two Emerging Markets
Prologue ：Intellectual property System
Provides Two Emerging Markets
I. Creation of intellectual property ：innovation,
venture capital, independent company
II. Application of intellectual property ：transfer, license
and management
III. Intellectual property system and national
economic development
Peking University
Intellectual Property System Provides Two Emerging
Markets
The competition of advanced technologies between
countries evolves into the technology monopolistic
competition, and intellectual property rights become the
main support for development of contemporary economic
development.
Creation of intellectual property：innovation
achievements become rights
Application of intellectual property ： industrialization of
intellectual property
Application of
intellectual property
Licensed market
Creation of intellectual
property
Innovation market
I. Creation of Intellectual Property ：Innovation, Venture
Capital, Independent Company
Relations between Intellectual
Property and Creation
Technological Innovation, Cultural Innovation, Management Innovation
Patent system
Trademark system
Copyright system
Encourage innovation or monopoly?
Who ?What? How?
Peking University
I. Creation of Intellectual Property ：Innovation,
Venture Capital, Independent Company
Service object of intellectual property system: subject market
Patent system: enterprises are the innovation subjects，
universities fix position with the innovation of public
research institutes.
Trademark system：operators are subject, values of
Trademark depend on operating use.
Copyright system：authors and propagators, industry
push the progress of copyright system.
Peking University
I. Creation of Intellectual Property ：Innovation, Venture
Capital, Independent Company
Power of innovation come from the industry, all encouraged ways
and systems shall be serviced for industry
Innovate—Get patent—Protect rights：enterprises are operated by
market demand
Venture capital enters innovation field—distribute profits of future
Found independent operation company—new business model
Companies of high IQ：invest for innovation and creation
Technological Innovation, Independent Innovation,
Intellectual Property Innovation
In Chinese contexts, the ‘independent innovation’ is a political
phrase or used for government documents. It shall equal to
technological scientific or technical innovations.
Meaning of independent innovation:
Original innovation：mainly be the basic innovations in the field
of basic science and advanced technology.
Integration innovation：innovation after the optimization and
combination of numerous new techniques.
Introduce, Absorb, Innovate（Improved innovate）：
innovation after improving and upgrading the introduced
advanced technology.
Creation strategy for intellectual property shall be classified and
deployed.
Different Innovation Models Have Different
Requirements of System
Original Innovation
H
Integration Innovation
M
Improved Innovate
L
Patent Conditions
Examined Principles
Affiliation of Rights
Benefit Distribution
Liability for Tort
Invalid Threshold
Different Innovation Subjects Have Different Requirements of
System
Processing Enterprises：based on the operation
and innovation
Joint Venture Enterprises：pay attention to the
affiliation and sustainable development of rights
State-owned Business Enterprises: incomplete
market mechanism
The Relationship between Intellectual Property and
Technological Innovation
Positive
Effects
Negative
Effects
－Encourage innovation, and guarantee sufficient supply markets
for creation and invention, and stimulate sustainable and
comprehensive economic growth;
－Promote announcement of the innovation and the development
technical information, and encourage innovations within industry
and cross-industry;
－Promote risk investment;
－Guarantee consumer's interests in global economy；
－Create new market;(licencing of intellectual property)
Without supports of economics research to prove patent system
can promote innovation
The broad protection for basic creation block follow-up
innovation
Generate negative effects for the spread of technologies and the
market competition
Board authorization, overlapped claim of rights form patent
thicket (rampart of research and development, barriers of market）
The Relationship between Intellectual Property
System and Technological Innovation
The direct actions of intellectual property system for countries with behindhand
innovation abilities are the encouragement of attract investment, the attraction of
abroad middle-low technologies, the training of OEM enterprises. The OEM
enterprises don’t have the rights of innovation.
【For Example】 China Autos, Daily Chemicals
China still belongs to middle-low income country, the intellectual property
system shows complex dual natures both encouraging innovation and may
hinder technology diffusion. The empirical researches show that the intellectual
property system has the functions of promoting R&D investment, incenting
innovation on the one hand, but China’s enterprises often lack the necessary
resources to support continuous innovation activities. On the other hand, China's
industry still be locked in the low end of value chain, and the foreign trades are
suffered barriers of intellectual property, so be in trouble.
The Relationship between Intellectual Property System
and Technological Innovation
The establishment of intellectual property system is not a simple
linear relationship with the innovation ability of the country.
China V. Korea
Malaysia
V. Japan
In addition,
because
of the great disparity of technical basis, the
produced social effects of intellectual property system are also
different in developed countries and developing countries.
Effective promoting effects of intellectual property system for the
innovation depend on the social economy foundation and other
institutional environments, the same protection level of
intellectual property rights has different functions for the social
and economic development of different countries.
II. Application of Intellectual Property ：Transfer,
License and Management
Application of intellectual property ：
push the maximization of profits
Intermediary：low technology, non-service invention
Combination of Governments, Enterprises, Schools,
Researches: gorgeous form, poor effects
Companies’ Standard Strategies：international standard,
alliance standard, enterprise standard
Operating Company：breed pirates, trigger cutthroat
competition, bring global effects
II. Application of Intellectual Property ：Transfer,
License and Management
Nothingness and existence
of transfer
Many forms of license
Conditions of transfer:
Joint venture & merger
Throw cloth-wrappers
‘Spy’ of technology
Original independent license
Cross license
Unite license
Valuable patents do not
Transfer Animate trademark
do not Transfer Copyrights
do not transfer
Get monopolistic application
rights licensing for refreshing
patent
Successful Models and Related Policy Researches of Patent Technology Transfer of University
Peking University
II. Application of Intellectual Property ：Transfer,
License and Management
Operating company of intellectual property.
Different industries comprehensively purchase patent, entrust researches for
refreshing patents, specially analyze licenses, and looking opportunity to sale
them for patent infringement respondents, or both sides going commercial
negotiations.
The patent deployment and the cross licenses of upstream and downstream of a
chain bind charges.
Patent assessment becomes the key, so another new industry was bred.
II. Application of Intellectual Property ：Transfer,
License and Management
Repression of Unfair
Competition problem
Repression of Rights
Abusing Problem
Anti-monopoly Problem
Peking University
Encourage the application of
intellectual property in the design
of intellectual property system.
For preventing the rent seeking of IP
owner, Meanwhile rights of IP
owners shall be regulated.
Existing Problems in the Creation and
Application of China Intellectual Property
The major circulations of 1, 2, 3 cause problems.
The small circulations of 4, 5 are relatively unblocked.
⒉
⒌
IP
？×
⒊
R&D
⒋
Foreign
Enterprises
universities
Country
⒈
R&D
？
R&D
⒋
Enterprises
Personal：
⒌
Public Research institute
⒉
Non-service
invention
？×
R&D
⒊
System Function in the Transfer of Patent
Achievements
Fundamental theoretical research for patent
technology transfer:
 Law－－Incentive mechanism
 Management－－Market mechanism
 Technology－－Innovative mechanism
Compare and analyze
• US Bayh-Dole Act and its influences for the international and inland
technology transfer;
• Legislation and operating model of technology transfer of Asian countries;
• Legislation and operating model of technology transfer of European countries;
China Patent Technology Transfer Situation and
Development Research
Universities and public research institutes are still the innovation
subject. But the project approvals are not close with the need of industry,
and the patent application power has problems, so the patent conversion
rate always be in the low level, and without effective supports for nation
economic development and international trade.
Enterprises,
Schools and
researches
participate
mechanism
Interests
distribution
Transfer
innovation
subject
III. Intellectual Property System and National
Economic Development
There are no evidences prove that the creation and application of intellectual
property rights in the past 20 years have direct relation with China's economic
development indicators as follows:
Total value of national economic output
Labor and employment rate
The populaces’ purchasing power
International competitiveness of enterprises
There are direct evidences to prove the intellectual property protection of China
have obvious function for attracting foreign capitals. Main fields:
Information Industry, Automobile Industry, Large-scale Equipment, Medicines, Daily Chemical
Industry
No economists took part in intellectual property system and strategic research in China.
And no economics can support the study of the theory ‘intellectual property system to
promote the economic development of a country’.
III. Intellectual Property System and National
Economic Development
Experiences Replication
Developed Countries：The intellectual property system plays a great role in promoting
the development of a country's economic, and intellectual property incomes become
the main support of national economy (WIPO Report).
Developing Countries：The intellectual property system has obvious promotion
function on introducing foreign investment, and has attraction for transferring middlelow technologies. But it has some restrictions at promoting the innovation of local
technologies’ and the growth of intellectual property. And this system presents multiple
results for the promotion of national economic development (Japan contrasts with
Malaysia; South Korea contrasts with China).
Least Developed Countries： The intellectual property system hardly has effects for
the national economic development (Venezuela etc.）.
The Relationship between the Need of Patent Protection
System and the Real National Income Per Capital
System Need of Patent Protection
Weak Protection
Stage
Strong
Protection Stage
Critical Point
(around $2500)
Ideal
Condition

Real National
Income Per Capital
Keith Maskus, Intellectual Property Rights in the Global Economy, Institute for
International Economics, pp102-109, Fig. 4.1
23
My Views
The essence function of intellectual property system is the encouragement of
monopolies, through awarding monopolies to encourage the innovation activities
of main body of market.
Intellectual Property System Take market economy as service object
Take enterprise as the subject of function
For the innovation and competition activities what are away from the market,
the intellectual property system can’t put into effect. For incomplete fields of
market economy, functions of intellectual property system are limited.
The implementation of national intellectual property strategy shall make the most
active area of market economy as the key.
Enterprises’ intellectual property strategy shall make the market competition
as the guide.
Universities’ intellectual property activities shall be distinguished：different
intellectual property strategy of the basic research and applied research.
Thought ：Purpose of IPR Law
The early IPR law born in Europe was originated from
development of market economy.
The modern IPR system growing in the USA is still directly
driven by the market interest.
Although the IPR law is boasted as the law “safeguarding
intelligence”, it always give expression to the purpose of
serving the development of industries and international
economic interests.
Back to the initial purpose of IPR legislation, jurisdiction
and research
As long as the IPR protection circles around industrial development and takes some key industries as priority, IPR creaTion and application will take effect.
Please Correct Me
Criticism
Peking University Law School/
Intellectual Property School
hellopku@pku.edu.cn