Intellectual property management growing in importance within Asia
Wang and Resnick of CPA Global talk about rising demand to protect intellectual property, especially from China, the No 2 filer of patents
Phenomenal economic growth in Asia, in particular Greater China and South Korea, has brought with it a stronger focus on intellectual property (IP) as companies in the region increasingly develop their own IP and recognise the importance of protecting these valuable intellectual assets.
Which are the fastest-growing IP markets?
China is the world's fastest-growing market for IP and one of the top filers of international patents.
According to the World Intellectual Property Organisation, China's direct patent filings and Patent Co-operation Treaty national phase entries grew an estimated 24.3 per cent in 2010, ranking it the second-largest filer in the world behind the United States. South Korea was in fourth place.
A number of major Chinese companies are already leading the way on the global stage. Telecommunications solutions providers ZTE and Huawei Technologies, for example, are the world's second and fourth-biggest patent filers respectively. We are also seeing similar trends for South Korean companies, where Samsung is rivalling IBM for the top spot in the number of US patent filings.
On a country-by-country basis, China's expenditure on research and development is now second only to the US. Indeed, China's focus on developing a technology-based economy, protected by IP rights, is at the core of its success.
How are Asian companies approaching their IP strategy?
The "build and protect" IP strategy is a common approach among Asian companies, as it is with many other international corporations. Companies grow their IP portfolios to safeguard their innovation, and take swift action against anyone infringing their IP rights. There is also a trend for IP-centric companies in Asia and elsewhere to develop stronger links between their IP departments and business units, so that both work with each other and ensure better alignment between their IP strategy and broader business objectives.
What opportunities are there to generate more value from IP assets?
As patent portfolios mature and new technologies are developed, companies will begin to realise that greater value can be generated for the organisation by making some less important patents work harder for them.
This can be done through licensing, selling to third parties, or abandoning obsolete technology and saving on high renewal costs. The savings can then be reinvested into R&D or other forms of open innovation. Ultimately, increasing the return on innovation dollars is paramount to most chief financial officers.
Through a comprehensive patent portfolio review, companies can gain important insights and make informed strategic decisions about how best to protect and leverage their patents, addressing such questions as:
- Which of my patents are business critical and need to be protected?
- Which patents are potential future strategic assets that may become more valuable to the company over time?
- Which patents can I sell or license for profit?; and
- Which patents in my portfolio should be pruned?
Armed with the answers to these questions, companies are able to evaluate how they can:
- Better protect their prized IP assets (current and future) to safeguard and enhance the company's competitive position;
- Enable the monetisation of non-critical assets to generate revenue; and
- Reduce costs associated with maintaining patents that are no longer of use or of little value to the company.