New service models needed, forum says

In the era of the Internet, intellectual property service providers need to adjust their services, industry insiders said at an IP forum in Beijing in late March.

"New IP service models based on the Internet are exerting significant influence on the industry," said Dong Zheng, an official with the State Intellectual Property Office. "They will become a new engine to drive the growth of the sector."

Huang Jing, IP director for Qihoo 360 Technology, an Internet security company, said, "It is an irreversible trend that the IP service sector will feel the full impact of the Internet."

Differing from conventional businesses that generally start spending money on advertising after a period of capital accumulation, dotcoms will market from their founding by providing their services at low prices or even free, which will upset the traditional industrial pattern, Huang said.

He cited the rise of car-hailing app Didi as a typical example to illustrate how an online platform has fundamentally changed the pattern and operations in a traditional industry.

Dotcoms' common practice is to run a user-friendly platform, and through it, to offer services, he noted.

Thus, for traditional IP service providers, tapping into the Internet means examining all their business procedures to see where to combine with the Internet in a bid to seek direct contact with clients, rather than just creating a link to their office for promotion, he said.

"We are in an era in which IP value is on a rapid rise," he said.

One example quoted at the forum was of rights to TV series. While the copyright for popular TV series My Own Swordsman for each episode sold for about 1,500 yuan ($232) in 2005, that of Ruyi's Royal Love in the Palace, another TV series scheduled for release in 2017, sold in advance for 15 million yuan per episode.

In contrast with weak IP awareness 10 years ago, it is difficult to find pirated films or TV shows online as major video portals in China have poured heavy investment in buying copyrights and fighting piracy and their move has resulted in a sharp rise in copyright value, Huang said.

It is the same case with trademarks and patents, Huang said.

A pending legal wrangle between leading Chinese dotcoms Baidu and Sogou involving 17 patents and 180 million yuan in claimed damages has hit the headlines, which is reportedly the largest patent case in the Chinese Internet industry for the number of patents in issue and claimed damages.

While companies increase their efforts in creating more IP assets, service agencies need to build up their core competitiveness by keeping high-quality filing documentation and performing better in legal procedures, which will reflect the patents' real value, Huang said.

Ren Zhong, deputy general manager of Yogo Patent and Trademark Agency, said: "The Internet is an effective tool. Without making full use of it, we may be knocked out."

Yet it is the professionals and their solutions that matter in satisfying clients' needs, she said.

Offering innovative services to promote innovation, her company has long emphasized proximity to its clients, she said.

Its teams are sent out for long-term stays with clients to work out solutions, helping turn creative ideas into patent filings and offering advice on where to go for further research.

In one of its cases, Yogo found its client had no IP filings overseas despite its exports to 16 countries, so the agency analyzed its domestic patent portfolio and suggested it apply for international patents, a move that later saved the company in a Section 337 investigation, which is a probe by the US authorities into a possible violation of IP rights held by a US company.

It was the first time for the agency to represent a client in a Section 337 investigation, yet it managed to help reach a settlement of $200,000 from the Chinese company in less than five months, far less than the expected $1.6 million, a cost the private company couldn't afford.

Dong said as the central government attaches increasing importance to IP development and has proposed that the construction of a strong IP powerhouse should make substantial progress during the 13th Five-Year Plan (2016-20), the sector is facing "unprecedented opportunities".

"It is predictable that the inelastic demand for patent services will remain high in the next five years," Dong said.

More than 1.200 patent agencies with some 12,000 professional agents are now practicing nationwide, and "play a key role in promoting innovations", said Cao Donggen, head of the China Intellectual Property News.