IN the initial stages of traditional business strategies, firms tend to spend money on marketing to bring in fast returns, but increasing numbers of Chinese startups are now willing to invest in intellectual property (IP) despite the lengthier returns period. The pride of Airdoc Technology, a Beijing-based medical device maker, is a wall of patent certificates. Since its establishment in 2015, the company has owned more than 500 invention and design patents. Even during the COVID-19 pandemic, it logged considerable spending on IP management. In August 2020, China’s drug authorities approved AI diagnostic software developed by Airdoc for clinical use. The company also cooperated with big hospitals nationwide on scientific research, the results of which appeared frequently in the pages of international academic journals. “Patents have boosted the company’s competitiveness and made a great contribution to revenues,” said Airdoc vice president Wu Xiaolei. IP plays a crucial role in attracting investment for firms, and firms can transform intangible IP into wealth through effective operations, Wu said. Cost-effectiveness used to be Great Wall Motor’s primary competitive advantage in market penetration. But few customers are aware that the carmaker has been the leading patent holder among China’s private auto firms for several consecutive years, thanks to its annual allocation of nearly 100 million yuan (US$13.95 million) to IP endeavors. In recent years, Great Wall Motor has augmented its research and development expenditure consistently, enhancing performance and refining designs, particularly in the domains of new energy vehicles and intelligent software. In 2023, the company launched an off-road vehicle that not only won China’s prestigious design patent award but also became a resounding success on the market, with sales exceeding 280,000 units and profits nearing 20 billion yuan. With the increasing pace at which Chinese firms are going abroad, many private firms have faced IP challenges. In the early years of the 21st century, the originality of a Great Wall Motor design was questioned at a European trade show. And a decade ago, a domestic smartphone brand renowned for its high performance-to-price ratio also found itself embroiled in a patent dispute in India. Such growing pains have prompted Chinese firms to shift their focus from cost competitiveness to IP competitiveness. They have discovered that the only path to achieving sustainable development is prioritizing research and development while safeguarding innovation. Tencent vice president Jiang Bo said at the 12th China IP Annual Conference that the company has invested an astonishing 180 billion yuan in R&D since 2020. Tencent stands out as a leading player among global internet giants in terms of patent applications and grants, showcasing the alignment of its innovation input and patent ownership. The sharing of cutting-edge technologies through open patent licenses has also helped Tencent generate revenue. Describing the tech giant’s returns on its IP investment, Jiang said, “If sci-tech innovation is considered an addition, IP would be a multiplication, and using this multiplication effect can create sustainable social value.” While firms actively engage in IP investment, the government has been steadfastly fortifying IP legislation, amending patent laws and rigorously penalizing illicit activities such as patent infringement. (Xinhua) | 