Home > Topics > Putting Intellectual Property to Work: Experiences from Around the World > IP Management at Chinese Universities > Editor's Summary, Implications and Best Practices

The creation and management of intellectual property at Chinese universities poses enormous challenges and enormous opportunities, as do many other aspects of China’s recent economic rise. Foremost, the creation of a robust IP system in China shows the extent to which reform of such magnitude is possible, the extent to which cultural change can be legislated, but also the natural limitations of such processes of legal and cultural change. Foremost, the lesson may be drawn that any policy introduction of such magnitude requires time to be absorbed and to bear its desired results.

Thus far, in China IP law has been instituted and domestic applications for patents are growing rapidly, yet the resulting IP rights have yet to become widely regarded as meaningful commercial assets or media for market exchange. The Chinese experience exemplifies how some aspects of a newly introduced complex system may be taken up quickly, easily, or in ways that were not wholly anticipated, while others may take much longer. This can be detrimental if all aspects of the system are required in order for it to be effective. Time will tell whether the introduction of intellectual property to the universities of China will remain partial—generating many patent applications but not creating incentives or means for technology transfer and commercialization—or will become a fully functional complex system. Given the amount of brainpower within its university system, if China succeeds, the economic and technological implications could be truly enormous for the world.

China has not passed formal legislation governing the ownership of intellectual property from government funded research. Yet, a series of ministerial rulings have established national policy. Given the exponential rate at Chinese universities have increased their patenting, it seems unnecessary for policy to provide absolute certainty, merely reasonable clarity, over the dispensing of property rights. The incentives for institutions to seek any available advantages that might result from claiming property rights may by themselves be sufficient to drive the change.

The social and cultural elements of instituting IP protection at Chinese universities are at least as interesting and important as the policy and legal elements. Academic cultures everywhere tend to be unfamiliar with the concept and practice of property rights over research outputs. However, there is evidence that certain cultural elements within the Chinese academic system may in fact align with and even embrace the practice of claiming intellectual property. It may even possible that the Chinese academic culture could go even further than its western counterparts in embracing certain aspects of intellectual property, such as trade secrecy, and disregarding certain conflicts of interest.

The Chinese experience with the basics of IP management illustrates and exemplifies an important fact, that patenting alone is neither necessary nor sufficient to affect technology transfer and commercialization. The surge in patent applications, unaccompanied by any observable growth in technology transfers, highlights the potential distortions that can be introduced by emphasizing or rewarding the means, rather than the ends. By having introduced patenting first, there is room for further steps to be taken to begin to develop and exploit the portfolios being created. This disconnect is further underscored by the lack of institutional IP policies and understanding and the lack of institutional offices of IP management and technology transfer.

These institutional challenges, difficult, but feasible, to address, include the current lack of trained IP professionals and the concomitant bureaucratic uncertainty about “who is in charge” of a university’s intellectual property. Part of this is a human resource challenge, and part is an institutional policy challenge. The former can be solved by training, the latter by policy innovation within the institution. The range of policies that need to be considered include the basic terms of the institution’s ownership of intellectual property, designation and empowerment of offices and officials responsible for its management, revenue sharing arrangement with inventors, conflicts of interest, and terms of engagement for industry sponsored research.

There are two general sets of challenges confronting technology transfer by Chinese universities: institutional challenges and market challenges.

Market challenges may be beyond the reach of universities to address, and should instead be taken up by policymakers. There are, however, certain steps that universities can take in marketing their technologies. Market discovery is hampered by lack of available information about available technologies. Universities can take efforts to post technology listings, advertise at industry events, or collaborate to create industry-specific or technology-specific clearinghouses for their technologies. Yet, the greatest market challenge, appears to be the lack of demand within Chinese industry. This can be addressed by universities to some extent. Instead of marketing to existing industry, universities can instead market to investors, who can choose from the most promising technologies and create new firms to develop and commercialize the technology. Tsinghua and Beijing have both created private firms that help to mediate such entrepreneurship. Ideally, however, a mature market in venture investment will emerge that plays a much greater role in developing university technologies than these single firm initiatives will be capable.

Finally, as in every country, Chinese authorities are concerned with keeping the benefits of government funded research within China. However, opportunities may be exploited to match Chinese technologies with foreign firms, either licensing to subsidiaries based in China, with requirements that development R&D be conducted in China, or establishing mechanisms through which foreign venture investors can invest and participate in the creation of start up firms in China based on Chinese academic technologies. If these, along with other critical, institutional and market challenges can be met, the potential for technological breakthroughs and economic development based on innovation at Chinese universities appears to be promising.

Key Implications and Best Practices

Given that IP management is heavily context specific, these Key Implications and Best Practices are intended as starting points to be adapted to specific needs and circumstances.

For Government Policymakers

• Reform or creation of an IP system is feasible, if it creates sufficient opportunities for domestic constituents. Legislation that requires cultural change is feasible if it concurs with existing elements of the culture.
• A policy that provides clarity about ownership of IP rights resulting from government-funded research will provide incentives for institutions to seek any available advantages that might result from claiming property rights. This will then drive the trend of university patenting.
• Avoid overly bureaucratizing the institutional management of intellectual property. However, take steps to address the market challenges, to improve information flow, marketplace infrastructure, and financial conditions that encourage investment in university technologies.

For Senior Management (university president, R&D manager, etc)

• Draft and implement an institutional IP policy that reflects the mission and ideals of the institution.
• Establish and support a technology transfer office that has the resources and capacity for capturing and exploiting IP assets, consistent with the institution’s mission, for the benefit of both the institution and society.
• There can be a significant amount of freedom, as well as responsibility, in instituting IP management within an institution where there has not been such a system or culture in place. This is a challenge and an opportunity.
• The challenges facing a nascent technology transfer system can be subdivided into institutional challenges and market challenges. Addressing institutional challenges and market challenges will require different approaches and strategies, drawing on diverse expertise.
• Large numbers of university patent applications do not necessarily translate into large numbers of technology transfer or commercialization deals. The entire system of university technology transfer is more complex than simply patenting of results. The other elements of the system should be provided for as well. These include institutional policies and capacities, and support of informational, infrastructural, and financial conditions for a market to form around university technologies.

For Scientists

• In a narrow sense, patents can be thought of as publications and have merit in advancing ones career within academia. Patents are, however, much more than publications. Hence, learn from your technology transfer office what patents are, and when to seek patents on inventions arising from your research program.

For Technology Transfer Officers

• Large numbers of patent applications do not necessarily translate into large numbers of technology transfer or commercialization deals.
• Be clear with your administration, your researchers, and your industry clients as to what you have the responsibility and the power to negotiate. Lack of such internal clarity can hamper the effectiveness of technology transfer.
• It is important to know what to patent and why, for example the commercial potential and legal ramifications of patents. Hence, avoid filing patent applications based on the same criteria as submitting manuscripts for publication (that is, peer status, promotion or career development).
• You are the expert on intellectual property for your institution. Take initiative in advising your administration or academic senate on IP policy and infrastructure, in order to optimize the effectiveness of the overall operation.
• You are the responsible agent, in many cases, for advancing the institution’s mission of moving the fruits of technological progress to the marketplace. This involves deal making, marketing and solicitation of investment. Within new technology transfer systems, as in a developing country, it is critically important to assume responsibility for this role.