During the High-Value Patent Cultivation and New Patent Insurance Product Press Conference at the 2017 Patent Information Annual Conference of China in Beijing, it was announced that Advance China IP Law Office (ACIP) and Ping An Insurance Group were officially launching their "High-Value Patent Invalidation Insurance" product. This is the first instance of any Chinese company offers an insurance product which covers the entire life cycle of a patent. Furthermore, the aforementioned launch heralds the formal inclusion of the legal rights and interests of patent holders within a Chinese insurance company's scope of protections.
Commenting a new insurance product, the Guangdong IP Office indicated that cultivation and operation of high-value patents are indispensable from sponsorship of financial capitals, suggesting that this insurance product covering the entirety of a patent’s life cycle jointly offered by ACIP and Ping An Insurance is coming at the right time. On the day of the announcement, Professor Li Mingde of the Chinese Academy of Social Sciences pointed out that the differences in the amount of compensation awarded by China and the United States for damages for patent infringement suits is reflective of how little China recognizes the value that patents have to the market. Professor Li claimed that the issue of how rigorous patent protections should be better solved by changing China's understanding of the value of patents in the market. If this value is not understood, even the existence of statutory minimums for damages as well as the existence of punitive damages will not be enough to solve patent-related issues.
Some academics have suggested that because they believe US patent protections to be excessive and that such excessive protections interfere with industry, China should be on its guard to ensure that it will not have the same problem. However, there are some within the patent industry who hold that because the patent industries of China and the United States are currently at different stages of development, that China should instead support NPEs (non-practicing entities). Professor Li Mingde believes that patent rights are rights which are relevant to market competition, and that their value is realized through transfer activities, including buying, selling, and licensing, etc. That NPEs have been the source of problems in the United States does not entail that the same problems will occur in China. So, naturally, it would not make sense to deny NPEs the right to exist. In some cases, the pooling of patents by NPEs after acquisition can be incredibly valuable. But it, same as the patent system, is a double-edged sword; problems that arise from this should be solved as they become apparent. This does not entail an overwhelming negation against NPEs.
The business community finds itself in agreement with the opinions of those in academia. As for how to raise the value of patents, Guangzhou Digital Rise Technology, whose Digital Rise Audio (hereinafter referred to as DRA) is China's sole national standard for digital audio coding technology, believes that customer experience is the key to ensuring the continuous increase in value of patents. Standard Essential Patents’ (hereinafter referred to as SEPs) importance lies in its continuity. As such, both patents and SEPs should increase in value as they are being promoted. In this way, customers will be more acquainted with patent technology.
In recent years, it has been Japanese, Korean and Taiwanese firms that have held the pioneering technology of high-definition display . However, the Chinese firm Shenzhen Huaxing Photoelectric Technology Co. Ltd. (hereinafter referred to as Huaxing Photoelectric) also entered the market with its independently researched, designed and constructed line of high-definition panels. Huaxing Photoelectric has established its patent value chain based on the three properties of patents: technology, law and the market. Huaxing Photoelectric's internal patent review committee is assessing the value of the aforementioned patents with supplying agents or a market research institution. Between June of 2010 when its first patent was filed and June of 2017, Huaxing Photoelectric has applied for an upwards of 24,000 patents. Having applied for so many patents and being in talks with other companies about licensing, Huaxing Photoelectric has put itself on the map.
Shenzhen O-film Tech Co., Ltd. (hereinafter referred to as O-Film) is an internationalized platform-type enterprise which primarily produces touch screens, optical sensor modules and fingerprint-identification modules. O-Film also is engaged in developing smart cities, smart homes, smart cars and AR/VR, technologies which are makes waves in the patent arena. O-film believes that the secret to high quality patents is not maintaining individual patents, but having a combination of patents, or, better yet, having a tightly-guarded protective network of tens of thousands of patents. O-Film was involved in a patent lawsuit in which the amount of the object of litigation was RMB 60 million. The suit took O-film and the defendant from the Review Committee all the way to the Supreme People's Court, where the defendant's patents were ended up invalidated. O-Film's success was a milestone for the industry. The lesson to be taken from the aforementioned case is that one's focus should be on patents themselves rather than the day-to-day running of one's business. The fallout of the aforementioned case led O-Film to come to the realization that patents are a company's greatest weapon. Upon realizing this, O-Film established a technology committee which set up an improved innovation assessment system that would build up a patent pool from both inside and outside the company. Furthermore, O-Film created an effective patent protection system which they have put in place to conduct infringement analysis during R&D. Should infringement is potential, it may provide designing-around alternatives, or counteracts if alternatives are not available. The system is so operating to ensure that it itself can avoid a suit or will not turn disadvantaged in a potential suit.