The State Intellectual Property Office (SIPO) of China has released a set of new policies to support innovation and growth of small and micro businesses (SMBs) in China. The English-language release is available at english.sipo.gov.cn/news/official/201410/t20141022_1023705.html. The 15 policies drafted by the SIPO are aimed to support local SMBs in four ways. Policies 1 to 3 are aimed at supporting innovation and development, by providing

  • prosecution highways for SMBs to expedite patent prosecution for their core technologies;
  • cost reduction policies to reduce the costs of obtaining patent protection; and
  • innovative financial incentives to help SMBs to recognise the value hidden behind their IP, to seek and obtain patent protection and to realise the value of their IP.

Policies 4 to 6 are aimed at improving public IP services so that they are more accessible to SMBs, by

  • building public service systems (including a tiered State-City-County electronic information system and expert contacts to provide education and information resources relating to IP);
  • encouraging professional IP organisations to include SMBs as members; and
  • to encourage IP firms/patent agents to provide discounted or even pro-bono services to SMBs.

Policies 7 to 11 are aimed at strengthening the IP utilisation capacity of the SMBs, by

  • helping enhance their IP management skills;
  • establishing a ‘preference’ system specifically aimed at nurturing promising, technology-based start-up companies;
  • strengthening the ability of the SMBs to use patent information to make commercial strategy decisions;
  • targeting key personnel in SMBs to involve them in IP training programmes; and
  • encouraging innovation and entrepreneurship.

Policies 12 to 15 are aimed at creating a broad public environment which encourages and supports IP development among SMBs, by

  • supporting IP service providers dedicated to assisting SMBs;
  • increasing administrative powers in patent enforcement;
  • strengthening patent enforcement aids, relevant laws and regulations and SMBs’ awareness of patent protection and enforcement; and
  • creating a positive atmosphere for IP, using media channels to announce and promote government policies for supporting SMBs on IP-related matters, and showcase successful examples of SMBs built on IP development and protection.

The above policies are directed at local Chinese SMBs, particularly technology-based start-up companies, to help them make the most of IP, to help them source finance and to help them survive in the long run through IP development and protection. There are currently about 11.7 million SMBs in China, representing 77 per cent of the total number of companies in China and these businesses are badly in need of IP aid. According to the deputy commissioner of the SIPO, Hehua,

“IP is an engine that powers the rapid growth of small and micro tech firms and earns them more profit margins. To help resolve the financing bottleneck, the SIPO urges its branches across the country to partner with various financial organisations to channel more lower-interest loans to small and micro-businesses and reduce patent insurance premiums”.

These new policies may seem to present rather limited immediate benefits for overseas enterprises setting up or operating in China, since they are unlikely to benefit from the financial incentives and support provided by these policies. Nevertheless, foreign enterprises in China may benefit from the enhanced administrative procedures and capacity for patent enforcement, as well as from better public awareness on patent rights and enforcement issues. By creating a positive atmosphere for IP and encouraging innovation, it may inherently result in less copying and infringement of IP rights. Thus, these policies will probably present long term benefits for foreign enterprises operating in China.