Office of Technology Transfer - Shanghai Institutes

for Biological Sciences

Q1. Why is the Chinese patent system such a mess?

Ans – That has two main reasons. First, China the patent applications being
filed at SIPO aren’t valuable. Second, while utility patents experience a somewhat
better fate, means number of patents filed in china has increased so rapidly that
SIPO had to train a lot of people to review and examine patents. And skill level of
some patent examiner was not up to standard that can be easily issued some
prior art and granted some patent that can be invalidated easily or insisted on
some unreasonable strict requirements that deviated from the principles of
patenting and only granted narrow Claims which significantly reduced the value of
issued patent about 61 percent of those filings in China are also abandoned after
five years. Hence filing patent applications was a total waste of resource.
Q2. What is Gordon Zong doing at SIBS OTT? What is the position of the SIBS
OTT within other technology transfer offices in China?
Ans: Gordon Zong is trying to teach Chinese universities and research institutes
how to do effective technology transfer and IP licensing, but he is trying to do it in
an environment with weak property rights and an underdeveloped support
infrastructure. As the managing director of the Office of Technology Transfer at
the Shanghai Institutes for Biological Sciences, he works with researchers at the
forefront of biology and biotech, yet he faces seemingly insurmountable obstacles
to getting the technology commercialized within domestic Chinese companies, so
he has turned to global multinational pharma companies, for now. The purpose of
the case is to help present and future managers at global multinationals who have
responsibility for R&D strategy to understand some of the complexities of the
Chinese intellectual property environment so that they can build effective
participation strategies for their organizations. Understanding the misaligned
incentives that result in the production of junk patents and the challenges of
patent enforcement, as well as the direction of change are vital, because as the
Chinese system evolves quickly, the implications of those changes will have
important commercial consequences.

Q3. How fast do you think the Chinese IP landscape is going to change? How
should the SIBS OTT grow given these conditions? What are the implications to
training and incentives?
Ans - IP landscape is going to change Chinese in huge way.IP landscape is
dominated by foreign incumbents often inclined to avoid developing or
transferring core technology into China in order to maintain their competitive
advantages. IP-conditioned incentives may seem like an attractive tool to help
domestic entities compete in this environment. SIBS OTT successfully
implementing SIBS IP & technology transfer polies which would provide a solid
foundation & guidelines for future operations. It would foster active collaboration
between industry and investors on commercialization. Strong strategic incentives
exist for defensive publishing. Empirical studies reveal that motives for defensive
publishing include preserving freedom to operate, defense publishing is less costly
than patenting, some disclosures cover inventions that may not be patentable,
and patents can be of little value because of high enforcement.

Q4: What should multinational companies do in these circumstances? What

should domestic companies do in this environment?
Ans: These circumstances help to understand the demand and priorities of both
multinational & domestic companies. Many multinational did not see the benefits
of filling patents in china where the environment made enforcement uneconomic
or frustrating at best. But some company did Airbus & Boeing two global leaders
in commercial aviation changed their strategies in 2005 & filled patent application
in china. Purpose is only to maintain market share. While domestic companies
were still more interested in low risk technology with near-term payoffs than in
early stage IP & consequently they were reluctant to license.