China IP Administration and Bank of China in Strategic Agreement over IP Financing

In the latest move, the China Intellectual Property Administration and Bank of China have signed a strategic cooperation agreement. The agreement was signed by Gang Zhao, the CNIPA’s deputy commissioner, and Wei Wang, BOC’s executive vice president, on behalf of the two parties. It was also attended by Changyu Shen, commissioner of the CNIPA, and Liange Liu, chairman of BOC.

^{[Image Source: gettyimages]}

Role of IP

Speaking at the ceremony, Shen reiterated the importance of IP protection. She said that the CPC Central Committee attaches great importance to financial support for innovation and the real economy, and General Secretary Xi Jinping has made important instructions in this regard on many occasions. Under market economy conditions, innovation cannot continue without IP protection and financial support. Small and medium-sized enterprises (SMEs) are major players in innovation and have a strong need for IP financing. The CNIPA has been earnestly implementing the decisions and plans made by the CPC Central Committee and the State Council. Together with relevant departments, the Administration has issued several effective measures to promote IP finance and made remarkable results in IP pledge financing. During the period covered by the 13th Five-Year Plan, the total amount of patent and trademark pledge financing in China doubled to over 700 billion yuan, compared with the 12th Five-Year Plan period. The BOC, with a solid foundation and rich experience in IP pledge financing, has ranked among the top banking financial institutions in terms of funding scale and project number in recent years. The strategic cooperation between the two parties will bring their strengths into full play, further drive the upgrading and expansion of IP pledge financing, boost financial innovation, and better support the development of the real economy.

At the ceremony, the Laboratory for Intellectual Property Financing Innovation was inaugurated in the presence of Shen Changyu and Liu Liange. Wang Wei introduced the BOC’s IP financing achievements, while Zhao Gang introduced the main contents of the strategic cooperation. They jointly unveiled the BOC’s new loan product Hui Ruyuan • Zhihui Dai. It is reported that the two institutions will carry out all-around cooperation in six areas, including policy research, data sharing, product R&D, information support, business exploration, publicity, and promotion, and will set up laboratories for joint research and product R&D. The loan product of Zhihui Dai is aimed at providing a scenario and whole-chain application scheme on IPR for micro and small businesses engaged in science and technology, which has been piloted in 22 branches.

This cooperation will boost the IP financial sector and the IP pledge financing which will further increase financial innovation. This move is undoubtedly better since it will provide strong support for the development of the real economy. Using IP for finance purposes especially for those small and medium enterprises will have a positive effect. With such agreement, the procedure for IP pledge finance can be more structured and standardized

China’s increasing dominance in IP

Recently, in the EPO Index, the performance of China was much better making its efforts in maintaining a good position as a global tech giant. Despite the decrease being seen among major economies, China strides its way with an increase of 9.9% in 2020 as compared to the filing in 2019. China with 13,432 patents was ranked fourth place keeping it ahead of France with 10,554 patents. France also witnessed an increase of 3% in the filing. Whereas, South Korea also saw a steep rise in filing, with an increase of 9.2% in applications filed as compared to 2019, accounting for 9,106 patent applications.

It can also be noted that the huge increase in the filing can be attributed to the efforts being undertaken by China’s communist government for democratizing intellectual property rights and protection. China’s expansion in the field of patentability in areas of software and business method patents will prove to be a major role in China becoming the global leader. China has also passed the Fourth Amendment to Chinese Patent Law which will introduce punitive damages and also establish the Patent Linkage system. Taking USPTO into consideration, Chinese patent and trademark filing have seen a huge increase in the year which has been attributed to various forms of government intervention at various levels. These filings have been supported by government subsidies to the patent and trademark filing activities. Some of these non-market factors gave a huge boost to filings but on the other hand, it also results in more frivolous filings in patent and trademark space. By the year 2025, the Chinese government announced to eliminate the entire patent filing subsidy program put in place.

Author: Saransh Chaturvedi an associate at IP & Legal Filings, in case of any queries please contact/write back to us at support@ipandlegalfilings.com.