Patents are to corporations as nuclear weapons are to the military, said Feng Jun, president of Beijing-based Huaqi Information Digital Technology, which owns Aigo, one of the best known consumer electronics brands on the mainland.

He should know. Aigo owns over 600 patents in China. "We are trying our best to apply for patents at the moment. All efforts are for the company's future growth," Feng said. "Owning IP is like owning a nuclear weapon, which can empower a firm's competitiveness in the long run."

But when Feng started his business, like most of Chinese local companies in 1990s he didn't think much about intellectual property rights.

For the first three years of Feng's career he ran a company called Little Sun that sold other companies' products. But when Little Sun gained a modest reputation in the IT industry, counterfeiters showed up also calling themselves "Little Sun".

Because Feng's Little Sun had no unique products or patents, he had to give up the brand name and in 1996 began to build up a new company - Huaqi, which means 'Flag of China'.

The sunset of Little Sun made Feng aware of the importance of intellectual property.

Feng used the funds from Little Sun and as Huaqi company then made and sold 'Aigo' brand MP3 and flash disc memory cards in Beijing. Six years later, Huaqi became a famous IT company, Feng morphed his company into a technology research company. Huaqi's sales revenue was 2 billion yuan in 2007, and "80 percent of its profit was re-invested into research", according to Feng.

In the 21st century Feng's company began a new journey - overseas.

"Now we start our globalization, and the core for entering the global market is to combine a unique product with international patent protection," said Feng. "If Chinese companies want to survive in the international market, the only way is by improving our intellectual property capability. Chinese people are very smart so innovation should be the strong point for Chinese companies.

"For example, the memory card of a Japanese camera must use a card reader to link to the computer, but this" Feng paused and picked his Aigo memory card from an Aigo camera.

On one side is the common memory card used in digital cameras, on the other side is a USB end that can be directly attached to a computer directly.

Feng continued, "this card is almost too simple, for Chinese people it was just a piece of cake to create, but other countries' people didn't develop it. There's a different mode of thinking between Chinese and foreigners. They solve a problem by using addition, but Chinese people have a more flexible way of thinking and innovating."

Another aspect for Chinese companies entering the global market is to learn and use international rules and to cooperate with foreign companies, but since the Aigo brand expanded to the United States and Europe several years ago it has also experienced lots of difficulties.

In 2007, at the world's largest hi-tech trade fair, CeBIT in Sydney, Australia, Sisvel, an Italian patent agent company, confiscated Aigo's MP3 products under the belief that they infringed on Sisvel's patent rights. It was ultimately a misunderstanding and the incident became a chance for the two companies to cooperate.

After clearing the air, Aigo and Sisvel entered into a strategic cooperation agreement where Sisvel promotes and licenses Aigo's technology and patents worldwide. The partnership also marked the first time that Sisvel collaborated with a Chinese mainland company in promoting a Chinese IPR. Both parties have lauded the partnership as an important step in recognizing the IPR strength of Chinese brands.

Sisvel is also helping Aigo to promote its two patents: a method of digital watermarking, the corresponding device and digital camera.

"2009 will be a golden year for Chinese companies to go abroad," said Feng. "It is the right time for local players to register their patents now, and in addition to the Sisvel promotion, Aigo will do our own promotion of patents and products both domestically and globally.

"We are applying for patents almost every day. If the government would provide more support to domestic Chinese companies I believe that it will be a brighter future for Chinese IP protection."

Statistics from the Beijing Intellectual Property Office indicate that companies and organizations in the city applied for 31,680 new patents last year; 69 percent were invention patents.

Among all new patents, about 60 percent were from enterprises, and some 30 percent were from research and educational institutions.

According to the State Intellectual Property Office 2007 patent statistics, the office accepted 694,153 patent applications of three types nationwide, an increase of 21.1 percent year-on-year. It granted 351,782 patents, up 31.3 percent year-on-year.

(China Daily 01/19/2009 page9)