Source: China Daily

A higher proportion of patents were used in 2016 compared with a year earlier, but small companies and universities still need to improve their ability to commercialize patents, according to a recent annual report by the State Intellectual Property Office.

The 2016 China Patent Data Report was based on a survey covering companies, universities, research institutions and individual inventors in 23 provinces, municipalities and autonomous regions. About 58,000 questionnaires were sent and more than 70 percent of them were returned correctly.

The report showed that last year, 61.8 percent of valid patents were used - either commercialized, licensed or transferred - 3.9 percentage points higher than the figure in 2015.

The report has found that the patent use rate varies among right owners - it goes up and then down as the number of their patents increase. For those who have one or two invention patents, 55.3 percent were used on average. The figure rises to a peak of 64.7 percent for those owning 10 to 29 inventions. And for those with more than 100 inventions, the figure falls to 41 percent.

A joint intellectual property enforcement team conducts a home appliances patent examination at a supermarket in Foshan, Guangdong province. Provided to China Daily

The same trend is seen in the patent industrialization rate, indicating how many of the patents were actually used in products and put to market. About 40 percent of patents were industrialized for those owning only one or two patents and those with more than 100. Among those who have between 10 and 29 patents, the proportion is over 50 percent.

Li Shunde, a researcher of law and IP rights at the Chinese Academy of Social Sciences, said the efficient use and industrialization of patents to realize their value is a "rigid demand" for China's innovation-driven development strategy.

"Now we still have the shortage of high-value patents and insufficient patent use," Li said. "These problems are keeping the patents from supporting innovation and entrepreneurship.

"Protection is just the means, and utilization is the real purpose," he said. "Combined, they will increase the value of innovation."

Universities have the lowest patent use and industrialization rates, while companies have the highest rates. However, the report noted that small companies and startups have difficulties in commercializing patents because many of them do not have effective financing channels to support production.

The report also found increasing demand for administrative protection.

When asked the most preferred means of protection, 61.3 percent of patent owners said they want the patent administrations to actively launch enforcement operations, which is a 0.9 percentage point increase over the previous year, while 51.3 percent said they will report to the patent administrations, 5.6 percentage points higher. Only 23.6 percent of right owners said they prefer filing a lawsuit at a court, 0.7 percentage point lower than 2015.

"In judicial procedures, many right owners have problems like difficulty in collecting evidence, prolonged procedures, high costs and low compensation. Therefore, administrative protection is more favored for its convenience and efficiency," Li said.

In 2016, law enforcement agencies across China investigated in 48,619 cases involving patent disputes, increasing 36.5 percent year-on-year.