Well aware of the crucial role played by the ownership of intellectual property rights (IPR) for any automotive business, Chongqing Chang'an Automobile Co Ltd has seldom been involved in patent disputes with rival companies in the sector.

"Intellectual property rights are a kind of intangible asset. You may not hold the actual shares in an enterprise, but if you have the intellectual property rights, you have the final say," said Zhu Huarong, vice-president of Chongqing Chang'an.

In order to avoid all forms of patent infringements, Chang'an automotive has adopted a patent strategy, which safeguards its legitimate rights and interests in a comprehensive fashion.

As for patent applications, Chang'an increasingly focuses on the development of new products, as well as gives consideration to the refinement of existing products.

The company believes that patent application claims takes precedence even over marketing and has adopted a policy of: "Who owns the patents, owns the market."

The patent is not only a barrier to market entry but also the most reliable line of defense controlled by the business itself. Chang'an also realizes the significance of patents as part of the design process and the company is now keen to innovate, adopt or emulate in line with international design standards.

The company has now established design centers in Italy, Japan and China. Through these centers, Chang'an designers now provide services for many world-famous automobile manufacturers, who are required to enter into an agreement with Chang'an automotive for the purposes of patent protection. This ensures that they do not plagiarize designs registered to third parties, whilst also maintaining non-disclosure on trade secrets, which might compromise Chang'an's own patents. This has proved one of the key measures in preventing patent infringements for Chang'an automotive.

To implement this strategy, Changan has set up dedicated team responsible for patent-related work, including patent liaison and patent management. This is in line with the growing maturity among the related institutions and systems in the sector.

The Intellectual Property Office of the company was established in 2004 and recruited four full-time patent personnel. In 2007 the office was redesignated as a management office with a staff of seven.

This resulted in the establishment of an incentive mechanism, which encourages every employee to participate in the intellectual property protection initiative. This saw the introduction of awards for patent application, authorization and naming, as well as the existing award from successful patent applications only.

In 2004, Chang'an applied for less than 100 patents, with the patent applications rising to more than 600 over the following four consecutive years (from 2005 to 2008).

As for patent licensing, the number was around 30 in 2004. This has now risen by more than 1000 percent to 394 last year. By the end of September 2009, cumulative applications amounted to 3,266, of which 2,425 were already authorized, according to Ma Ji, vice director of the company's technology management department.

(Source: China Daily)