Companies in Hangzhou increasingly view intellectual property protection as a business incentive rather than defensive requirement, according to executives of manufacturing companies headquartered in the city.

"We consider IP protection a way of gaining profit," said Zhong Guoqing, chief vice-president of Supcon Group, the nation's biggest maker of automated control systems.

Zhong said Supcon invented China's first paperless data recorder in 1994, but did not realize the need for IP protection until two years later when copycat products flooded the market.

Supcon learned its lesson and started to stress the importance of IP, setting up systems to support innovation and protection. The company has since been granted 349 patents, more than 40 trademarks and set several national and international standards.

Wang Weiyi, vice-president of hand and power tool maker GreatStar, has also learned the importance of close attention to intellectual property.

"As we expand our business to the United States and Europe, we have been dealing with more and more IP issues, which requires us to improve our awareness," said Wang.

The export-oriented company has a big share of the US and Europe tool markets, and generated more than 2.1 billion yuan ($329.54 million) in revenue last year.

GreatStar has applied for 269 patents and been granted seven for inventions. All its proprietary IP has been commercialized.

But Wang pointed out that IP disputes can be baffling in foreign markets.

A US company recently sued GreatStar claiming its IP rights had been violated. "We were shocked at first, but after we consulted a lawyer, we found out our company is actually using a technique totally different from theirs," Wang said.

The case concluded in favor of GreatStar, showing the benefits of doing more research, Wang said. The company now has advance warning of possible patent infringements during the design process.

But Wang said his company is still troubled by domestic patent infringement. Smaller local companies copy its designs while using low-quality materials to bring down the price.

"I hope the authorities strengthen law enforcement," he said.

Hangzhou Mayor Shao Zhanwei noted the city "has been actively developing high-tech industries, transforming and upgrading traditional industries, in which we emphasize innovation and IP protection".

He said the city government has issued a range of IP regulations including the only one in the nation that protects rights in the outsourcing industry. It has also set up a special fund to reward IP applications. Last year, the local government spent more than 41 million yuan to promote and strengthen IP.

The city has also held an annual industrial design competition since 2007 called "Creative Hangzhou" to encourage original thinking and innovation.

Local companies filed nearly 40,900 patent applications last year, an increase of more than 38 percent over 2010.

Among them, more than 4,000 invention patents were granted, up 40 percent from 2010

The city government's efforts have helped Hangzhou make the list of national IP model cities, said Tian Lipu, commissioner of the State Intellectual Property Office. SIPO unveiled the list in late April.

(Source: China Daily)