On December 6th, the “Theoretical Perspective” column of the 2544th issue of China Intellectual Property News published an article titled “Cultivating High Value Patents Based on the Market” by Xie Zhiwei, founder and CEO of ScienBiziP, and Xue Xiaowei, director of ScienBiziP Empowerment Research Institute. The full text is reproduced below.

The author of this article

Xie Zhi is the founder and CEO of ScienBiziP

Xue Xiaowei, Dean of ScienBiziP Empowerment Research Institute

As the concept of intellectual property rights becomes increasingly ingrained in people’s minds, innovation entities are paying more attention to the quality and value of patents, especially in the cultivation of high-value patents, which has become the main direction of innovation entities’ intellectual property work. Various innovative entities have realized that cultivating high-value patents can truly bring economic benefits or establish competitive advantages, and is also more in line with the rightful purpose of the patent system to “pour oil of interest into the flame of genius”. In my opinion, when innovation entities carry out high-value patent cultivation work, on the one hand, they need to clarify the concept of high-value patent cultivation and identify which patents belong to high-value patents; On the other hand, it is necessary to clarify the key to cultivating high-value patents and do a good job in key links to ensure the success of high-value patent cultivation.

At present, the industry generally recognizes the evaluation criteria for high-value patents from three dimensions: legal value, technological value, and market value. Among them, legal value includes stability of rights, determinability of infringement, etc; The technological value includes technological maturity, technological substitutability, etc; The market value includes the current application degree of the market, the future application market size, etc. Furthermore, many local standards for cultivating high-value patents have been optimized and modified based on this foundation.

In my opinion, the evaluation criteria for high-value patents mentioned above are more based on the results, reflecting what kind of patents can be included in the scope of high-value patents and the extension of the concept of high-value patents. At the same time, there are many evaluation dimensions, making it difficult to grasp the core of high-value patent concepts.

In fact, the focus of high-value patents lies in their “high value”, and the value of patents lies in connecting technology and the market. Therefore, the connotation of the concept of high-value patents should focus more on the degree of value realization of the technology represented by the patent in the market or industry, as well as the degree to which the technology represented by the patent is adopted by relevant market participants now and in the future. If the technology represented by a patent is widely adopted by market participants and has generated significant value in the industry or enterprise, then the patent should be classified as a high-value patent.

Such evaluation criteria can better fulfill the role that high-value patents should play. At the enterprise level, high-value patents target technologies with market prospects, utilizing the innovation of patents to enable enterprise products to win in market competition with superior performance, thereby forming a competitive advantage. At the social level, various innovative entities continuously research and develop new technologies, explore new fields, and form new business models in order to cultivate high-value patents and form competitive advantages. Only through healthy competition among each other can we promote the overall technological innovation and development.

The author believes that for the cultivation path of high-value patents, efforts can be made in areas such as high-quality creation, high-quality application, high standard authorization, precise long-term layout, precise policy support, high-level selection and evaluation. Efforts can also be made in analyzing the current status of patent layout, optimizing the combination of already laid out patents, exploring and cultivating unexplored directions, evaluating the value of authorized patents, and strengthening the cultivation of patent application.

When it comes to cultivating high-value patents for enterprises, the fundamental utility of patents for enterprises lies in their legal exclusivity, which can be used to restrict competitors from producing, using, selling, and importing patented products. Therefore, the key to cultivating high-value patents lies in whether the exclusivity of patents can be effectively utilized to restrict competitors, whether the cultivated patents can focus on technologies or products that may be widely adopted in the future, so that competitors’ technologies or products fall within the scope of patent protection, thereby reducing competitors’ market share, or charging licensing fees from widely adopted technologies or products to increase their costs, forming a relative competitive advantage for enterprises in the market. The rights holders of essential patents in the field of communication recognize that communication industry operators will inevitably adopt communication standard technology based on the demand for interconnectivity, and can then charge licensing fees to relevant market participants, thus forming a business model. Essential patents for relevant standards have become high-value patents. In the case where it is still difficult to cover all relevant market entities with standards in other industries, the cultivation of high-value patents for innovative entities still needs to adhere to targeting relevant market participants and covering technologies or products that will be widely adopted in the future. The larger the coverage, the greater the value that patents can generate.

In practice, some enterprises’ patent layout is limited to their own technology and tends to explore and select high-value patents from it. This also leads to the fact that the patent layout of enterprises can only protect their own technology or products, without laying out from the perspective of the industrial chain and the broad market to form a competitive advantage.

The author believes that innovative entities need to enhance their patent value and form a competitive advantage. On the one hand, they need to be proficient in industrial technology research and market situation research, understand the current product, technology, market and future development trends of relevant participants, and lay a solid information foundation for the cultivation of high-value patents and the realization of their future value; On the other hand, based on the research of the above-mentioned industries, technologies, and markets, we will improve the patent layout, simulate the rights of each patent, and prepare for the value enhancement of patents at the beginning of cultivation, thereby providing guarantees for the realization of patent value.

At the same time, innovative entities should cultivate patent portfolios based on industry, technology, and market conditions. Scientific and reasonable patent combinations, such as complementary patent combinations for the same product or technology, as well as alternative patent combinations, can further expand the application scenarios of high-value patents and enhance their value. In addition, innovation entities need to rely on timely updates of relevant market participants’ dynamics at different stages of patent lifecycle management, make good use of patent systems in various countries, adjust, modify or strengthen patent scope in real time and dynamically, increase same family patents or patent families, etc., so that the cultivated high-value patents can truly have vitality with technological innovation and market changes.