Intellectual Property Operation

         Definition 

         IPR operation is a commercial activity in which IPR rights holders and relevant market players optimize the allocation of resources and adopt certain business models to realize the value of IPR. In layman's terms, it can be understood as the process of changing from "intellectual property rights" to "intellectual property money", i.e. from rights to money. For example, patent operation refers to "activities that promote the application and transformation of patented technology through the management of patents or patent applications, and realize the value or effectiveness of patented technology." 

          Commercial Objectives 

          Obtaining cash, equity or control through IPR operation, limiting competition, gaining exclusive market share in a certain field, expanding brand influence, achieving freedom of R&D, breaking through trade barriers set by competitors, etc.

          Supply and demand transformation path 

◆Research institutions, universities and colleges→enterprises: the operation mode is generally

◆ Enterprise → Enterprise: strategic cooperation, cross-licensing, mergers (relatively few transfers occur between enterprises and enterprises, except for transfers between parent and subsidiary companies); 

◆ Individual → Enterprise: License, transfer, talent introduction.

         Operation means

◆  Direct actions, such as licensing, assignment, financing, transfer to an NPE, litigation, notice from a rival customer, etc.; 

◆ Indirect actions, including the formation of patent pools, patent alliances, NPEs, de facto standards organizations, etc.

         Operation model 

         1. License: Take a patent as an example, one of the conditions for the grant of a patent is "utility", that is, the technical solution requested to be protected by the claim must be capable of being implemented; however, the essence of patent rights is exclusivity, not exclusivity; to implement a patent, it is necessary to obtain permission from the patentee, which is the legal basis of the licensing business. Licensing is currently the main form of operation in the operational market. In particular, patent owners and other right holders may contribute to the target company by way of exclusive license and become shareholders of the target company. 

         2. Transfer: By taking patent as an example, in addition to licensing, transfer is one of the main elements of technology trade or technology import and export, and is also the main form of operation. In particular, some market players may arrange a series of asset acquisitions by way of transfer for the purpose of control, which is typical in the manufacturing sector such as automotive and telecommunications. 

         3. Investment: In the case of patents, for example, the patentee may invest in a limited liability company and/or a company limited by shares and/or a limited partnership and/or a general partnership, and obtain the corresponding equity and/or shares and/or shares of property. 

        4. Financing: 

        (1) Pledge financing: In the domestic context, for example, it is more common to pledge financing for the exclusive right to register a trademark. There is no shortage of cases in which enterprises around us have obtained RMB10M credit by pledging the exclusive right to register trademarks. 

        (2) Trust financing: Given the core function of the trust system, in addition to its administrative function, the use of trusts is a core function. In Europe, America and other countries and/or regions where IP and finance are more developed, the IP trust system has been developed in a more mature manner, and the supporting institutional arrangements such as trust registration are also more perfect; however, in China, it is still in the market cultivation stage. About six months before the enactment of the Trust Law, Wuhan International Trust and Investment Company (which changed its name to Founder East Asia Trust Co., Ltd. in 2010) launched a patent trust business on October 25, 2000, but it did not develop smoothly due to the negative attitude of Wuhan International Trust and Investment Company towards the project at that time and the funding problem. However, due to the negative attitude of Wuhan International Trust and Investment Company towards the project at that time and the funding problem, the development was not smooth. IP trusts are an irreversible development trend. Based on the policy guidance of the government and the combined efforts of intermediaries such as law firms, trust companies and appraisal companies, the market may gradually mature after a certain stage of cultivation. 

        (3) Asset securitization financing: Similar to the case of IP trust, IP asset securitization has been developed in Europe and the United States and other countries and/or regions where IP and finance are more developed; however, in China, it is still in the market cultivation stage. On 15 March 2013, CRSC promulgated the "Regulations on the Administration of Asset Securitization Business of Securities Companies" (repealed by the "Regulations on the Administration of Asset Securitization Business of Securities Companies and Subsidiaries of Fund Management Companies" promulgated by CRSC on 19 November 2014); on 30 March 2015, the State Intellectual Property Office promulgated the "Opinions on Further Promoting the Work of IP Financial Services"; the aforementioned regulatory documents have unblocked institutional barriers to IP asset securitization. If the valuation issue can be effectively resolved and intermediaries such as law firms, securities companies and valuation companies can enhance coordination and communication, the development of IP asset securitization in China can be accelerated.