policy and social media are stimulating the interest for exploring IP
business models in China. SpringIP Group conducted a survey and
identified the top 3 most potential business models for IP monetization
in China in the coming years.
exploring IP business opportunities among Chinese IP professionals were
inspired by the successful stories of Getty Museum, Intellectual
Ventures or global research institutions (such as MIT), all of which
operate profitable models based on IP monetization. This interest group
was once small. However, in the past few years, thanks to the government
policy and the long-tail effect of prevalent social media, the
discussion, debate and experiments of new IP business models have
arrived at a new level within this interest group and even gone beyond
this circle to become a hot topic in the business community.
fact, as China’s IP regime is developing, more proven business models
in the developed countries now start flourishing in China. For example,
IP securitization, IP brokerages, patent-based public stock indexes,
just to name a few.
In 2019, SpringIP Group, a company
dedicated to enterprise innovation through AI and Big Data tools,
published the results of its survey about this phenomenon. Using a
framework from previous researchers (see “A Summary of Established &
Emerging IP Business Models” by Raymond Millien PCT Capital LLC and Ron
Laurie at Inflexion Point Strategy LLC), SpringIP applied its
proprietary methodology to the information and opinions collected in US
The methodology of SpringIP for this survey consists of 4 steps:
a rating (0~3) to each IP business model in US and in China
respectively to reflect the model’s current level of activity in these
two countries. The ratings were opined by SpringIP’s founders and their
peers working in IP, finance and high-tech industries.
the two ratings. A larger difference between the two ratings hints a
larger vacancy to fill in by new services. The demand for new services
is assumed to grow along with China’s industrialization, following the
path that US has travelled.
3.Adjusting the above difference
by other influential factors, including, for example, business cultures,
China’s development plans, sizes of talent pools, or levels of
professionality, etc., as essential to the success of relevant models.
Namely, a large vacancy does not necessarily mean a lager commercial
potential, if other factors are unavailable to support the grow of that
4.Assigning a conclusive rating (0~3) in light of the above analysis, with 3 standing for the most attractive opportunities.
The 3 examples below illustrate how this methodology provides useful insights on IP monetization in China.
University Technology Transfer Intermediaries as rising stars
For example, the business model “University Technology Transfer Intermediaries” presents
an opportunity vacancy (difference = 3). In addition, the Chinese
government is spending significant budges to build “innovation
ecosystems”, with reference to the successful models of MIT in Cambridge
or Sandford in Silicon Valley. As such, the survey concludes that this
business model has a great potential (rating 3).
Defensive Patent Pool continues to grow
The model “Defensive Patent Pool”
provides an example showing how an influential factor increases the
commercial potential of a particular model. This particular model does
not present a huge vacancy (difference = 0), meaning that the relevant
activity level in China is similar to that in the US. However, this
business model will continue to grow strongly, because more and more
Chinese companies are globalizing their operations, resulting in a
stronger demand for the services of defensive patent strategies. As
such, the survey concludes that this business model also has a great
potential (rating 3).
Stay away from Patent Licensing and Enforcement model
The “Patent Licensing and Enforcement”
model illustrates the influence of business cultures. In the US,
Non-Practicing Entity (NPE) (i.e., an entity which owns but does not
develop its patents like Intellectual Venture mentioned above) is a
well-established model to monetize IPs. The similar model in China is
just emerging, so the difference is large (difference =2).
such business model has no potential in China in the next 10 years for
two reasons. First, Chinese culture tends to favor harmony against
confrontation. The business community does not completely embrace the
idea of western adversary judicial system and this business model does
rely on litigation and effective enforcement. Second, Chinese courts
are acting in lines with a global trend that becomes less friendly to
NPEs, as exemplified in the America Invents Act (AIA) enacted in the US
In conclusion, SpringIP Group adopted the above
methodology in the survey and identified the top 4 most promising IP
business models in China for the next 10 years. As summarized in the
table below, these promising models include IP/Technology Development
Companies, IP-Backed Financiers, University Technology Transfer
Intermediaries, and Technology/IP Spinout Financing. SpringIP Group is
assisting several Chinese players in the adoption and effective
implementation of these business models.
Business Opportunities in China - surveyed by SpringIP Group (智汇权科技) in
2019 Legend: Levels 0 ~ 3, with 3 standing for the highest potential or
more attractive opportunities.
Jili Chung is currently working in Greater China, founding SpringIP
Group, dedicated to foster enterprise’s innovation through AI and Big
Data tools. Carlo Geremia has also contributed to this article.)