For the officials of the city of Dongying, home of China`s second largest oil field, the ongoing global financial recession has made it more than apparent that intellectual property is the key to surviving the economic downturn.
As the leading oilfield equipment manufacturer in China, Dongying, a coastal city in east China`s Shandong province, was inevitably damaged by the global economic recession. However, it was those companies producing low-technology, low-added-value products that faced closure, whilst those focusing on R&D and innovation were not only surviving but actually flourishing.
Commenting on the apparent anomaly, Liu Renhao, director of the Dongying Municipal Intellectual Property Office, said: "The financial crisis only affected business that failed to innovate. As a result we realized that the protection of intellectual property (IP) is a crucial measure in improving regional competence and regulating market competition."
The city drafted a strategy to promote intellectual property in 2008 and has established an IP management commission headed by the deputy mayor. As a result, Dongying is now an important component of the Yellow River Delta Development Strategy and home to a number of world-class companies, including the China National Offshore Oil Corporation, IBM and DuPont. To cope with this major business influx, an assistance center for IP protection and consultation on IP issues was established last August.
As the companies in Dongying had previously been largely small-and-medium sized companies with low investment in R&D, the city brought in research staff from a number of renowned universities to bolster its resources in this sector.
In April 2004, its provincial IP authorities approved a plan to build a technological innovation center in Dongying, with the backing from the China University of Petroleum, the Dongying municipal government and the Shengli Oilfield. The center, which is focusing on technologies in the oil drilling, refining and petrochemical industries, has boosted R&D capabilities in Dongying.
So far, the center has filed 950 patent applications and the number has grown by 25 percent a year for the past three years.
After years` of continuous improvement, Dongying now has one county acknowledged as the model county for IP protection in China and 52 companies that have become leading performers for patent applications across Shandong Province.
Among the 791 major companies in Dongying, 25 percent of them have now filed patent applications and put the patented technology into use.
Guangrao county was one of the best performers in terms of IP protection in Dongying and was selected as one of China`s pilot demonstration projects for IP protection this year. Since 2005, Guangrao has filed 1,095 patent applications, 586 of which have been approved, whilst 653 of them are now in everyday use and dozens of them have received national and provincial awards.
The local government spends 1.2 million yuan annually to promote IP protection and has set aside 0.2 million yuan every year to assist patent applications. This fund has helped 117 new innovations to receive patents and these technologies, in return, have helped to create 5.93 billion yuan more in additional income.
In addition, Guangrao has stepped up efforts to improve its intellectual property policies and has enhanced its policing of infringement claims
The county has established cooperative ties with 91 companies and 59 universities and research institutes, allowing it to import professional expertise and develop technologically innovative projects. So far, Guangrao has developed a total of 83 new inventions, 41 of which have been utilized in production.