A new fund has been set up to help Chinese high-tech companies acquire or secure intellectual property rights (IPR), an area which has been a sore point among the local business community.
Established in Beijing's tech hub Zhongguancun, the funds are targeted to boost IPR trading and help commercialize technology in the country, reported state-run Xinhua News Agency. China is currently the world's biggest manufacturer of smart terminals, but its industry pays between 5 and 10 percent of the overall output in royalties to foreign organizations.
The new Ruichuan IPR Funds will assist Chinese tech companies acquire IPR legally and efficiently, Zhang Hongjiang, CEO of Beijing-based Z-Good Sci-Tech, which operates the fund, said in the report. "We will strive to help them grasp their rights and avoid pain from IPR conflicts," said Zhang.
Ruichuan IPR Funds is expected to secure 100 million yuan (US$16.21 million) and already has the support of local tech companies, including smartphone manufacturer Xiaomi and consumer appliance maker TCL.
The initial group of investors of the fund comprises mostly companies involved in smart terminals and mobile internet, said Zhi Binwei, deputy director with Zhongguancun's innovation promotion department under the management committee. "It creates an entirely new business model, with enterprises being the main body of market-oriented funds on IPR business," said Zhi.
Lin Peng, president of Z-Good Sci-Tech, noted: "Patent management has been important for Chinese high-tech companies in their overseas development."
Chinese tech companies are investing efforts to wash away the industry's reputation as a copycat and IPR pirate, especially as local companies increasingly look to make investments as well as acquisitions overseas.
Lenovo, for instance, in March forked out US$100 million to purchase patents from Unwired Planet, as the Chinese hardware maker looks to expand its smartphone business after completing its Motorola Mobility buyout. The patent deal comprised 21 patent categories covering 4G and LTE technologies.
Lenovo's overseas expansion strategy includes work on patent litigation and licensing, according to the Xinhua report, which added Xiaomi had applied for 1,000 patents and planned to double this number by end-2014.