Cleantech in China –IP Strategies for a Rapidly Expanding Market

China’s national energy policy is focused on cleantech. Its objectives include:

•Generating 15% of the country’s total primary energy from renewable sources by 2020

•Lowering the energy intensity of economic growth by 16% in terms of energy consumption and 17% in terms of carbon dioxide emissions by 2015.

China’s renewable energy targets will be met through:


•Nuclear fuels

•Wind power

•Solar energy

•Geothermal power

•Tidal power


Of these, hydropower is expected to provide the largest share of clean energy generation. China is the fastest growing market for wind and nuclear power generation, and is investing heavily in exploring alternative, renewable means to address its immense energy needs. With a large potential market, and strong government support for the development and adoption of new clean technologies, the China IPR SME Helpdesk says that China presents great opportunities for European cleantech SMEs.

China’s large market potential means that cleantech businesses cannot risk losing a strategic foothold in China by waiting to act. However, cleantech businesses that enter China need to understand that while good execution, effective management and access to financing is critical to maintaining a competitive advantage, protecting technology is equally important. Although technology transfer can be structured in a way that minimizes risks to intellectual property (IP), additional preparation and measures directed at the IP environment in China need to be considered as well.

How IP fits into an overall business strategy will depend on whether the firm is a start-up or a growth business, and also whether the technology itself is new and untested in the market, or mature and ‘off-patent’ (technology that is no longer protected by patent). Different businesses will use IP to achieve different objectives, such as maximizing revenue-generation by monetizing their IP portfolio through licensing, increasing opportunities for partnerships and cross-licensing or barring new market entrants.

For example, a manufacturer of wind turbine components might consider focusing efforts and resources towards obtaining patent protection of component designs because infringement by counterfeit components can be easily demonstrated and proven in court. They may then also focus on budgeting sufficiently for enforcement campaigns to actively identify counterfeiters. On the other hand, a cleantech business that has developed a biomass on-site power generation system for livestock farms, and is looking to license the technology to farms across China, may want to obtain patent protection and explore ways to ‘black box’ (i.e. to withhold or keep secret by fragmenting production) key parts of the technology. This could be done by supplying specialized equipment or by having a trusted contractor perform the installation because the technology will need to be taught to and practiced by the licensee.

Source: EUCCC, EURObiz