(Yicai) Aug. 5 -- China has called for intellectual property protection rules for algorithms, artificial intelligence-generated works, and issues related to the development of the platform economy to be improved over the next five years amid the rapid development of emerging and future industries.

Setting protection rules for data IP should also be explored, according to the five-year IP Protection and Utilization plan released by the State Council, China's cabinet, on July 31. The plan further calls for strengthening research on open-source IP agreement rules and supporting the establishment of domestic open-source communities.

Forming such rules cannot be achieved overnight, Xiao Youdan, a researcher at the Institutes of Science and Development under the Chinese Academy of Sciences, told Yicai. "The rapid iteration of technology in emerging sectors and the complexity of business models make it quite challenging to advance them."

Taking AI as an example, the difficulty in formulating rules lies in the boundaries of rights related to AI-generated works, Xiao noted. "Whether the generated content is protected, who holds the rights, how to determine the relationship between the training data and the output results, and how to allocate responsibilities among platforms, model developers, and users all lead to controversies."

The difficulty in creating rules related to open source lies in how to strike a balance between open innovation and commercial compliance, he stressed. "Open source is not simply about 'free use.' It is a set of conditional rules for technological collaboration."

A more realistic approach is to first establish actionable rules in key areas, gradually advancing through case studies, pilot programs, industry standards, and international negotiations, according to Xiao.

Lifting China's IP Market

The plan requires that China's overall strength and global competitiveness in IP will be further improved by 2030. It emphasizes stronger IP protection, a more pronounced market value, higher quality public services, a more efficient comprehensive management system, deeper international cooperation, and decisive progress in building a strong IP nation.

The more pronounced market value goal "means that in the next five years, there will be a greater emphasis on whether IP can be recognized, priced, and verified by the market," Xiao said.

"The evaluation logic of IP has changed," Xiao pointed out. The focus in the past was more on "how many rights there are," such as the number of patent applications, grants, and trademark registrations, but in the new plan it is on whether these rights can generate market value, whether they can be transformed into products, support value-added in industries, facilitate financing, enable licensing transactions, and participate in global competition, he noted.

The shift will guide local governments, tech innovation firms, and research institutions to make corresponding changes, Xiao said, adding that for local governments, the policy focus will shift from simply rewarding the quantity of patent applications to building platforms for the transformation of IP, financial services, price discovery mechanisms, and industry application scenarios.

For tech innovation companies, IP will not only be a legal asset but also become an important tool for financing, competition, global expansion, and standardization, Xiao noted. For universities and research institutions, there needs to be more focus on the industrial prospects and potential for transformation of patents even before applying for them, while they should not apply for patents solely to meet quantity targets, he stressed.

In addition, the plan calls for the cultivation and exploration of high-value patents and patent portfolios around core tech in key areas. It emphasizes strengthening the patent layout and overall management of IP throughout major tech innovation projects.

China's plan shows that IP is no longer just about securing rights protection for innovative achievements, but rather it has been advanced into major scientific and technological tasks, core tech breakthroughs, and industrial layout process, Xiao said. Its policy role is shifting from protected outcomes to an important factor in "supporting supply," he added.

Editors: Tang Shihua, Martin Kadiev