Shanghai is to take steps to rebuild its enterprise brand in order to strengthen its position on the world stage, according to participants at a recent symposium on intellectual property rights (IPR) and enterprise remodeling.

The symposium, held on June 20, was part of the 2005 Shanghai Science and Education Forum.

Need for big patent budget

“We searched all of Shanghai looking for a patent agent familiar with bio-pharmacy and international patent rules, but we couldn't find one,” lamented Yu Zhengwei, chief engineer with Fudan-Zhangjiang Bio-pharmaceutical Co. Ltd.

Fudan-Zhangjiang has successfully applied for over 100 local patents. But, it needs international patents if it wants to enter the international market. All their applications to date have failed.

“Patent agents don't understand our technology. We've had to draft all application documents on our own,” Yu explained.

Addressing the forum chair, Joseph E. Rogers, intellectual property director with Alcatel Shanghai Bell Co. Ltd, Yu said: “Mr. Rogers, you are an outstanding patent agent, but you are too expensive.”

According to Rogers, no effort should be spared when looking for suitable intellectual property talent because this person is too important. In his company, the IPR budget is the second highest of all the R&D departments.

Emphasizing the importance of patents, Rogers said that a patent not only fights off rivals, they also actually prevent rivals from using their patents against you. Further, applying for a patent involves not only a company's intellectual property and R&D departments, but also the marketing department.

These were progressive statements in the light of Shanghai's fledgling patents market.

Drawing lessons

One of the speakers at the symposium, Su Yong, director of the business management department at Fudan University, said: “I once asked my students what brand of watch they were wearing and found that only one out of 50 students wore a made-in-Shanghai watch.”

Su explained that local enterprises haven't adequately challenged the overpowering competition from international companies. More important, Shanghai's culture has much to do with its lack of any effective competitive branding strategy.

“Shanghai is a migrant metropolis, with no deep-rooted or longstanding history and culture. Consumers prefer foreign brands, which is embarrassing for Shanghai enterprises. Moreover, Shanghaiers believe they are superior to others. Young people aren't generally willing to work outside of Shanghai, and neither are enterprises. Yet, at the same time, there is the constant complaining about how rules outside of Shanghai differ so widely,” Su said.

"The only way to solve the dilemma is through the science and education strategy,” Su said. Knowledge management is a key factor in establishing a brand. More important, a home-grown brand, with an independently developed IPR system.

Governmental support

Liu Min, director of the Circulation Department of Shanghai Economic Commission, released related governmental information, including both good and bad news.

“By the end of last year, the intangible assets of 422 famous brands in Shanghai were valued at 110 billion yuan (US$13.3 billion), three times that of 1995; sales income and amount of profit reached 460 billion yuan (US$55.6 billion) and 85 billion yuan (US$10.3 billion) respectively. The implementation of a basic brand strategy has resulted in prominent economic returns,” Liu revealed.

However, the average value for each of the 422 brands was only 260 million yuan (US$31.4 million), just 3.2 percent the value of the world’s top 100 brands.

Liu also revealed that the municipal government will work out a program of action to promote local brands and build a multi-tiered strategy this year. Meanwhile, the industrial and commercial administration, quality supervision bureau, intellectual property administration and the Shanghai Municipal Commission of State-owned Assets Supervision and Administration will cooperate to publicize and promote the brand building strategy.

“We are going to have 20,000-30,000 brand operators, consultants, and trainers trained each year, cultivate and import a batch of intermediary firms specializing in brand consultation, evaluation and plan in order to improve the intermediary service system,” Liu said.

(China.org.cn by Zhang Tingting, June 28, 2005)