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'Patent Pool' initiatives in manufacturing clusters in Zhejiang
Haibo Bao
Associate Professor, Zhejiang Administration School, Hangzhou, China
Minghua Xu
Director, Soft Science Institution, Zhejiang Administration School, Hangzhou, China
Shulin Gu
Tsinghua University, Beijing, China
Abstract
Based on a case study of the IPR (Intellectual Property rights) pool in the lock industry, Wenzhou, Zhejiang Province, China, this paper examines the formation and operation in which producers collectively take action in regularization and management of innovative knowledge in small firms-dominated manufacturing clusters there.
The study compares this emerging collective IPR management with patent pools in advanced economies, especially the United States, and explores the characteristics of IPR Pool in Zheijiang manufacturing clusters.
First, the essential rationale for collective action lies with the need for the survival and further development of the emerging rudimentary industry, as compared to than mature or well-developed industries.
Second, innovative knowledge regulated to protect the IPR pool is substitutive rather than complementary, and informal rather than formally granted by the IP administration as in advanced economy counterparts.
Third, the local producers association plays a major role in institutional development for IPR regulation, while patent pools in the United States are alliances of members with no geographical proximity ties. The Zhejiang IPR pools example provides the necessary steps for latecomer manufacturing clusters to learn about intellectual assets and fair competition.
Keywords
patent pool, IPR pool, manufacturing clusters, Zhejiang, IPR protection
Article Text
Patent pool is a collective institution for intellectual property rights (IPR) sharing and transaction. This paper aims to introduce the IP pooling phenomenon appearing in small firms-dominated manufacturing clusters in Zhejiang Province, China. The study is a sister piece to that reported in Xu, Chen and Bao (2006, this issue). While the work by Xu et al focuses on formal patenting behavior of firms in Zhejiang, this work gives particular attention to informal, cluster or community-based knowledge sharing and protection initiatives; that is, firms in a cluster collectively take action in regularization and management of innovative knowledge and relative production and marketing.
Zhejiang is on the southeast coast of China. With the limited arable land, mineral deposits and industrial investment in the planned economy period, in the past twenty years Zhejiang has developed the most market-oriented private small firms in China, employing some 10 million workers. Most firms are engaged in labor-intensive 'low-tech' manufacturing and, often, similar businesses are clustered in a certain geographical area of 'Town' or 'County', the lowest levels of administrative unit in China, with varying degree of vertical disintegration in division of labor among firms. There are 500 or so such specialized clusters in Zhejiang, producing socks, cloths, footwear, carpentry, low-voltage apparatus, ties, water pipes and valves. This paper discusses the IP pooling phenomenon in Zhejiang with a detailed case study of the lock industry in Wenzhou, Zhejiang.
Section 1 introduces patent pools in advanced economies, especially in the United States. Sections 2 presents and interprets patent pool practice in Zhejiang, using a detailed case study. Section 3 discusses findings and raises research questions for further study.
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