1 Introduction

IP is an important tool to support, drive and facilitate the progression of technology and industrial development, and can have a direct positive effect on the market competitiveness of enterprises. However, IP is not the only type of property asset with value that is created from knowledge, as process innovation, and market behavior among other assets need to be considered. According to the concept and categorization defined by the World Intellectual Property Office (WIPO), IP refers to creations of the mind, and includes inventions, literary and artistic works, designs, symbols, names and images used in commerce, which all enable individuals to earn recognition or financial benefit from what they have invented or created.

Many scholars have studied the role of invention patents in relation to technological innovation and enterprise development, and generally conclude that invention patents are the most important indicator of regional science and technology capacity, and in driving industrial economic development (Liu and Buck 2007; Tsai et al. 2009; Malo 2009; Jin et al. 2012). However, comparatively far fewer papers have elaborated on the effects of non-invention patents and other forms of IP, such as trademarks, copyright, designs, geographical indications, and utility model patents, on market value, industrial innovation and economic development.

How does a patent, other than an invention patent, affect regional economic development? Is it more helpful to facilitate agricultural, forestry, tourism and leisure, and small-scale processing industries than an invention patent? Should localities with comparative advantages in light industry blindly follow central Chinese government policy advice by facilitating and promoting invention patents while ignoring the reality of their specific regional situation? Considering these questions, the key issue that we will consider and address in this chapter is how the appropriate form of IP may drive light industry development.

The objective of this chapter is to provide a better understanding of how regional governments use the various forms of IP to accelerate industrial development while taking into account their local conditions. Considering the fact that different regions have different modes of industrialized development, we have proposed a new development path, which is suitable for regions that are less industrialized and rich in natural resources. We construct and propose the theoretical concept of light IP, and analyze whether light IP is driving regional green economic development in Lishui Prefecture of Zhejiang Province. After studying the operational strategy concerning the light IP required by regions rich in natural resources and agricultural enterprises, we present our strategic thinking that light IP can drive regional green economic development, and can help address the contradictions between economic development and environmental degradation.

The chapter is organized as follows: Sect. 12.2 presents the different forms of IP required by different industries; Sect. 12.3 discusses the concept and connotation of light IP; Sect. 12.4 describes the economic decentralization and the government’s IP-conditioned incentives in China; Sect. 12.5 details the research methodology; Sect. 12.6 focuses on the case study of light IP driving green growth in Lishui Prefecture; and Sect. 12.7 concludes and offers policy recommendations.

2 Different Types of IP for Different Industries

2.1 Invention Patents Promoting Economic Development

Following information retrieval and a technical review by the State Intellectual Property Office (SIPO), any invention for which an invention patent right in China is granted benefits from a 20-year period of protection, and must possess novelty, inventiveness and be capable of practical application. During the period of protection, the owner has the exclusive right to transfer, license, authorize, or abandon the patent. Additionally, the patentee is required to pay an annual fee for maintaining the patent protection. In China, utility models and registered designs are also considered to be patents, and their importance to the concept of light IPR is discussed in the next section.

Invention patents are closely related to the development of industrial and technical enterprises. Furthermore, invention patents have acted as the key performance indicator of regional science and technology capacity, and indicate the potential development and market competitiveness of a particular enterprise (Tsai et al. 2009; Malo 2009; Jin et al. 2012). One study concluded that invention patents are an imperfect measure of the total level of innovation in a given district (Furman et al. 2002). However, another study concluded that the number of patents can also be taken as an indicator of research productivity, despite the wide skepticism (Rassenfosse and Potterie 2009). The number of inventions owned can be used as an indicator of industrial innovation and technology advancement. Based on a review of the relevant literature, invention patents have been found to promote regional economic development as indicated by technology transfer, knowledge accumulation and legal protection.

Invention patents play a crucial role in the rapid development of certain industries, and especially in the chemical and pharmaceutical industries and sophisticated machinery industry.Footnote 1 One study found that invention patents and trade secrets were used by large chemical companies to protect new chemical products, and capture the market in the 19th century (Arora 1997). For the pharmaceutical industry, invention patents are essential. Without patent protection for a newly developed drug it would be impossible to recoup the significant investment necessary to bring the new drug to market (Luthi and Brice 2015). Invention patents are also important for industries concerned with the development of sophisticated machinery (Karvonen et al. 2016; Petroni and Panciroli 2002).

An increasing number of invention patents and regional knowledge accumulation and technology transfer will accelerate growth in industrialized regions and enhance companies’ competitiveness. When analyzing the relationship between the number of invention patents held and the knowledge variance and performance of a company, one study found that the number of invention patents can indicate a company’s degree of innovation, and can assist companies in creating new products and for new markets. This can be termed ‘combinatorial innovation’ (Li et al. 2014a). From the above, it can be seen that knowledge of an invention has a positive consequence on a company’s performance.

The commercial activities of regional technological companies are effectively supported by the invention patent granted (Johnson and Liu 2011). In order to protect an inventor’s property, the government provides a legal institution for protecting inventions and provides measures for law enforcement. The patentee has the exclusive right to manufacture, sell and use the invention patent, which facilitates the commercialization of scientific and technological achievements. This explicit invention patent right and enforcement protection helps researchers to utilize their invention patent, contributing to technology innovation, transfer and industrialization.

Although inventive activity has a significant effect on regional technological and economic development in developed regions, it has only a limited influence in developing regions. A study exploring the different effects of technology innovation capacity on regional economic growth found that the number of invention patent applications has a weaker impact on regional GDP growth than utility model and design applications, and the same effect is observed when considering industrial added value (Zhu and Zhang 2005).

As further discussed in the next section, there may be two main reasons why invention patents play different roles in improving the economy in developing and developed regions. Firstly, developed regions have an important advantage over developing regions as they are more capable of absorbing patent information, resulting in a greater accumulation of knowledge and technology. Secondly, invention patents are preferred by companies in developed regions compared with companies in developing regions. Due to a lower level of IP protection and enforcement in developing regions, the practice of copying and counterfeiting will discourage investment in technological development, leading to less technological achievement and commercial innovation.

2.2 Regional Development Through Specialization, and Utilization of Other Types of IP

Different types of IP have different economic impacts on different industries. Various forms of IP, other than invention patents, can enable sustainable economic development and social well-being in some developing regions. These regions may have a strong comparative advantage in the areas of agriculture, forestry, tourism and leisure, art and handicrafts, and small-scale processing industries distinct from the chemical and pharmaceutical industries. They may particularly benefit from IP outside invention patents, such as utility models and design patents, trademarks, geographical indications, and copyrights.

Other forms of IP have two prominent advantages over invention patents in developing regions. Firstly, they are cheaper and take less time to obtain and require a lower threshold of knowledge. Secondly, because the technical content is low, it is easier to identify and establish whether IP has been counterfeited or infringed. As mentioned below, these other forms of IP can have a close relationship with natural resources and traditional culture, both of which share particular geographical properties. Therefore, these other forms of IP can have geographical characteristics but little technical content to be identified and understood. As a result, these other forms of IP appear to be more suited than invention patents in terms of the lower degree of knowledge innovation required, and their ability to provide legal protection.

Different forms of IP have distinct effects on regional economic development.Footnote 2 In one study the correlation between technology innovation and economic growth was examined, using panel data from 31 provinces from 1985 to 2004 (Huang and Yu 2007). Some interesting results were found: utility model patents have the greatest impact on regional economic growth, with design patents coming second and invention patents having the least impact. In the context of a lack of investment into independent R&D and innovation capability, the findings of another study also show that utility model and design patents are more advantageous in encouraging technological progress (Xia et al. 2012).

Geographical indications have a prominent role in both the macro and micro aspects of modern agriculture. From the macro perspective, by constructing a regression model using data from the second national geographical indication research project, it was found that geographical indications contribute to agricultural economic development, specialization and scaled production (Li et al. 2014b). From the micro perspective, using a case study of Guanxi’s pomelo industry in Pinghe, Fujian Province, the deep impact of geographical indications on the county’s economy was emphasized, which demonstrates that they are essential in conserving the local ecological system, the regional historical tradition, and cultural psychology (Sun 2012). Additionally, trademarks and copyright also have a promotional effect on the food and beverage economy and the development of enterprises.

Traditional knowledge, trademarks, and copyrights are important in driving relevant industries forward in developing countries. Therefore, developing countries should seek to protect these forms of IP. Several authors believe that with the help of IP protection, traditional culture and art and handicrafts, are powerful factors in promoting regional economic development (Zhou and Wang 2011). Other authors state that trademark and geographical indications play a crucial role in transferring resource advantages into market advantages (Li and Dong 2009). A further study illustrates that the culture and art of the She ethnic minority is an important and crucial asset in attracting tourists and in selling their unique art works all over the world, thereby driving regional economic development, which in turn will help to protect and preserve traditional culture and knowledge (Wu et al. 2003).

In conclusion, we find that various forms of IP, other than invention patents, can be more efficient in protecting agricultural trade, a company’s brand, and traditional knowledge. It is also understood that agricultural and forestry product processing companies also prefer these other forms of IP, mainly due to the low barrier of entry and the high strength of legal protection that they confer.

3 The Concept of ‘Light IP’

Through a theoretical study of the relationship between IP and regional industrial economic structure, we have found that invention patents have a significant positive effect on heavy chemical, pharmaceutical, and sophisticated machinery manufacturing industries, while other forms of IP not only efficiently drive the development of the agricultural and forestry product processing industries and other light industries, but also promote the protection of the natural environment and traditional culture. Considering the properties and applications of these other forms of IP, we have proposed the new concept of ‘light IP’, which represents a new path to growth, and a new opportunity to apply the government’s IP development strategies to develop regional light industry.

Light IP rights can be considered as a form of IP rights providing protection when industrial external-design,Footnote 3 regional traditional resources (including natural resource and human culture) are to be commercially exploited. The scope of light IP includes the main forms of IP, other than invention patents. Namely, these are design patents, geographical indications, trademarks (including community trademarks and certification marks), copyright, trade secrets, utility model patents, and new plant varieties.

The name ‘light IP’ was chosen because the targets to be covered and protected by light IP are those found in the light industries, traditional knowledge, and the natural resource and forestry processing industry, and not in heavier industries with higher technological advancement entry barriers. In terms of the application and grant procedures, light IP applications generally do not require a particularly substantive examination. Furthermore, in terms of resource usage, light IP typically requires less investment in manpower and material resources to fund product and service research and development and enable IP protection. Light IP is different to invention patents, as the latter concern high technology, strong innovation and large investment into R&D. Invention patents are more embodied in physical technology and innovation equipment, while light IP, such as copyright and trademarks etc., is reflected in ideas, signs and through other mediums.

In general, light IP reflects the attributes of lower investment into R&D, in terms of typically shorter examination timelines, and the relative ease of identifying infringement compared with invention patents. As such, they are typically easier to protect under the law. The agricultural and forestry product processing industries, as well as some other light industries, are dominated by small and medium-size enterprises. Therefore, these enterprises with typically low R&D investment, will favor light IP, which will help to protect their intangible assets.

Based on the typical path of development of enterprises in regions that are rich in natural resources and less heavily industrialized, we propose the concept of light IP. In districts specializing in the heavy industries, particularly those mentioned in Sect. 12.2.1, IP strategy tends to involve invention patents and utility model patents. This ‘technical IP’ is useful in renewing technical equipment, promoting the application of technology, and in exploiting new products. In contrast, in districts that are less heavily industrialized and have limited heavy large-scale industrial capability but are rich in natural resources, the regional IP strategy has to rely on light IP. This includes trademarks, copyright, geographical indications, design patents, new plant varieties, and perhaps utility models patents, and aligns with the demand of regional industries, and will help drive regional industrial development and protection of the environment.

4 IP-Conditioned Government Incentives in China’s System of Economic Decentralization

According to geographical location and culture, China is divided into three regions: the east, middle, and west regions. Regional divisions also exist when considering economic development. In first position, the per capita GDP of Tianjin City reached 116,700 RMB in 2014, which is twice that of 11th-placed Jilin Province with 50,200 RMB, approximately three times that of 21st-placed Heilongjiang Province with 39,200 RMB, and more than four times that of 31st-placed Gansu Province with 26,430 RMB.Footnote 4 In addition, differences in natural resources, and historical and cultural factors have exacerbated the imbalance in regional economic development.

It is difficult for the Chinese central government to issue a uniform science and technology policy that is fit for every region, due to the large territory of the country, different economic levels, and different domestic cultures. This has resulted in the creation of a system of economic decentralization, whereby regional governments can often decide how exactly they want to implement the industrial policies made by the central-government, amending and adjusting them to their own local needs and capabilities. Nonetheless, some local governments simply blindly follow central-level government IP policy, ignoring local science and technology capacity, industrial development and the cultural environment in their region, which can lead to a sub-optimal and even negative influence upon the harmonious development of the economy and society.

In order to guide the development of a national innovation system, the National IP Strategy 2014–2020 was recently issued by the central government. The expected targets of the National IP Strategy were set, with the predominant aim of improving the number of invention patents. However, that being said, geographical indications, trademarks, new plant varieties, copyright, and design patents are also generally suggested as tools to drive the development of modern agriculture and an upgrading of the industry. The central government has advised regional governments that in order to implement the National IP Strategy 2014–2020, they should undertake appropriate measures to create, manage, utilize, and enforce IP in order to develop local industry.

Lishui Prefecture, which is one of cities in Zhejiang Province and rich in natural resources, traditional knowledge and ethnic culture, has issued many policies directed and tailored to its own local needs to promote light IP by using tax reduction, fiscal subsidies, and public preferential procurement. For example, in order to protect rare mushroom resources, the local government actively provides support to local industry associations so that they can apply for a national famous trademark and a geographical indication designation. Local government and IP offices have garnered support from SIPO to obtain for the prefecture the title of ‘National IPR Model Pilot County of Traditional Knowledge’ in relation to famous traditional arts and crafts, such as ‘Longquan celadon’ and swords. We use the light IP strategy of Lishui Prefecture as a case study to demonstrate that local governments can and should choose an IP strategy that is appropriate and tailored to local circumstances to drive regional industrial development, rather than simply blindly following central government policy that is not completely suited to local conditions.

5 Methodology

It is difficult to analyze the relationship between light IP and the regional development of certain industries, such as agriculture, forestry, tourism and leisure, furniture, arts and handicrafts, and small-scale processing industries in China, from a macro perspective. Given that China covers a vast geographical area, using national-level data to analyze the relationship between light IP and industry-driven prosperity inevitably ignores the regional economic disparities in China and will lead to improperly informed conclusions. A reasonable method to robustly analyze the relationship between light IP and industrial development is to identify a specific region for case study analysis, taking account of socioeconomic and eco-environmental factors. In light of these considerations, Lishui Prefecture was selected as the basis for the case study in this chapter.

More specifically, Lishui Prefecture was selected for two main reasons. Firstly, Lishui Prefecture is not heavily industrialized, and it has rich ecological resources and traditional knowledge. In line with the concepts discussed in Sects. 12.2 and 12.3 above, these circumstances make Lishui an ideal location in which to attempt a light IP-driven development strategy. Secondly, the Lishui Prefecture government adjusts the central government’s science and technology policy to adapt to the needs of local industry and cultural development, while being mindful of the importance of avoiding significant environmental degradation. Some of these policies can be generally considered as forms of IP-conditioned government incentives, the topic of the book in which this chapter is published. In line with the concepts discussed in Sect. 12.4 above, taking advantage of the economic decentralization afforded to regional policymakers in such a way can help ensure the ultimate effectiveness of Lishui’s regional development policy.

Company-level interviews and interviews with government officials at the local science and technology department in Lishui are used as the main data sources for our case study. We conducted more than 32 on-the-ground and in-depth interviews with local entrepreneurs and companies identified by the local government as operating in dominant industries and importantly contributing to economic and cultural development in Lishui. The semi-structured interviews focused on how managers use their IP strategy to promote enterprise development and which forms of IP play a crucial role in their business operations. These interviewees operated in the agricultural, furniture, arts and handicrafts and small-scale materials processing industries. The statistics in Sect. 12.6 provide more details on the importance of these industries and companies. We also interviewed more than 35 government officials in charge of science and technology policymaking and administration in Lishui about regional IP strategy and the coordination of central government IP polices and the local economic situation.

In addition, a range of economic and IP statistics were collected from government databases. These were analyzed to provide a quantitative context to the case study.

6 Case Study Examining Light IP as a Driver of Green Growth in Lishui Prefecture

6.1 Current Status of Lishui Prefecture

When studying the relationship between IP and regional green economic development, we found that Lishui Prefecture, with the highest percentage of forest coverage and making up the largest area in Zhejiang Province, effectively uses light IP to facilitate green economic development. Nestled between the Oujiang River to the south and surrounded by mountains on all sides, Lishui is situated in the southwest of Zhejiang Province. Lishui Prefecture administers two cities, Lishui and Longquan; one district, Liandu; and seven counties, Qingtian, Jinyun, Yunhe, Qingyuan, Suichang, Songyang, and Jingning Autonomous County of the She minority people. In total, Lishui has a population of 2,506,600. The prefecture is bordered by Fujian Province to the south, and Wenzhou to the southeast. The region of Lishui is mainly covered by low mountains and rolling hills. Of the 17,298 km2 making up Lishui, 88.42 % is mountainous, 5.52 % is farmland, and 6.06 % is comprised of roads, villages, and streams. The local area is rich in traditional culture, crafts, agricultural and forestry resources, and tourist-related natural resources.

In 2013, the GDP of Lishui Prefecture had reached 98.31 billion RMB, and the per capita GDP was close to 464,000 RMB. In terms of industrial structure, the shares of the primary, secondary and tertiary industries that make up the GDP are 8.6, 50.6 and 40.8 % respectively, and they have all been stable over recent years. The proportion of agricultural products in the primary industry is as high as 65.11 %. Furthermore, the scale of forestry products, animal husbandry and fishery products is 16.2, 16.1 and 1.8 %, respectively. Manufacturing enterprises have been transferred mainly from Wenzhou Prefecture of Zhejiang Province, and the industry is dominated by small and medium enterprises. The added value of tertiary industry has contributed up to 41 % of the city’s GDP over the last 10 years. Tourists are mainly domestic, and represent 99.4 % of all tourists. The tourism industry has maintained its rapid growth, but the origin polarization effect also exists: domestic tourists spend 502.6 RMB per head while each foreign tourist spends 14,707.3 RMB.

The local government has enforced its development concept ‘Nature is the true treasure’. The development of environmental industries has become important. These industries specialize in agriculture, forestry, tourism and leisure, furniture, arts and handicrafts, and also include the small-scale processing industries. The main industries of each district of Lishui Prefecture can be seen in Table 12.1.

Table 12.1 The district distribution and the dominant industries of Lishui Prefecture in 2013
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The dominant industries of each county were identified according to their contribution to the county’s GDP, and can be seen in Table 12.1. Tourism is the important industry in supporting the regional economy of Longquan City, Yunhe County, Qingtian County, Songyang County and Jingning She Autonomous County. Typical products produced by Lishui Prefecture’s primary and tertiary industries include wood, agricultural, and ethnic cultural products. Furthermore, we found that the most common dominant industries of every county are mainly those belonging to the natural tourist resource, the agricultural and forestry resource processing, and the traditional culture industries. While metal processing, machinery, and a few other industries are also important, they are only important to a lesser extent.

Figures 12.1 and 12.2 show the number of patent applications and granted patents over a recent three-year period. The total number of applications and granted patents (invention patents, utility model and design patents) is increasing, and the average rates of increase are 36.14 and 48.72 %, respectively. At less than 8 %, invention patents comprise a small proportion of the total number of patents, and an especially small proportion of the number of granted patents, which have experienced relatively no growth over the three-year period. Utility model patents make up the highest proportion of the total number of patents, which includes both applications and granted patents. From Figs. 12.1 and 12.2, we can calculate that design patents rank second to utility model patents, in terms of number. The average annual growth rate of most recently granted design patents (61 %) is higher than that of the most recently granted utility model patents (18 %), and much higher than the number of granted invention patents (only 1 %).

Fig. 12.1
figure 1

The number of patent applications in Lishui Prefecture from 2011 to 2013. Source Data collected from Lishui Prefecture Science and Technology Office

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Fig. 12.2
figure 2

The number of granted patents in Lishui Prefecture from 2011 to 2013. Source Data collected from Lishui Prefecture Science and Technology Office

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Comparing Table 12.1 with Figs. 12.1 and 12.2, the relationship between the dominant industries of each county and the number of patents can be identified. Utility model and design patents are two forms of patent that contain a comparatively low level of technological innovation. As important components of light IP, applications for utility model and design patents by local enterprises are suitable for economic needs. In addition, the number of utility model and design patents is also increasing with the development of light industry.

6.2 Light IP Promotes Economic Development

The prosperity of enterprises determines how investable they are, and is a good indicator of the regional economic development of Lishui Prefecture. Because enterprises are responsible for regional economic development and also for creations of the mind, IP can therefore provide an important guarantee for companies, and legal protection of their technological innovation. Amidst the arrival of the ‘new normal’ in China, market competition is increasing every day. IP is not only an effective tool for companies to use to defend themselves against third party misappropriation of their assets, but it can also be one of several important tools used by an enterprise to develop new products and compete, which is an essential part of a successful business operations strategy.

In considering an application to register IP, enterprises will fully take into account the costs and benefits that the IP may provide. To maximize profits, companies will apply for the most appropriate form of IP in order to enlarge their market share. In this regard, they will consider factors such as cost, how to best safeguard their rights, and their economic interests. In addition, IP rights are a form of intangible assets. When companies are awarded IP, they not only use their technical knowledge to manufacture and develop new products, but they should also maximize the economic benefit through a variety of methods, such as licensing and pledge financing, for example. Based on the research above, we conclude that the characteristics of light IP make it more fitting than invention patents to enterprise development in Lishui.

Because of variations in natural resources and industrial agglomeration, the IP strategies of different regions show differentiation. For the regions where light industry is dominant, light IP can be an important part of the regional strategy and can cultivate modern industry that is suitable for the demands of economic development.

Through our interviews, we have found that enterprises have improved their light IP strategy in order for it to be effectively utilized for developing products, participating in market competition, and gaining further market share. Companies with a high share of the export market tend to be more concerned about light IP in the course of their operations in the market, such as design rights and trademarks. The local government in Lishui gradually realized that IP should be suitable for the needs of local enterprises. With the support of the government in Lishui, some agricultural associations were founded to apply for geographical indications and collective trademarks, which contribute to the added value of products and improve market competitiveness. Both utility model patents and design patents play an important role in protecting production facilities and in making improvement to packaging for the trade of products.

When considering the protection of light IP, Lishui’s enterprises adopt a variety of strategies, which can include collaboration concerning local technology and business administration. For electronic commerce tort violations, enterprises can make full use of light IP infringement characteristics. For example, such violations are easily found and identified, and cooperation with the business platform leads to safeguarding the legitimate rights and interests of enterprises.

Most of Lishui’s small and medium enterprises specialize in light industry, such as services, forestry and agriculture, and resource manufacturing. The number of large enterprises with heavy industry and high-end equipment manufacturing is low due to dynamics in the economic base and natural resources. These reasons have led to particular IP applications and IP enforcement strategies being adopted by Lishui enterprises, which place more emphasis on the operational management of light IP. To analyze the operational IP situation, information on the business situation of the largest ten enterprises in Lishui Prefecture, in terms of the number of IP applications filed, were collected. Collectively, these represent 16.76 % all IP applications made in Lishui. As discussed above, design patents and trademarks are preferred by Lishui enterprises, which possess a low technical content and can be easily used to protect intangible assets. More details are shown in Table 12.2.

Table 12.2 The top 10 enterprises in terms of number of IP applications in Lishui Prefecture in 2013
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Most of our interviews focused on the role and importance of light IP to enterprises’ revenue and growth strategy. In general, enterprises favor light IP, which is suitable for future strategy development, and is helpful in increasing operating income because the majority of companies in Lishui belong to the light industrial sector. The focus of local government and companies has turned to the application and protection of light IP. Our interviews indicated that light IP is an efficient protection tool to increase market sales of products produced by these industries, and has become key to gain market competitiveness, and is clearly a preferred option over invention patents. Light IP plays a foundational role in upgrading industry and in the regional economic development of Lishui Prefecture.

From Table 12.2, we can see that the number of IP applications made by enterprises far exceed those made by colleges. The number of design patents accounts for 65.85 % of all patent applications for the top ten enterprises. The main business interests of these enterprises belong to the agricultural, forestry and the small processing industries. Designs are important to the abovementioned industries, hence why the local government and enterprises prefer design patents.

In addition, nine geographical indications have been granted in total to Yunhe County Fungus, Longquan City Ganoderma Lucidum, Longquan City Celadon, Qingyun County Mushroom, ChuzhouFootnote 5 White Lotus, Jinyun County Sheldrake, Songyang County Tea, Jingning County Tea, and Suichang County Bamboo Charcoal. The nine geographical indications provide great impetus to the agricultural and forestry products trade, which are the foundation of the local resource-based industries. Indeed, from our interviews we identified that geographical indications are essential to product price and market competitiveness. Further, geographical indications help enable ‘green’ products to enter domestic and foreign markets.

As indicated in Table 12.2, most of the enterprises that are top patent filers in Lishui also obtained status as having national famous brands, provincial famous trademarks, and/or prefecture famous trademarks. These light IP rights were reported to be important tools in the marketing strategy of these companies to increase their competitiveness.

Our interviews identified that the enterprises in Lishui Prefecture that are important contributors to the local economy are able to use their light IP to good effect. Light IP allows them to charge increased product prices, enhance their corporate image, and more generally expand in the domestic market and, in some cases foreign markets. In addition to these key points above, enterprises may prefer light IP in order to achieve a balance between light IP resource input and economic performance output, reasonably using both their own internal resources and external natural resources. Therefore by using light IP, enterprises are able to effectively promote and develop their product’s marketing strategy while also contributing to regional eco-friendly economic development.

6.3 Government Policies for Promoting Light IP

The interviewees from the government held the belief that light IP is essential to their region’s leading industries and companies’ main business, and also benefit the local specialized economy as they have a low technology threshold requirement and are comparatively easy to protect. Therefore, they are suitable for the agricultural, forestry, tourism and leisure, furniture, arts and handicrafts, and small-scale processing industries.

According to the light IP requirements of local enterprises, Lishui Prefecture government has issued various policies to encourage the development of light IP, and especially to support local famous trademarks, geographical indications, and other types of IP. Some of the major polices are listed in Table 12.3. The related policies concerning trademarks include ‘Lishui Prefecture Brand Trademark Development Strategic Planning’, and ‘Lishui Prefecture Famous Trademark Identification and Protection Measures’, which integrate administrative and fiscal measures. Moreover, financial subsidies and tax exemptions are also used to encourage enterprises to apply for design patents.

Table 12.3 Key IP-related policies issued by Lishui Prefecture Government
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Several other policies and programs have been instituted in order to encourage and to develop light IP in Lishui. Making full use of natural geographical resources, the government has applied for five geographical indications, which are granted by the State Quality Inspection Administration. In order to protect famous mushrooms, wooden toys, ethnic minority products and other special local products, the government encourages farmers and entrepreneurs to establish professional associations and strengthen the construction of local technical supporting stations. For the better protection of traditional knowledge and natural resources, the local government has set up a special steering group to monitor and report on the work of the ‘National IPR Model Pilot County of Traditional Knowledge’, the aim of which is to improve the management and level of protection of regional IP by SIPO. Furthermore, with the deterioration of the ecological environment and as the ecological crisis intensifies elsewhere in China, the government has invested more in publicizing the importance of the concept of light IP-driven regional green economic development.

Our interviews with entrepreneurs and government officials in Lishui in charge of monitoring the policies and programs mentioned above, generally indicated their belief that most of these policies were helpful for encouraging Lishui’s enterprises to become more competitive domestically and even to expand abroad. The fact that the policies are specifically focused on developing light IP, which the entrepreneurs relied upon heavily in order to grow their business, rather than prioritizing the filing of invention patents, was identified as an important aspect of the policies. While future research should examine the different policies in more depth and consider how they function to encourage the development of light IP and whether they can be improved, the fundamental finding that light IP can increase the competitiveness of enterprises is a main takeaway from our research.

7 Conclusions and Policy Recommendations

Our analysis finds that Chinese localities with comparative advantages in lighter industries should consider primarily promoting light IP rights with their IP policies, including IP-conditioned government incentives, rather than blindly following central government-level policy advice to strongly promote invention patents. This does not necessarily mean these governments should discourage invention patenting. Rather, invention patents should not be as strongly promoted as part of these local governments’ economic development strategies.

The traditional heavy chemical development model has led to a poor quality environment and rampant pollution in China. Therefore, using a development model that results in even further environmental pollution to promote economic development is no longer justifiable to lead China’s future development. Regions such as Lishui that specialize in agricultural and forestry products, tourism and other light industries often have comparative advantages and capabilities in these industries. And light IP can be better suited than invention patents to developing these industries. Therefore, there is an opportunity to use government policies to support the development and utilization of light IP rights to enable both economic development and environmental protection in such regions. If light IP is developed strategically, it can contribute to sustainable economic development while protecting and optimizing environmental conditions. Our study of Lishui’s development illustrates this paradigm.

In order to realize the greater effect of light IP on regional economic development, two approaches can be taken. First, enterprises in regions with economic and environmental conditions similar to Lishui should cultivate their knowledge and awareness of light IP, follow the ‘Rules of Enterprises’ IPR Management’Footnote 6 in order to perfect their light IP management system, and invest more resources into light IP operation.

Second, the government should realize the differentiated demand for different types of IP from different regions based on their local natural resources and industrial bases, and craft IP support policies accordingly. The number of invention patents, used as the key performance indicator of regional science and technology capacity, may be not appropriate, and may even have a negative effect on natural resource-intensive regions. Therefore, the central-level policy and advice should be replaced by IP strategies that better achieve balanced development among different regions. Such a strategy may include support for high-quality intermediary consulting services, increased government subsidies for light IP, improved pledge financing, and the establishment of an information service platform. However, these policies should of course be carefully formulated in order to ensure that they provide support to enterprises that truly need it, while at the same time limiting the possibility of potential adverse incentives created by inappropriately formulated policies.