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Monday, July 22, 2013

SIPO posted 2012 financial report

Just read the latest SIPO (State Intellectual Property Office of China) financial report, it is an interesting read.

Last year, SIPO received RMB 3414 million from public funding and RMB 1456 million received as operating income. The operating income includes patent application and examination fees, as well as training, publication and other data services. The expenses that was directly related to Intellectual Property services was RMB 3340 million.

I was trying to check this with the number of patent applications being processed by SIPO, I was not able to obtain the 2012 figure. The 2011 figure shows that SIPO process 526,412 new Patent of Invention application in one year. If we also add Utility Model and Design Patent, the number of new applications processed in 2011 was 1,633,347.

The fees collected for Patent of Invention, Utility Model and Design Patent are different, but just to average out, the average cost to manage and process one patent application is reasonably low.

For example, for a Patent of Invention, the official fee for examination is just RMB2,500 (about USD407), this is a small number when we compare it to EPO's search and examination fee!

The SIPO's financial report was posted here (in Chinese). The latest SIPO statistics was posted here.



Friday, November 16, 2012


I think it is a good news to HKSME which wants to expend their brand name in China. Even HK$500,000 is little money to promote brand name in China. (As our last dairy stated, JDB has spend 12 billion on their brand name building), However, it is also an incentive to HKSME and HK advertisement & PR agents.   

I think if HKSME wants to expend or build up their brand name in China. They need following steps: 
1) Trademark or patent registration in China 
2) To build up the sales channel 
3) To proceed promotional campaign

By the way, HK$500,000 is maximum and support half of the promotional campaign. That means HKSME need to prepare another HK$500,000 or even more for promotional campaign and more fund for operation budget such as building up sales channel, etc. 

There are 2 difficulty for building up brand name in China. One difficulty is to handle the imitators. Another difficulty is to handle large size of map. Actually, Trademark or patent registration in China is 90% successful to protect their brand name. Surely, there are some small imitators may take risk to do the one-time copying. However, at that time, that means the brand name is famous enough. 

Some may misunderstand that patent applications take few days only. Actually, it needs around few years.  

Even size of China Shenzhen region is many times of HK region. Therefore, it is another challenge to a company for how to make promotional campaign to contact their target customers.

Check out details here.

Monday, November 5, 2012


Recently, when I was eating in Chinese restaurant and a waiter gave me a Herbal Tea printed in red and called "加多寶“ (JDB Herbal Tea), it made me curious what was the story behind this red package renamed. Actually, JDB Herbal Tea was called Wong Lo Kat Herbal Tea before. Since in my childhood, it had many advertisements covering all printing and TV advertisement. It was famous in HK in a period then suddenly disappeared in HK supermarkets and convenience stores. However, it has silently covering all restaurants and supermarkets in China. From historical record, the JDB group had purchased the trademark of "Wong Lo Kat" since 1990. Around 20 years, It had over 100 billion revenue in 2008 and it had 150 billions revenue in 2010. The trademark of "Wong Lo Kat" was worth 22 billions in 2006. There were some other similar drink brands from HK to enter China market but they had no such bright result. This legend was ended in 2011 when guang yao group (廣藥集團) had no more authority of this trademark to JDB group. 

We are not commenting from the legal aspect. However, from the economic side, we can find some implications: 
1) Trademark can be cost unbelievable worth or cost nothing. Around 1990, guang yao group (廣藥集團), JDB group and everybody believe "Wong Lo Kat" worth 600K only. However, it is worth 22 billion in 2006. Surely, nobody knows how much it costs after 2020.   

2) JDB Group CEO is smart and brave to buy the trademark of Wong Lo Kat Herbal Tea and promote it to number one drinks in China. However, can he makes another legend by JDB Herbel Tea name? With the old and same equation of Herbal Tea and heavy promotional strategy, some still guess their sales revenue will decrease from 150 billions to 100 billions. There are some critical points to be considered. 

a) JDB Group is still holding the trademark of "Wong Lo Kat" in HK. Even "Wong Lo Kat" faded out in HK market. However, if they keep same name selling in HK market. It makes inland customers confused. The worst situation, when a customer is confused by both name, they will choose the third brand in market. Even the HK market is small, however, it affects those inland customers who always travel between HK and Guang Dong region. 

b)  The sales channel is critical to market share in China. Actually, guang yao group (廣藥集團) has more than thousand medical retail store. Furthermore, it has signed contract with another group for nearly 13K retail selling points in China. That's why they have confidence to collect the trademark of "Wong Lo Kat Herbal Tea" back. With the free rider on strong promotional strategy many years, they only provide enough selling point, then customer will pick them up. Therefore, they spent 7 millions promotional budget only in 2012.

c) The cost of JDB group is heavy when the cost of guang yao group (廣藥集團) is little. Compared to 7 millions promotional budget, JDB group has already spent 12 billions (50% increase compared with last year) to build up their new own brand drink. It does not include other costs such as renew packing, stocks replacing, etc. JDB group has fixed factories for Herbal Tea production while guang yao group (廣藥集團) is contract working with different factories for production. JDB group needs large amount of sales to keep their factory for running. Therefore, they need customers replace JDB Herbal Tea instead of "Wong Lo Kat Herbal Tea shortly. Otherwise, it will make their annul revenue decrease much continuously. 

d) Some believe it is lose-lose situation. When guang yao group (廣藥集團) suddenly diversify its business to drink industry. Actually, guang yao group (廣藥集團) has no production lines but give authority to more than 4 factories for production. It means the quality and taste is a little different. In worst situation, guang yao group (廣藥集團) will make Wong Lo Kat Herbal Tea become no more welcomed by Chinese. and JDB group is also been kicked out from the market. Surely, Guang yao group (廣藥集團) will think it is win-lose situation, Guang yao group (廣藥集團) give up the choice to arise the trademark fee but choose to add this 150 billion side revenue to their 450 billion core business revenue. Compared to JDB group's core business is Herbal Tea, Guang yao group (廣藥集團) still wins in case they get 1% market share only.

The story is totally different in case JDB group keep "Wong Lo Kat" trademark but Guang yao group (廣藥集團) starts their own brand name Herbal Tea. Therefore, we can see the value of trademark is hard to measure.

Related news in Chinese:

Saturday, October 6, 2012

1 Oct 2012 was a difficult day for Hong Kong

In a fatal accident, 39 lives were lost. We share our sorrow for lives lost.

If you so wish to paying tribute to those lost, you may go to this site.

Thursday, October 4, 2012

APPLE buy more patents for war


I think the great news of patents world in 2012 is APPLE win the lawsuit over SAMSUNG and make it compensation of 10 billion. Even this number cannot be compared with its core business such as iPhone selling. For world famous brand, the winner of lawsuit represents not only the money and the reputation. The result of lawsuit also affects the selling products and the image on customers mind. Therefore, SAMSUNG immediately declare 2nd round of patent war over APPLE once its iPhone support LTE4G. 

It is expected to be 2nd round of patent war soon because APPLE held nothing on LTE4G last year but they hold 318 patent until now. That means, Apple is preparing war and accept the declaration. While SAMSUNG hold 819 patents on LTE4G and lose the 1st round, they must start the war whether for the money or for their image on customer's mind.

News reference (in Chinese).