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Technology Trading in China / 技术交易在中国


Author: Tyler Ehler
Date: Aug 20, 2014

Technology Trading in China

Recently, there has been a lot of discussion about intellectual property rights within China. While China aims to continue to invest in developing new technology, there is still a lack of enforced legal infrastructure in place to properly prevent intellectual-property theft from occurring. Due to these considerations, there are legitimate concerns one must consider when bringing foreign technology and expertise into the Chinese market.

Moreover, many patents, especially in China, can be given out unnecessarily, a problem exacerbated due to patent examiners receiving extra payment if they approve more patents. What is important to consider is that patents are indeed necessary for certain products, be they biomedical, biotechnology or industrial equipment or for certain technology widgets. However, the reality is that in the tech world, things are changing so rapidly that making sure your technology is up-to-date is often the most important consideration.

In China, regardless whether or not IP infringement occurs, technology infringement could pose difficulties and one must consider that any legal decision will be left to judges on the local level who will likely lack expertise regarding the technology at hand. Furthermore, a foreigner bringing technology may not know if a patent already exists within the country for his technology or not, and given the laws are all in Chinese, will unlikely be able research existing patents without local help. As such, there are serious considerations that must be taken into account when trying to bring a technology into the Chinese market. However, the focus of this article is not be to criticize Intellectual Property Rights violations, but rather, to offer solutions on how to effectively trade technology while looking at three critical players in the transaction. These players include the foreign seller of technology who is trying to bring his technology into the Chinese market, the Chinese buyer, whether a company or a governmental organization purchasing technology and lastly, the role of the middleman in facilitating these transactions.

The Foreign Seller

From the perspective of the owner of the foreign technology, it is important to consider what technology you own and the risks associated with bringing your technology into the Chinese market. As mentioned, there are sure to be IP concerns and the potential of patented technology being stolen. However, it is important to consider what technology you own. If you own a cutting edge technology, one option would be to wait a short time before allowing this technology to enter the Chinese market and focus first on the North American or European markets. Another factor to consider is that often times some Chinese buyers may not even care to have the latest and most up to date technology on the market, but rather have a reliable, stable technology they can apply. Thus if one potential seller has a 5 star technology and another a 3 or 4 star technology, the Chinese buyer may actually buy a 3 or 4 star technology to avoid potential conflicts arising from IP challenges, or simply buy the lower end technology because it is cheaper, but still serves its purpose in an efficient and effective manner.

One further consideration a foreign seller should take into account is what technology he owns and who the potential buyer is. If you are the owner of a technology that could potentially be used against the government, there is the potential that your technology could be banned within the country. Thus, when selling a product like video surveillance for example, your target customer should be a branch of the government, such as the police department, rather than sold directly to a local chain store. As such, it is important to consider a local Chinese partner who has access to the right buyers in the market.

In this sense, licensing technology for a fee is an option that may make more sense for an SME that doesn’t have the capital, the connections or the expertise to go into China on its own. The SME could also charge the Chinese company an extra fee for an option for the Chinese company to learn about its technology. However, when these deals are put in place it is important to do everything possible to make sure that the Chinese company has no choice but to keep paying you. Therefore, the best way to go about bringing and trading technology into the Chinese market is either to work with a partner who already has a license to sell certain technologies or to go through the process of licensing that technology to a Chinese company under the form of an exclusivity clause. Importantly, these licenses won’t change as quickly Intellectual Property will. Through the exclusivity clause this middleman would have the exclusive right to sell your technology to the Chinese market. By going through this process, one the biggest considerations on the side of the seller of foreign technology, that is, the logistical issues involved in bringing technology into China, can be bypassed.

In terms of targeting what technology the Chinese market may be looking for, an easy area to research are the targets of the Five Year Plans (FYP), both on a central and a local level. For example, in the most recent FYP, advancing the high-technology industry has been a strong target of both central and local governments. These industries include energy-saving and environment protection, high-end equipment manufacturing, biotechnology, new-generation information technology, new energy, new materials and new-energy vehicles. Thus, with the Chinese government subsidizing these technologies with fiscal and tax policies to reach certain targets, those technologies will be in higher demand and make access into the Chinese market easier if you are a holder of these technologies.

The Chinese Buyer

As a Chinese buyer, it is also important to make sure the source of the technology is legitimate, and that if the company does not already have an established name or reputation that there is a specialist, or a team of specialists, such as a Systems Integrator to ensure that the technology is functional and that the customers’ needs are matched by the proposed product. As such, having a partner who can provide this sort of testing for you while finding the right product is of value and can cut out a lot of the time involved in finding a suitable product.

The previous considerations provide an optimal opportunity for a company to set itself up as a middleman whereby they can find technology that is needed in the Chinese market. This could be accomplished by buying technology cheaper than market value and ensuring you have the proper connections to sell it at market value in China. Technical people could be put in place to make sure the technology is reliable and functioning while marketers and analysts could be put in place to ensure the customer is getting the technology they both want and need. The difficulty in this type of enterprise is that the buyer won’t necessarily listen to you or want to buy the specific technology you may have found for them. As such, it is important to make sure you not only get the best technology for the buyer but what is right for them.

The middleman facilitates the transaction for both the local Chinese Buyer and the Foreign Seller by having the right access to and understanding of the market that makes the trading of technology easier than if the Foreign Seller and Chinese Buyer were to directly interact with each other and likely have misunderstandings arise. It is the middleman’s job to make sure there is always a wide range of products available for the Chinese Buyer and that there are always foreign brands introducing new technologies that could potentially be added to that product list. The middleman could also help find multiple clients for the foreign company. By having the middleman acting as a mediator the middleman can ensure there is no loss of “face” which is important in the Chinese market. Furthermore, with the development of the Chinese technology market, an understanding of the foreign technology market would allow the middleman the advantage of knowing what technology China may have that the foreign markets currently lack. This would mean a role reversal where China is the seller and the Foreigner the buyer of technology. Thus the middleman’s greatest asset will be its client network and ability to have a strong relationship in the Greater China region in order to facilitate the transactions that occur.

Thus, regardless of IP rights issues that may exist, there are opportunities for both Chinese Buyers and Foreign Sellers to engage in technology trading that is beneficial to both parties. A third party with both international and Chinese connections and a specialized understanding of different technologies can be used to facilitate transactions in a manner that is advantageous for both sides. As such, acting through this third party is a recommended method of bringing technology into the Chinese market.

Writer: Tyler Ehler, Hopkins Nanjing Center MA ’14

作者:Tyler Ehler
2014年08月20号

技术交易在中国

近期关于中国知识产权保护的讨论很多。尽管中国致力于持续投资研发新技术,但能有效防止知识产权窃取的强制法律基础仍然缺失。基于以上考虑,人们将外国技术和专业知识带进中国市场时应有引起合理的关注。

此外,很多专利,尤其是在中国,会不必要地被授予。由于专利审查人多批准专利会收到额外补偿,这个问题变得更加严重。需要重视的是专利对于某些产品是确实必要的,不管是生物医学,生物技术或工业设备,或是某些科技装置。然而,在技术世界中事情总是迅速变化的,保证你拥有最新的技术常常是最重要。
在中国,不管侵犯知识产权是否发生,技术侵权仍会造成困难。我们必须考虑由地方级法官做出的法律决定,他们很可能缺少对相关技术的专业知识。此外,外国人引入技术时可能不知道该技术是否在中国已经存在专利,而法律都是中文的,在没用本地帮助的情况下很难进行检索。因此在尝试将一项技术引入中国市场时必须加以重视。然而本文的目的并不是批评侵犯知识产权,而是对如何有效进行技术交易提出建议,同时关注交易中重要的三方。这三方包括尝试将其技术引进中国市场的外国技术卖方,中国买方,不管是购买技术的公司或政府机构,以及促进交易完成的中间人角色。

外国卖方

从外国技术的拥有者的角度来看,考虑你拥有何种技术以及将该技术引进中国市场的风险十分重要。如上所述,IP担忧和专利技术被窃取的可能性肯定存在。然后,考虑你拥有何种技术十分重要。如果你拥有一项前沿技术,你可以选择优先关注北美和欧洲市场,等待一段时间后再允许这项技术进入中国市场。另一个需要考虑的因素是中国买家可能并不需要最新最前沿的技术,而倾向于购买可以应用的可靠稳定的技术。因此如果潜在的买方同时拥有一项五星和一项三星或四星技术,中国买方会购买三星或四星的技术以规避IP 挑战带来的潜在冲突,或是因其价格低廉但仍能有效满足需求而直接购买低端技术。
外国卖家需要进一步考虑的是其拥有的技术以及潜在卖家的身份。如果你拥有的技术可能会被用于对政府不利的方面,有可能这项技术在中国会被禁止。因此,例如在卖类似于视频监视的产品时,你的目标客户应是政府分支机构,比如警务部门,而不是直接销售给地方连锁商店。同样,考虑可获得合适客户的中国当地合作伙伴很重要。

在此意义上,对没有资本、关系和专业技术独立进入中国市场的中小企业来说通过技术许可获取费用是更有意义的选择。这些中小企业也可以向愿意学习其技术的中国公司收取额外的费用。然而,交易完成后保证中国公司必须向你持续付费很重要。因此, 最好着手在中国市场引进和交易技术的方式是和已有出售某些技术的许可证的合作伙伴合作或通过以独家经营条款的形式将此技术授权给中国公司的程序进行。重要的是,这些许可证变化得没有知识产权法律快。通过独家经营条款中间人有将你的技术在中国市场出售的独有权利。通过这个过程,国外技术卖家最大的担心,即将技术引进中国带来的物流问题可以得到解决。
对于定位中国市场需要的技术,一个简单的研究领域是五年计划的目标,包括中央和地方层面。例如,在最近的五年计划中,提升高科技产业是中央和地方政府的重要目标。这些产业包括节能和环保,高端设备制造业,生物技术,新一代信息技术,新能源,新材料和新能源汽车。因此,在中国政府用财政和税收政策补贴这些技术以实现某些目标的同时,对这些技术的需求会更多,如果你拥有这些技术想进入中国市场也会更容易。

中国买方

作为中国买方,确保技术来源的合法性很重要,以及买方公司不是知名品牌或者拥有专家或专业团队的名声,比如系统集成商,从而保证其技术有功能性且建议产品和客户需求相匹配。同样,有能向你提供这类测试并且确定合适的产品是否有价值的合作伙伴可以节省你寻找合适产品过程中的很多时间。

中间人

前述的考虑给一个公司良好的机会成为一个可以找到中国市场需要技术的中间人角色。这可以通过以低于市场价格购买技术并确保有合适的关系将技术在中国市场销售出去来实现。你可以安排技术人员确保技术可靠性和功能性,安排市场和分析人员来负责确保客户获得他们想要和需要的技术。这种企业的困难在于买方不一定听进你的意见,或者他们并不想买你帮其找到的技术。确保你不仅为买方找到最好的技术更要是适用于买方的技术同样重要。
中间人拥有市场进入途径和对市场的理解,因此可以促进中国买方和外国卖方的交易。这使得交易比外国卖方和中国买方直接接触更容易,因为那样很可能会产生误会。中间人的工作是确保中国买方有范围宽泛的产品可以选择,以及总是有引进新技术的外国品牌在未来可能加入到产品目录中。中间人也可以帮助外国公司找到多个客户。有中间人作为调停角色可以保证不会丢面子,这在中国市场十分重要。并且,随着中国技术市场的不断发展,对于外国技术市场的了解会使得中间人拥有了解哪些技术中国有但外国市场缺少的优势。这意味着角色翻转,中国将成为技术的卖方而外国成为技术的买方。因此中间人最大的资产将是其客户网络和在大中华区拥有强大关系的能力,这将促进交易的完成。

因此,不过知识产权问题是否存在,进行技术交易对中国买方和外国卖方都存在有利的机会。有国际和中国关系,并且对不同技术有专业理解的第三方能以对双方都有利的方式促进交易完成。同样对外国卖家来说,通过第三方的方法将技术引进中国市场也是值得推荐的。

作者: Tyler Ehler, 中美中心国硕士 2014

Author: Tyler Ehler
Date: August 20, 2014

Technology Trading in China

Recently, there has been a lot of discussion about intellectual property rights within China. While China aims to continue to invest in developing new technology, there is still a lack of enforced legal infrastructure in place to properly prevent intellectual-property theft from occurring. Due to these considerations, there are legitimate concerns one must consider when bringing foreign technology and expertise into the Chinese market.

Moreover, many patents, especially in China, can be given out unnecessarily, a problem exacerbated due to patent examiners receiving extra payment if they approve more patents. What is important to consider is that patents are indeed necessary for certain products, be they biomedical, biotechnology or industrial equipment or for certain technology widgets. However, the reality is that in the tech world, things are changing so rapidly that making sure your technology is up-to-date is often the most important consideration.

In China, regardless whether or not IP infringement occurs, technology infringement could pose difficulties and one must consider that any legal decision will be left to judges on the local level who will likely lack expertise regarding the technology at hand. Furthermore, a foreigner bringing technology may not know if a patent already exists within the country for his technology or not, and given the laws are all in Chinese, will unlikely be able research existing patents without local help. As such, there are serious considerations that must be taken into account when trying to bring a technology into the Chinese market. However, the focus of this article is not be to criticize Intellectual Property Rights violations, but rather, to offer solutions on how to effectively trade technology while looking at three critical players in the transaction. These players include the foreign seller of technology who is trying to bring his technology into the Chinese market, the Chinese buyer, whether a company or a governmental organization purchasing technology and lastly, the role of the middleman in facilitating these transactions.

The Foreign Seller

From the perspective of the owner of the foreign technology, it is important to consider what technology you own and the risks associated with bringing your technology into the Chinese market. As mentioned, there are sure to be IP concerns and the potential of patented technology being stolen. However, it is important to consider what technology you own. If you own a cutting edge technology, one option would be to wait a short time before allowing this technology to enter the Chinese market and focus first on the North American or European markets. Another factor to consider is that often times some Chinese buyers may not even care to have the latest and most up to date technology on the market, but rather have a reliable, stable technology they can apply. Thus if one potential seller has a 5 star technology and another a 3 or 4 star technology, the Chinese buyer may actually buy a 3 or 4 star technology to avoid potential conflicts arising from IP challenges, or simply buy the lower end technology because it is cheaper, but still serves its purpose in an efficient and effective manner.

One further consideration a foreign seller should take into account is what technology he owns and who the potential buyer is. If you are the owner of a technology that could potentially be used against the government, there is the potential that your technology could be banned within the country. Thus, when selling a product like video surveillance for example, your target customer should be a branch of the government, such as the police department, rather than sold directly to a local chain store. As such, it is important to consider a local Chinese partner who has access to the right buyers in the market.

In this sense, licensing technology for a fee is an option that may make more sense for an SME that doesn’t have the capital, the connections or the expertise to go into China on its own. The SME could also charge the Chinese company an extra fee for an option for the Chinese company to learn about its technology. However, when these deals are put in place it is important to do everything possible to make sure that the Chinese company has no choice but to keep paying you. Therefore, the best way to go about bringing and trading technology into the Chinese market is either to work with a partner who already has a license to sell certain technologies or to go through the process of licensing that technology to a Chinese company under the form of an exclusivity clause. Importantly, these licenses won’t change as quickly Intellectual Property will. Through the exclusivity clause this middleman would have the exclusive right to sell your technology to the Chinese market. By going through this process, one the biggest considerations on the side of the seller of foreign technology, that is, the logistical issues involved in bringing technology into China, can be bypassed.

In terms of targeting what technology the Chinese market may be looking for, an easy area to research are the targets of the Five Year Plans (FYP), both on a central and a local level. For example, in the most recent FYP, advancing the high-technology industry has been a strong target of both central and local governments. These industries include energy-saving and environment protection, high-end equipment manufacturing, biotechnology, new-generation information technology, new energy, new materials and new-energy vehicles. Thus, with the Chinese government subsidizing these technologies with fiscal and tax policies to reach certain targets, those technologies will be in higher demand and make access into the Chinese market easier if you are a holder of these technologies.

The Chinese Buyer

As a Chinese buyer, it is also important to make sure the source of the technology is legitimate, and that if the company does not already have an established name or reputation that there is a specialist, or a team of specialists, such as a Systems Integrator to ensure that the technology is functional and that the customers’ needs are matched by the proposed product. As such, having a partner who can provide this sort of testing for you while finding the right product is of value and can cut out a lot of the time involved in finding a suitable product.

The previous considerations provide an optimal opportunity for a company to set itself up as a middleman whereby they can find technology that is needed in the Chinese market. This could be accomplished by buying technology cheaper than market value and ensuring you have the proper connections to sell it at market value in China. Technical people could be put in place to make sure the technology is reliable and functioning while marketers and analysts could be put in place to ensure the customer is getting the technology they both want and need. The difficulty in this type of enterprise is that the buyer won’t necessarily listen to you or want to buy the specific technology you may have found for them. As such, it is important to make sure you not only get the best technology for the buyer but what is right for them.

The middleman facilitates the transaction for both the local Chinese Buyer and the Foreign Seller by having the right access to and understanding of the market that makes the trading of technology easier than if the Foreign Seller and Chinese Buyer were to directly interact with each other and likely have misunderstandings arise. It is the middleman’s job to make sure there is always a wide range of products available for the Chinese Buyer and that there are always foreign brands introducing new technologies that could potentially be added to that product list. The middleman could also help find multiple clients for the foreign company. By having the middleman acting as a mediator the middleman can ensure there is no loss of “face” which is important in the Chinese market. Furthermore, with the development of the Chinese technology market, an understanding of the foreign technology market would allow the middleman the advantage of knowing what technology China may have that the foreign markets currently lack. This would mean a role reversal where China is the seller and the Foreigner the buyer of technology. Thus the middleman’s greatest asset will be its client network and ability to have a strong relationship in the Greater China region in order to facilitate the transactions that occur.

Thus, regardless of IP rights issues that may exist, there are opportunities for both Chinese Buyers and Foreign Sellers to engage in technology trading that is beneficial to both parties. A third party with both international and Chinese connections and a specialized understanding of different technologies can be used to facilitate transactions in a manner that is advantageous for both sides. As such, acting through this third party is a recommended method of bringing technology into the Chinese market.

Writer: Tyler Ehler, Hopkins Nanjing Center MA ’14


作者:Tyler Ehler
2014年08月20号

技术交易在中国

近期关于中国知识产权保护的讨论很多。尽管中国致力于持续投资研发新技术,但能有效防止知识产权窃取的强制法律基础仍然缺失。基于以上考虑,人们将外国技术和专业知识带进中国市场时应有引起合理的关注。

此外,很多专利,尤其是在中国,会不必要地被授予。由于专利审查人多批准专利会收到额外补偿,这个问题变得更加严重。需要重视的是专利对于某些产品是确实必要的,不管是生物医学,生物技术或工业设备,或是某些科技装置。然而,在技术世界中事情总是迅速变化的,保证你拥有最新的技术常常是最重要。
在中国,不管侵犯知识产权是否发生,技术侵权仍会造成困难。我们必须考虑由地方级法官做出的法律决定,他们很可能缺少对相关技术的专业知识。此外,外国人引入技术时可能不知道该技术是否在中国已经存在专利,而法律都是中文的,在没用本地帮助的情况下很难进行检索。因此在尝试将一项技术引入中国市场时必须加以重视。然而本文的目的并不是批评侵犯知识产权,而是对如何有效进行技术交易提出建议,同时关注交易中重要的三方。这三方包括尝试将其技术引进中国市场的外国技术卖方,中国买方,不管是购买技术的公司或政府机构,以及促进交易完成的中间人角色。

外国卖方

从外国技术的拥有者的角度来看,考虑你拥有何种技术以及将该技术引进中国市场的风险十分重要。如上所述,IP担忧和专利技术被窃取的可能性肯定存在。然后,考虑你拥有何种技术十分重要。如果你拥有一项前沿技术,你可以选择优先关注北美和欧洲市场,等待一段时间后再允许这项技术进入中国市场。另一个需要考虑的因素是中国买家可能并不需要最新最前沿的技术,而倾向于购买可以应用的可靠稳定的技术。因此如果潜在的买方同时拥有一项五星和一项三星或四星技术,中国买方会购买三星或四星的技术以规避IP 挑战带来的潜在冲突,或是因其价格低廉但仍能有效满足需求而直接购买低端技术。
外国卖家需要进一步考虑的是其拥有的技术以及潜在卖家的身份。如果你拥有的技术可能会被用于对政府不利的方面,有可能这项技术在中国会被禁止。因此,例如在卖类似于视频监视的产品时,你的目标客户应是政府分支机构,比如警务部门,而不是直接销售给地方连锁商店。同样,考虑可获得合适客户的中国当地合作伙伴很重要。

在此意义上,对没有资本、关系和专业技术独立进入中国市场的中小企业来说通过技术许可获取费用是更有意义的选择。这些中小企业也可以向愿意学习其技术的中国公司收取额外的费用。然而,交易完成后保证中国公司必须向你持续付费很重要。因此, 最好着手在中国市场引进和交易技术的方式是和已有出售某些技术的许可证的合作伙伴合作或通过以独家经营条款的形式将此技术授权给中国公司的程序进行。重要的是,这些许可证变化得没有知识产权法律快。通过独家经营条款中间人有将你的技术在中国市场出售的独有权利。通过这个过程,国外技术卖家最大的担心,即将技术引进中国带来的物流问题可以得到解决。
对于定位中国市场需要的技术,一个简单的研究领域是五年计划的目标,包括中央和地方层面。例如,在最近的五年计划中,提升高科技产业是中央和地方政府的重要目标。这些产业包括节能和环保,高端设备制造业,生物技术,新一代信息技术,新能源,新材料和新能源汽车。因此,在中国政府用财政和税收政策补贴这些技术以实现某些目标的同时,对这些技术的需求会更多,如果你拥有这些技术想进入中国市场也会更容易。

中国买方

作为中国买方,确保技术来源的合法性很重要,以及买方公司不是知名品牌或者拥有专家或专业团队的名声,比如系统集成商,从而保证其技术有功能性且建议产品和客户需求相匹配。同样,有能向你提供这类测试并且确定合适的产品是否有价值的合作伙伴可以节省你寻找合适产品过程中的很多时间。

中间人

前述的考虑给一个公司良好的机会成为一个可以找到中国市场需要技术的中间人角色。这可以通过以低于市场价格购买技术并确保有合适的关系将技术在中国市场销售出去来实现。你可以安排技术人员确保技术可靠性和功能性,安排市场和分析人员来负责确保客户获得他们想要和需要的技术。这种企业的困难在于买方不一定听进你的意见,或者他们并不想买你帮其找到的技术。确保你不仅为买方找到最好的技术更要是适用于买方的技术同样重要。
中间人拥有市场进入途径和对市场的理解,因此可以促进中国买方和外国卖方的交易。这使得交易比外国卖方和中国买方直接接触更容易,因为那样很可能会产生误会。中间人的工作是确保中国买方有范围宽泛的产品可以选择,以及总是有引进新技术的外国品牌在未来可能加入到产品目录中。中间人也可以帮助外国公司找到多个客户。有中间人作为调停角色可以保证不会丢面子,这在中国市场十分重要。并且,随着中国技术市场的不断发展,对于外国技术市场的了解会使得中间人拥有了解哪些技术中国有但外国市场缺少的优势。这意味着角色翻转,中国将成为技术的卖方而外国成为技术的买方。因此中间人最大的资产将是其客户网络和在大中华区拥有强大关系的能力,这将促进交易的完成。

因此,不过知识产权问题是否存在,进行技术交易对中国买方和外国卖方都存在有利的机会。有国际和中国关系,并且对不同技术有专业理解的第三方能以对双方都有利的方式促进交易完成。同样对外国卖家来说,通过第三方的方法将技术引进中国市场也是值得推荐的。

作者: Tyler Ehler, 中美中心国硕士 2014

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