Application and Expansion of the Patent Open License: An Analytical Framework Through the Lens of Diffusion of Innovations Theory

Abstract

With the amendments to the Detailed Rules for the Implementation of the Patent Law of the People’s Republic of China and the Guidelines for Patent Examination, China’s patent open license system has been fully implemented. The two-year pilot programs have garnered valuable insights into addressing patent royalty pricing, platform operations, and reduction and exemption in annual fees within the patent open license system. From the perspective of diffusion of innovations theory, innovation attributes serve as a key criterion for evaluating the market value of patent open license. The diversified and dynamic innovation attributes lead patentees to adopt pricing models, either algorithm-based pricing or flexible pricing. Mass media and face-to-face interaction channels function as primary vehicles for innovation diffusion through open license information platforms. Specifically, efficient pairing of supply and demand can be done through novel algorithmic matching mechanisms. Furthermore, user feedback modules and real-life engagement strategies can be integrated to facilitate homogeneous communication, enhancing potential licensees’ recognition of the patent open license system. Innovation adoption theory suggests that public policy incentives for patentees should target early adopters with higher risk tolerance rather than apply universally. This indicates that, in terms of the reduction and exemption in annual fees, a degressive structure achieves greater incentive efficacy in early stages compared to fixed-amount reduction and exemption. In later phases, it enables systematic pruning of valueless of patent open licenses, yielding superior overall cost-benefit outcomes.

Keywords

patent open license / patent transformation / royalty / diffusion of innovations / innovation incentives

RIGHTS & PERMISSIONS

Higher Education Press