The State Intellectual Property Office released a range of new policies to support innovation and growth of micro businesses.
The new polices, which are designed to optimize the IP development environment for small businesses, focus on improving public services and helping startups increase capabilities in innovation and using IP, according to SIPO.
"IP is an engine that powers the fast growth of small tech firms and earns them more profit margin," said He Hua, deputy commissioner of SIPO, at a press conference last week.
A survey SIPO conducted in Chongqing found that small businesses with an IP edge generated profits seven times the amount of those without patents, He added.
About 11.7 million micro businesses operate in China. They generated some 60 percent of the country's GDP, contributed 65 percent of total invention patents and developed more than 80 percent of new products.
"Yet most of them still stay at the low end of industrial chains and are badly in need of IP aid for their healthy and sustainable growth," He noted.
In China the average life span of a small company is 3.7 years, which is much shorter than 8.2 years in the United States and 12 years in Japan.
He said a survey of 500 small German firms showed 20 percent lasted more than 100 years.
With this in mind, the policy makers borrowed some successful practices from abroad to address issues such as difficulties filing patent applications and high costs in IP protection, the commissioner said.
SIPO will prioritize filings by small companies for their core patents and help them gain patent grants overseas, according to the new policies.
IP authorities will increase financial aid earmarked for patent applications by small companies to help fund their industrialization.
To help resolve the financing bottleneck, SIPO urged its branches across the country to partner with various financial organizations to channel more low-interest loans to small businesses and reduce patent insurance premiums.
Patent-collateralized loans surpassed 23.5 billion yuan ($3.8 billion) in the first half of this year, a rise of 124 percent year-on-year.
During the same period, more than 700 companies in 34 cities benefited from patent insurance.
The new policies also call for increased cooperation with research institutes and colleges and encourage State-owned enterprises to license idle patents to small businesses.
Under the plans, an IP service network will extend from provinces and cities to townships and add liaisons at startup centers or small business incubators to enable easier access to professional services.
Given that small companies tend to develop more utility models and industrial designs, two kinds of patents less complicated than invention patents, He said his office would add legal aid centers to advance mechanisms for rapid dispute settlements in small business clusters.
Currently, there are 78 aid centers that serve small businesses across the country.
The new policies, which are part of the central government's efforts to back small businesses, provide a framework and direction, which will be followed by a series of specific initiatives and details soon, said Fan Jianyong, an official of SIPO's patent administration department.
In response to the new policies local IP authorities are expected to explore possibilities to spur the growth of small companies, Fan said.
In cooperation with the Ministry of Industry and Information Technology, SIPO promoted an IP strategy at 32 nationwide clusters of small- and medium-sized enterprises since 2009.
The number of SMEs has grown about 20 percent annually in recent years, with SME patent filings hitting an average annual rise of 53.8 percent.