The Guideline of the Intellectual Property Asset Assessment (‘Guideline’)will come into force from 1 July 2016

After the State Council has released the ‘Opinions on Accelerating the Construction of Intellectual Property under the New Situation’ in December 2015, the China Asset Assessment Association (‘CAAA’) has released the Guideline in 31 December 2015, which will come into force from 1 July 2016.

In fact, for the IP asset assessment issues, based on the categories of assert, CAAA has established a ‘1+3’ system on assessing the value of IP asset, including ‘Asset Assessment Criteria – Intangible Assets’, ‘Guidance on the Patent Asset Valuation’, ‘Guidance on the Trademark Asset Appraisal’ and ‘Guidance on the Copyright Asset Appraisal’. However, even though, ‘1+3’ system could regulate the assessment, in the practice, there are still many problems, such as the categories of the IP in ‘1+3’ system only cover part of IP, the assessment parameters might be different for the same IP category, the elements and focus for different assessment purposes shall be different, and etc..

In view of these, in order to apply the same requirements on the identification, protection and management of the value of IP assert, the Guideline has set the same principal requirements on all kinds of IP assert assessment; and the specific requirements for each IP assert categories, such as the laws and regulations for reference, the consideration elements, the focus and the applicable assessment methods, on the different assessment purpose.

Especially, Article 22 of the Guideline has prescribed the principle requirements on assessing ‘Trade Secrets’, which has not been prescribed in the “1+3 System”. It has prescribed that during the assessment of the Trade Secrets, the confidential level, the confidential period, the application scope of trade secrets shall be taken into consideration. In addition the protection measures (such as the non-competition agreements and etc.,) applied by the right holder shall be also taken into consideration too.

In practice, while a company entrusts an agency to assess its relevant IP assert, it shall provide the relevant documents for the assessment purpose in accordance with the Guideline. In addition, based on the effective communication with the agency, it shall also provide a more comprehensive and specific documents in accordance with the guidelines under the ‘1+3 System’.

Conversely, for the IP assert assessment report provided by the counterparty, in order to bring the corresponding challenge or defense, a company could make full use of the Guideline and the relevant rules and regulations, to find the problems of such IP assert assessment report, such as whether it has met the assessment requirements, or the assessment elements are appropriate.