Author: Ling Jianjun (Contemporary Chinese Inventor, Fellow of the China Association of Invention)

Date: September 26, 2025

Location: Yixing

Abstract

At present, the number of valid invention patents in China has exceeded 4 million, firmly ranking first in the world. However, the structural problems of "emphasizing quantity over quality" and "emphasizing authorization over value" are prominent. Especially in the scenario of government equipment repurchase audits, auditors and financial groups often fall into the traps of "pricing by weight" and "valuing by cost", neglecting the functional value of patents throughout their entire life cycle - such as long-term operational adaptability, security risk prevention and control capabilities, contribution to low-carbon ecology, and high-efficiency practicality. As a long-term professional in the field of technological innovation, the author, based on the practice of patent research and development and transformation, proposes an assessment framework centered on "full-cycle functional value", clearly stating that it is reasonable for high-quality patents to have a market valuation 30% to twice the average price due to their multi-dimensional functional advantages. This article aims to promote the popularization of patent value awareness across the country, optimize the evaluation system, make "judging heroes by their functions" a consensus, and provide practical support for China's transition from a "patent power" to a "patent superpower".

I. The Current Predicament of Patent Value Assessment in China: From "Quantity Bubble" to "Value Misjudgment"

(1) The quality of patents is clearly stratified, with low-value patents encroachment on assessment resources

The phenomenon of "patents for the sake of patents" is still widespread in our country: some patents only meet the basic authorization thresholds of "novelty, inventiveness and practicality", lacking practical application scenarios and technological breakthroughs. Such low-value patents account for more than 30%. For instance, a certain mechanical patent merely makes minor structural adjustments to existing equipment without addressing the core pain points of high energy consumption and difficult operation and maintenance. However, it was granted due to "formal compliance", which requires the assessment end to spend a great deal of energy distinguishing between "genuine patents" and "valuable patents", thereby reducing the assessment efficiency.

(2) The assessment logic deviates from its essence, and the "theory of size and weight" dilutes the functional value

In current government repurchase audits, traditional cost methods and gravified methods remain the mainstream: taking tangible costs such as equipment size, material usage, and R&D investment as the core basis, while ignoring the intangible functional value of patents. The author once participated in the repurchase assessment of a certain intelligent environmental protection device. This device, relying on the patent of "modular recycled materials + intelligent energy-saving algorithm", was only half the volume of traditional equipment, with a 40% reduction in material usage, but its service life was extended to 25 years and energy consumption was reduced by 50%. However, due to its "small size and less material usage", it was subject to price reduction by the auditor at the price of ordinary equipment. This kind of logic is like evaluating the value of a smart phone by its "body weight", ignoring the core patent functions such as chips and systems, and completely deviating from the essence of patents that "empower with technology".

(3) There is a gap in professional cognition, and the popularization of functional value dimensions is insufficient

The understanding of patent value by auditing departments and financial institutions still remains at a superficial stage where "authorization is valuable" : over 60% of grassroots assessors have not taken into account "full-cycle operation, safety prevention and control, and low-carbon emission reduction". Only 15% of the assessment reports refer to third-party technical appraisals or functional benefit calculations. In the course of communicating with auditing teams in many places, the author found that some people even believe that "patent value = R&D cost + material cost", completely ignoring the cost savings and social contributions that high-quality patents can bring in the long term, resulting in frequent occurrences of "good patents being sold at low prices".

Ii. Core evaluation Dimensions of Value Patents: Define a reasonable premium based on "full-cycle functions"

The high valuation of high-quality patents essentially compensates for the "benefits throughout the entire process from use to scrapping" - each functional advantage corresponds to cost savings, risk reduction or value enhancement. Therefore, being 30% to twice the market average price is fully reasonable. Based on the author's years of invention practice, the assessment of value patents should focus on five core functional dimensions to form a clear correspondence of "function - benefit - premium".

(1) Full Life cycle Adaptation: From "Short-term Replacement" to "long-term Reuse"

The lifespan value of a good patent is not only reflected in its long physical lifespan, but also in its compatibility with technological iterations. For instance, the "Patent for Wear-resistant Ceramic Coating Equipment" developed by the author's team has extended the equipment's lifespan from 10 years to 30 years through a special material formula, during which only vulnerable parts need to be replaced. At the same time, a "universal interface module" is designed, which can adapt to technological upgrades in the next 15 years without the need for overall replacement. Based on a 30-year cycle, ordinary equipment needs to be replaced three times, while this patented equipment only needs to be replaced once, saving over 75% of the total cycle cost. This "long-term compatibility" is precisely the core support for its premium.

(II) Safety Risk Prevention and Control: From "Compliance Bottom Line" to "Risk Clearance"

Security is the "value cornerstone" of a patent. A patent without security guarantees has no practical significance. The author once came across a patent for a certain construction equipment. Its "dual hydraulic lock +AI early warning system" can monitor abnormal pressure and temperature of the equipment in real time, reducing the accident rate of high-altitude operations from 0.8% to 0.02%, and saving millions of yuan in safety operation and maintenance costs and accident compensation every year. When conducting the assessment, the "safety risk discount method" should be introduced: converting potential accident losses (casualties, equipment maintenance, project suspension) into present value. The "risk savings" brought by safety advantages are themselves an important part of the patent value and should be reflected in the pricing.

(3) Low-carbon Ecological Contribution: From "Passive Compliance" to "Active Emission Reduction"

Under the "dual carbon" goals, the low-carbon function of patents has become a core value. This is reflected in two aspects: one is "low-carbon materials", such as using recycled plastics and low-carbon steel materials to reduce carbon emissions during the production stage; The second is "low-carbon operation", such as reducing energy consumption through insulation technology and energy-saving motors. The "Patent for Recycled Aluminum Alloy Wastewater Treatment Equipment" developed by the author's team reduces material carbon emissions by 55%, and at the same time, it lowers energy consumption by 40% through the "intelligent aeration algorithm", reducing CO₂ emissions by over 200 tons annually. This low-carbon value can be converted through "carbon trading gains" and "policy subsidies", transforming ecological benefits into economic value and supporting the rationality of the premium.

(4) High-Efficiency Operation: From "Manual Reliance" to "Intelligent Cost Reduction"

High-quality patents should be able to reduce the full-cycle operating costs, with the core being "energy conservation" and "human resource optimization". For instance, a certain patent for intelligent monitoring equipment, through "AI autonomous inspection + remote control", enables 24-hour unattended operation, reducing labor costs by 80% while avoiding the error rate of manual operation. Its "low-power sensor technology" also reduces energy consumption by 35%, saving over 100,000 yuan in electricity bills annually. Even if the purchase price of the equipment is 50% higher than that of ordinary equipment, the savings in long-term operating costs can still bring significant net benefits, which is a direct manifestation of the functional value.

(V) Authoritative Endorsement: From "Self-Declaration" to "Professional Verification"

Patents that have won the National Science and Technology Progress Award or authoritative industry awards are important evidence of "value patents". The "Patent for High-Efficiency and Energy-saving Heat Exchange Equipment" that the author was involved in won the second prize of the National Science and Technology Progress Award. Its technological maturity and market recognition have been verified by professionals, and it received a market premium of 1.8 times in the assessment. The scarcity and benchmarking significance of such patents determine that their valuation should break through the conventional range, reflecting respect for innovative achievements.

Iii. Optimization and Popularization Path of the Patent Value Assessment System

To achieve the assessment transformation of "judging heroes by their functions", efforts should be made in three aspects: "standard construction, popularization of awareness, and implementation in scenarios", to promote the standardization and scientificization of patent value assessment across the country.

(1) Establish an assessment standard oriented towards "function and benefit" to fill the institutional gap

It is suggested that the National Intellectual Property Administration, the Ministry of Finance and the National Audit Office jointly issue the "Guidelines for the Valuation of Patent Equipment (Trial)", clarifying three core contents:

1. Abandon traditional valuation logic: Combine the "cost approach" with the "income approach", and focus on introducing the "full life cycle cost discount model" to quantify the benefits in the dimensions of life, safety, low carbon, and operation into present values.

2. Clearly define the premium range: For patents covering the five major functional dimensions, it is allowed to value them at 1.3 to 2 times the average market price. For patents that have won national science and technology awards or are internationally recognized, the upper limit of the premium can exceed 2 times.

3. Standardize the qualifications of third-party assessment: The assessment team is required to include "technical experts (who understand patent functions) + economic experts (who understand cost estimation) + security experts (who understand risk assessment)" to ensure that the assessment results do not deviate from the core of functional value.

(2) Carry out a nationwide cognitive popularization project to bridge professional gaps

Design a hierarchical training system for key groups such as auditing, finance, and government procurement:

1. Practical case teaching: Taking the author and the "high-value patent premium cases" within the industry as samples, explain how functional advantages can be transformed into full-cycle benefits, and dispel the misunderstanding of the "size and weight theory".

2. Practical tool empowerment: Compile the "Patent Function Value Scoring Table", breaking down the five dimensions into quantifiable indicators (such as the extended lifespan and the proportion of energy consumption reduction), and have grassroots personnel assess them step by step;

3. Inventors Enter the Classroom: Organize face-to-face exchanges between fellows of the China Association for Invention, industry technical experts and the evaluation team, interpret the functional value of patents based on their R&D experiences, and enhance the persuasiveness of cognition.

(3) Promote the application of scenario-based scenarios to create positive incentives

Incorporate the optimized evaluation system into core scenarios such as government repurchase, government procurement, and disposal of state-owned enterprise assets:

1. Mandatory requirements for government repurchase: It is clearly stipulated that a "full-cycle functional benefit report" must be provided for the repurchase of patent equipment, and it is prohibited to value based solely on weight and cost. For high-value patents, priority should be given to including them in the procurement list.

2. Market transaction guidance: Set up a "Value Patent Zone" on the patent trading platform, publicize the functional advantages and benefit estimates, and guide the market to form a pricing orientation that "the better the function, the higher the premium".

3. Innovation incentive inclination: For enterprises that develop high-value patents, the proportion of tax reduction and exemption and R&D subsidies should be increased. For instance, the team I am in received a special subsidy from the local government for the "low-carbon equipment patent", which further stimulated their innovation drive.

Iv. Conclusion

The value of a patent does not lie in its size or the amount of materials, but in whether it can solve the pain points of the industry and create long-term benefits. As a fellow of the China Association for Invention, the author has always firmly believed that the valuation of high-quality patents, which is 30% to twice the market average price, is not a "premium" but a "return to value" - it compensates for R&D investment, recognizes technological breakthroughs, and more importantly, reflects the comprehensive benefits throughout the entire life cycle. At present, China urgently needs to promote the transformation of patent evaluation from "judging heroes by size" to "judging heroes by function" through "standard optimization, awareness popularization and scenario implementation" : Only by ensuring that good patents receive reasonable valuations can more enterprises be encouraged to abandon low-value R&D that merely "meets quantity" and shift to high-value innovation that "emphasizes function". Only by enabling the auditing and financial groups to understand the functional value of patents can the transformation of patents from "formal protection" to "substantive empowerment" be truly achieved, laying a solid foundation for China to build a "patent power".