Original Title: Notice of the Shandong Provincial Market Supervision Administration and the Shandong Provincial Department of Finance on Issuing the Implementation Rules for the Cultivation and Incentive Program for High-Value Patents in Shandong Province
Article 1: In accordance with the requirements of the “Notice of the People’s Government of Shandong Province on Issuing the 2022 Policy List for High-Quality Development Under the Principle of ‘Seeking Progress While Maintaining Stability’ (First Batch),” these Implementation Rules are formulated to ensure the proper implementation of the cultivation and incentive program for high-value patents.

Article 2: The “incentives for the cultivation of high-value patents” referred to in these Rules refer to tiered incentives allocated by the Provincial Market Supervision Administration and the Provincial Department of Finance to various cities. To achieve the provincial goal of doubling the number of high-value patents, these agencies have allocated 100 million yuan based on each city’s comprehensive performance in the cultivation, utilization, protection, management, and service of high-value patents during the previous year.

Article 3 The primary objective of high-value patent cultivation is to support cities in fostering a cohort of highly competitive high-value patents capable of leading industrial development, thereby significantly enhancing the level of patent utilization and commercialization. The goal is to double the number of high-value patents in the province within approximately three years, based on the 2020 baseline.

Article 4: Method of Funding Allocation

Funds for the cultivation of high-value patents are allocated to cities using a factor-based method, with the primary allocation factors including:

1. Intellectual property pledge financing and overseas-authorized invention patents. Municipalities shall, in accordance with the "Notice of the Shandong Provincial Market Supervision Administration and the People’s Bank of China Jinan Branch on Issuing the <Guidelines for Applying for Interest Subsidies on Intellectual Property Pledge Financing for Small, Medium, and Micro Enterprises in Shandong Province>" (Lu Shijian Fa [2021] No. 9),the "Notice of the Shandong Provincial Market Supervision Administration on Issuing the <Implementing Rules for the Use and Management of Intellectual Property (Patent) Funds of the Shandong Provincial Market Supervision Administration>" (Lu Shijian Fa [2020] No. 11), to submit reports on interest subsidy funds for intellectual property pledge financing and the status of overseas-authorized invention patents to the Provincial Market Supervision Administration for record-keeping. The Provincial Market Supervision Administration will then calculate and determine the subsidy funds for each city.

2. Patent Awards. Based on the number and grade of projects in each city that received the China Patent Award or the Shandong Provincial Patent Award in the previous year, and in accordance with the award standards stipulated in the "Notice of the General Office of the Shandong Provincial People’s Government on Issuing the Shandong Provincial Patent Reward Measures" (Lu Zheng Ban Zi [2021] No. 100), the Provincial Market Supervision Administration will calculate and determine the specific award and subsidy funds for each city.

3. Cultivation of High-Value Patents. Awards will be calculated and tiered based on each city’s inventory of invention patents and high-value patents from the previous year.

4. Commercialization and Utilization of Intellectual Property. Rewards will be calculated and tiered based on each city’s number of patent transfers and licenses, as well as their growth rates, from the previous year.

5. Intellectual Property Protection. Rewards will be calculated and tiered based on each city’s performance in intellectual property protection assessments from the previous year.

6. Intellectual Property Management and Services. Rewards will be tiered based on the effectiveness of each city’s reform and innovation efforts in the areas of intellectual property deregulation, streamlining administration, and improving services.

For specific evaluation indicators, please refer to the attached “Evaluation Indicator System for the High-Value Patent Cultivation Incentive Program.”

Article 5: Fund Approval and Disbursement

(1) Submission of Applications. By the end of March, each city shall submit to the Provincial Market Regulation Bureau the following for record-keeping: information on interest subsidies for intellectual property pledge financing and details regarding overseas-authorized invention patents. Information regarding patent awards, high-value patent cultivation, intellectual property commercialization and utilization, intellectual property protection, and intellectual property management services shall be calculated and categorized by the Provincial Market Regulation Bureau based on relevant data and performance outcomes; no separate submission is required.

(2) Fund Calculation. Based on the information submitted by each city, the Provincial Market Regulation Bureau shall verify the relevant indicators within one month after the announcement of results or data regarding patent awards, high-value patents, and patent transfers or licensing. It shall calculate the funding amounts and weights in accordance with the evaluation indicator system, submit a funding allocation plan to the Provincial Department of Finance, and submit it to the Office of the Provincial Science and Technology Innovation Committee for approval in accordance with relevant provincial regulations on the management of science and technology innovation funds.

(3) Disbursement of Award and Subsidy Funds. After the fund allocation plan is reviewed and approved by the Provincial Science and Technology Innovation Committee, the Provincial Department of Finance shall disburse the award and subsidy funds to each city.

Article 6: The allocation of incentive funds shall adhere to the principles of openness, fairness, and transparency. The fund allocation plan shall be publicly posted on the website of the Provincial Market Regulation Bureau for a period of no less than five working days.

Article 7: Each city shall maximize the efficiency of fund utilization by coordinating provincial incentive funds with local fiscal funds, optimizing the scope of use, and prioritizing the implementation of relevant provincial government policies.Funds shall be coordinated for use in key areas such as the cultivation, utilization, protection, management, and services related to high-value patents, thereby creating a virtuous cycle where the goals for cultivating high-value invention patents and the incentive funds mutually reinforce one another. Incentive funds shall not be used to subsidize expenses such as patent applications, annual patent fees, or agency services; efforts shall be made to effectively enhance the standardization, security, and effectiveness of fund utilization.

Article 8: Filing of Fund Utilization Plans. The Market Regulation Bureau of each city, in conjunction with the local Finance Bureau, shall compile and submit a fund utilization plan for its region. Within 60 working days after the funds are allocated, the plan must be submitted to the Provincial Market Regulation Bureau and the Provincial Department of Finance for filing.

Article 9. The Provincial Market Regulation Bureau and the Provincial Department of Finance shall monitor and supervise the high-value patent cultivation work and the use of incentive funds, and conduct performance evaluations. If it is verified that incentive funds have been fraudulently obtained or used in violation of regulations, the Provincial Department of Finance shall recover the funds.

Article 10: The Provincial Market Regulation Bureau and the Provincial Department of Finance shall be responsible for interpreting these Measures and shall revise them as appropriate based on implementation circumstances.

Appendix: Evaluation Indicator System for High-Value Patent Cultivation Incentives.docx