SSIPEX is a very interesting experiment that aims to facilitate technology transfer and commercialization in China. It may be a valuable means of communicating to Chinese entrepreneurs that monetizing external IP can be more efficient than developing their own technologies in isolation. Yet, the attempt to establish the center has encountered many challenges. It is difficult to judge their exact origins but these challenges may stem from inadequate data protection and insufficient participation. With only 2752 patents focusing on integrated circuit technologies from 87 vendors and manufacturers in its core database<sup>8</sup> , the SSIPEX has not achieved the critical mass needed to make an exchange platform particularly efficient. While it is certainly an important center for technology transfer, its IP database may not be sufficiently developed to stimulate participation. There is a typical chicken/egg problem in this aspect of any exchange. An efficient market will stimulate participation, but an efficient market relies on adequate levels of participation. Another important challenge is the need for anonymity. The publication of patent details and the desire to exchange them can be used as competitive intelligence in many industries. Anonymity is required to maintain competitive strategies and avoid risks of litigation (Arora, Fosfuri, and Gambardella 2001). Companies may be seeking patents to protect product lines from infringement lawsuits. An unsuccessful bid for a patent license could turn a firm into a litigation target. Participants must be assured that the exchange intermediary adequately protects sensitive data while making enough information accessible to attract potential buyers. These are difficult tradeoffs, since any exchange of patent rights relies on effective and comprehensive due diligence procedures and compliance monitoring mechanisms. SSIPEX unfortunately does not possess the resources necessary to monitor the compliance of its small Chinese members with relevant IP laws. A member could gain access to a valuable technology and then transfer it to others without proper authorization, thus inhibiting the development of SSIPEX as uncertainty about enforcement stops IP owners from making their technologies available (Chesbrough 2011). The lack of transparency in the Chinese IP system and insufficient evidence of past performance based on legal cases may deter IP owners from participating. Strengthening the institutional context in which these actors operate may go a long way in fostering security and certainty for IP owners willing to license their technologies.

# **Technology Transfer and Commercialization Infrastructure**

Successful technology commercialization relies on coordinated action between research universities, technology transfer offices (TTOs), and industry. It requires a mix of human, financial, and institutional resources. Industry is usually the primary channel for commercialization and universities lack direct control over the amount of license revenue generated. The success of licensees, and thus the license income generated, depends on market factors such as timing, funding, and marketing (AUTM 2007). In the USA, while some licensing income naturally goes to developers and research units, federal law often dictates that a large proportion be channeled back to research at the campus level. Licensing income helps universities invest in infrastructure to support students and capital projects, and also directly funds both student and faculty researchers. ‘Absent this licensing income, a research institution’s ability to create the impact, through the new innovation disclosures, new licenses, and new patent, copyright and trademark filings, would diminish’ (AUTM 2007). Most importantly, technology commercialization relies on a robust innovation ecosystem. Factors that help

> 8 http://www.ssipex.com/ssipex/index.asp?language=English#

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