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Bra Asks Yangfei Chao: Who Owns the Copyright to Novels Written by AI?

Guest:Yangfei Chao
CEO of IP Master(, a Chinese intellectual property trading platform), a well-known expert in the field of intellectual property in China, Chinese patent agent. He has served as the intellectual property officer in leading companies such as Kingdee Software, Vimicro Group, and Sogou. He has deep research and insights into the standardization and systematization of corporate intellectual property, the construction of patent value assessment systems, and the handling of professional and difficult intellectual property cases.
Hosted by Sam Ng (AKA: Bra)
Founder of ServBay, Secken and DNSPod, former General Manager of the SME Product Center at Tencent Cloud, cybersecurity expert, domain and DNS technology expert, webmaster, China Europe International Business School (CEIBS) EMBA.

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I've researched your career path, from a technician at Kingdee Software to the intellectual property business officer at Sogou. This career transition is quite significant. I'm curious, what prompted you to enter the intellectual property industry? And what led you to start your own business? What are the significant milestones you've experienced?"

Yangfei Chao:

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After graduating from college, as a technician, I applied for some patents in my spare time and began to explore intellectual property. By chance, when our group's product was considering entering foreign markets, we needed someone familiar with both technology and intellectual property. Thus, I transitioned from a technical position to the group's intellectual property department, marking my entry into the field. After several years in the industry, I noticed many problems, such as the gap between our country's intellectual property development philosophy, service model, value operation, and customer coverage compared to foreign countries. So, I considered using internet technology to solve these issues, hoping to make professional, high-quality, low-cost intellectual property services accessible to all market entities in China.
While in charge of intellectual property at Sogou, I met my current partner, Tan Meng, who had been in the IP service industry for many years. We both realized the problems in China's IP industry, such as outdated development concepts, inefficient service models, high information barriers, low service value, and low customer coverage. Therefore, we hoped to use technology to transform the service model and reconstruct the value of the intellectual property industry. With this dream, I decisively left Sogou at the beginning of 2015 and founded IP Master.

It has always been a criticism from abroad that Chinese companies lack intellectual property and rely on copying and imitation to prosper. The chaos in China's intellectual property used to exist. Since joining the WTO, especially in the past five years, the state has placed great emphasis on intellectual property. What changes have occurred in China's intellectual property field? And how can we change foreign perceptions of this issue? Do you have any good methods?

Yangfei Chao:
The changes in China's intellectual property field are multifaceted. From the central government to district and county governments, all levels of leadership pay great attention to the development of the intellectual property industry and have introduced various incentive measures. The awareness of intellectual property protection among the Chinese public has significantly increased, especially among young people, whether they are starting AI, big data businesses, running bubble tea restaurants, or creating photography works. They all undertake intellectual property protection, which was unimaginable before. The number of intellectual property applicants in China has exceeded 10 million, meaning the coverage of intellectual property protection is very wide and is rapidly penetrating every corner of socioeconomic development. There has been a significant change in China's intellectual property protection environment, whether in protecting the rights of rights holders, punishing infringers, or improving the judicial and enforcement levels of intellectual property protection.
Regarding foreign criticism of Chinese intellectual property, we should view it from two aspects: on one hand, some Chinese companies have indeed infringed on foreign intellectual property; on the other hand, some criticisms are the aftermath of foreign companies not adapting to the rapid development of Chinese companies. To improve foreign perceptions of China's intellectual property development, it's not difficult; just focus on the following two aspects:
First, if every ordinary person does their job well and promptly protects every idea, design, algorithm, interaction, and work generated in their work, then our country's intellectual property strength will be incredibly strong.
Second, we must respect others' intellectual property. If we need to use someone else's intellectual property for commercial applications, then paying a fair and reasonable fee is necessary, just like we pay for listening to popular songs on Tencent Music today.

With the state's emphasis and support for the intellectual property industry, it is considered a sunrise industry in the market and media. However, the explosive growth and prosperity expected by the market have not yet appeared. Could you analyze why the intellectual property industry has not yet reached true maturity and prosperity? What impact do you think the wave of digital upgrades in various industries will have on the mature development of the intellectual property industry in the coming years?

Yangfei Chao:
This is a misconception. Intellectual property is indeed a sunrise industry and is flourishing. As a veteran of this industry, we can feel the huge changes compared to 10 years ago. However, because the development level of our country's intellectual property industry was so low in the past, even with significant progress, there is still a long way to go to reach the level of respect for intellectual property that Western countries have.
Ten years ago, our country only had a few hundred thousand applications for trademarks, patents, and copyrights, but by 2020, trademark applications will exceed 8 million, patent applications will surpass 4.5 million, and copyright registrations will exceed 5 million. The number of intellectual property infringement protection cases also jumped from tens of thousands to over 600,000.
Of course, there are still many obstacles to the development of our country's intellectual property industry, mainly reflected in low intellectual property quality, low cost of intellectual property infringement, high cost of rights protection, low level of intellectual property informatization, and the economic value of intellectual property not being fully released.
In recent years, with the widespread development of digital technology, the intellectual property industry has been significantly pushed forward, specifically manifested in:
First, the threshold for enterprises or individuals to apply for intellectual property has significantly decreased. Previously, professional service institutions were required for various evaluations and analyses, but now applications can be handled promptly online, on mobile phones, or via WeChat.
Second, the cost of intellectual property services has significantly decreased. Due to the development of digital technology, much of the work previously done by professional agents has been replaced by technology, thus significantly reducing service costs. For example, applying for a trademark used to cost more than 2000 yuan before 2015, but now it only costs 600 yuan, or even 321 yuan.
Third, the cost of intellectual property rights protection has decreased, and the cost of infringement has increased. Previously, rights protection required finding professional lawyers for various research, evidence collection, and litigation, which was costly, but the compensation for infringement was very low. With the development of digital technology, infringement behavior is easier to discover in a timely manner, significantly reducing the cost of rights protection.
Finally, the economic value of intellectual property is easier to realize. Previously, intellectual property was essentially just a certificate for decoration, and its economic value was difficult to reflect. With the deep development of digital technology, intellectual property transactions, pledges, financing, etc., have become more convenient, and the asset attributes of circulation have become stronger."

Some time ago, the well-known intellectual property unicorn in Guangzhou,, was pushed to the hot search for malicious wage arrears. This scandal has made us reflect. Did take too big a step and not control its finances well? Now everyone advocates "Internet Plus" and industrial upgrading, but what consequences will blindly emphasizing capital-driven scale leapfrog growth bring? Can you talk about the advantages and disadvantages of this model?"

Yangfei Chao:
I think there's nothing wrong with the path of capital-driven "Internet Plus" enterprises to achieve leapfrog development. The problem lies with the enterprise managers themselves.
As entrepreneurs, the founding core team needs to do two things well to avoid such situations:
First, don't forget the original intention and stay on the right path. There are too many societal temptations, and the attraction of money is too great. If entrepreneurs forget their original intentions and cannot control their desires, purely aligning with money, then it's highly likely that the enterprise will encounter problems. The tide feels invisible when it comes, but everything becomes clear when it recedes.
Second, work diligently and earnestly. The most important thing for the founding core team is to start with the end in mind, compare the development goals every day, and diligently solve every problem that arises in the process of achieving those goals. If the users and customers are satisfied, the development of the enterprise will naturally not be poor.

In addition to competitors in the intellectual property industry, such as, internet giants like Alibaba and Tencent have also entered the intellectual property industry. Facing fierce market competition, how will IP Master break through? Is the entry of giants into the intellectual property industry good or bad for you? What differentiated strategies will you adopt?

Yangfei Chao:
No single tree makes a forest. The entry of many powerful enterprises into the intellectual property industry is a good thing and is more conducive to the popularization and long-term development of China's intellectual property industry.
From the perspective of IP Master's development, our thoughts are as follows:
First, the industry market size continues to increase. With the entry of Alibaba Cloud, Tencent Cloud, and other internet enterprises into the intellectual property industry, the user coverage and market size of the intellectual property industry will rapidly increase.
Second, different original intentions and goals. Alibaba Cloud, Tencent Cloud, and others' layout in the intellectual property industry is more from the perspective of enterprise services such as birth, aging, sickness, and death of enterprises, integrating resources to achieve commercial goals. In contrast, IP Master's original intention is to make intellectual property accessible to every enterprise, to release the value of intellectual property, and to help enterprises achieve commercial success.
Finally, cooperation is greater than competition. Alibaba Cloud, Tencent Cloud, and others may not focus on what IP Master focuses on. Perhaps there is some competition at the shallow business level, but if Tencent Cloud wants to provide its enterprise users with satisfactory, professional, inclusive, and full life-cycle intellectual property services, then IP Master will be the most suitable partner. Of course, we have already made preliminary communication with the relevant teams of Tencent Cloud and are making progress.

Since the US-China trade war, the United States has continuously focused on China's intellectual property issues. This friction has also continuously prompted us to establish and improve the intellectual property system and related legal systems. What do you think of this international dispute, and what impact does it have on the intellectual property industry?

Yangfei Chao:
The background of this international dispute is the comprehensive game of national confidence and strength. As China rises rapidly in a way unexpected to the United States, the US does not know how to deal with this major change and accuses us of intellectual property infringement. This is something we need to understand.
The impact of the United States' accusations on our industry is mainly reflected in:
First, the improvement of national intellectual property protection awareness. The trade war launched by the United States against us, centered on intellectual property infringement, has made our people more clearly understand the importance of intellectual property.
Second, the acceleration of the improvement of the intellectual property legal system. In the past, our country faced some resistance in the formulation of intellectual property laws and regulations and infringement judicial enforcement. The oppression from the United States has accelerated our country's rapid improvement in the construction of the intellectual property legal system and infringement judicial enforcement system, creating a good intellectual property legal environment.
Third, it has forced our enterprises to accelerate independent research and development and transformation and upgrading. In the past, many of our enterprises adhered to the principle that independent research and development is not as good as borrowing from others. Due to the accusations and oppression from the United States, various industries and types of enterprises have accelerated independent research and development and strengthened intellectual property protection, further strengthening our industrial competitive strength.
The total amount of our country's intellectual property imports and exports increased from more than 20 billion US dollars in 2014 to 41 billion US dollars in 2019, growing rapidly.

Intellectual property covers a wide range, including well-known patents, copyrights, and trademarks. In the industry, companies like RightKnights, AndunIP's 'one-stop strike', and Sinofaith's full layout, what are IP Master's differentiated competitive points in these specific business dimensions? Can you share your thoughts on this?

Yangfei Chao:
The service models of tens of thousands of domestic intellectual property service institutions and institutions like AndunIP and Sinofaith are essentially the same, focusing on legal cases from a legal perspective. IP Master is based on data to explore the core value of intellectual property, helping enterprises achieve commercial success with intellectual property.

For many startups, intellectual property is very valuable. On the one hand, it protects the company's brand; on the other hand, it avoids malicious competition from other companies. However, intellectual property protection is often overlooked by startups. How can intellectual property be protected in a more efficient, faster, and cost-effective way for startups' brands, technology, and business models? What advice do you have for startups?

Yangfei Chao:
For startups' intellectual property protection, founders must deeply understand their business logic and core competitiveness, find professional and reliable agents, and focus on key layout protection.
For brands, before investing in publicity costs, startups should protect their brands. Prior trademark searches can help them avoid legal risks caused by passively relying on prior trademarks.
For technology and business models, protection should be sought through patents and trade secrets, adopting different protection measures according to different purposes. Intellectual property protection and business goals need to be consistent. Ultimately, development is always the first priority for a company.

As a partner of Tencent Cloud, do you have any good suggestions for future cooperation with Tencent Cloud? By leveraging the strengths of both sides, what differentiated services can we provide to users in the field of intellectual property?

Yangfei Chao:
IP Master and Tencent Cloud have a very good foundation and a broad future for commercial cooperation, and the pace and efficiency of promotion can be accelerated.
Combined, we can bring users comprehensive solutions to trademark full life-cycle risk and demand monitoring, copyright full electronic application, intellectual property transactions and assetization, patent quality control, and intellectual property intelligent custody.

Speaking of artificial intelligence, there's also a question about the ethical conflict between artificial intelligence and intellectual property. Recently, it's been popular to use artificial intelligence for literary creation, video and image creation, and code programming. I'm curious, can robots be considered legal authors if they participate in creation? Who owns the works created by robots? Will they be protected by copyright, patent, and copyright law? Regarding algorithms and big data involved in robots, how should their intellectual property be protected?"

Yangfei Chao:
The current intellectual property legal protection system is "human-centered", with the starting point and foothold based on humans. Intellectual property itself is based on whether intellectual property has innovativeness/originality as the basic standard. Humans have the ability to think and be inspired, creating intellectual property with originality and enjoying a series of rights brought by intellectual property.
If the era of strong artificial intelligence arrives and AI can independently create literary works, this will be a huge challenge and impact on the existing intellectual property legal system, and the entire intellectual property legal system will be reconstructed.
If robots capable of creative labor truly emerge, the more critical question facing us than "Is this their creation?" is probably "Are you human?" Algorithms and big data should still be protected based on algorithm invention patents.

The intellectual property market has huge potential. What do you think the intellectual property industry will look like in the next 5 years? How will the digitalization and intelligence of intellectual property develop and change?

Yangfei Chao:
China's intellectual property industry will penetrate every aspect of market economic life from both breadth and depth, with an economic scale exceeding one trillion; intellectual property resources and market economic entity needs will be fully integrated, the liquidity and assetization of intangible assets will accelerate, and economic value will be highlighted; platform-type enterprises with large-scale, low-cost service capabilities and core intellectual property data commercial operation capabilities will be greatly released.

Bra AsksYangfei Chao: Who Owns the Copyright to Novels Written by AI?

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