Abstract: Taking China’s companies on GEM from 2009 to 2018 as samples, this paper explores the phenomenon of patent surge of companies before their going public and examines the impact of patent surge on their patent quality and their business performance. The results show that: firstly, there are obvious patent surges before the IPO of GEM companies, which is manifested by the sharp increase of patent applications before the IPO and the stagnation of the growth after the IPO. Secondly, the behavior of patent surges of the companies on GEM reduces the patent quality and their long-term business performance after IPO. Thirdly, compared with the inventive patents, the patent surges of non-inventive patents are more obvious before IPO. Fourthly, in 2014, the China Securities Regulatory Commission (CSRC) made some rules concerning the disclosure of patent information in the prospectus of the listed companies on GEM, which have changed the companies’ patent application strategies, the time of application is earlier and the proportion of the patents applied but not authorized before going public is lowered. Finally, enterprises’ patent surges before IPO may lead the investors to overestimate the value of the companies, which would harm the interests of investors. These research conclusions are conducive to the understanding of the institutional causes of the “patent bubble”phenomenon in China and have certain referential value for the improvement of GEM system and the realization of the transition of the Registry System.

Key words: IPO, patent, business performance, investor protection