Over 130 attendees welcomed a new era for Sisvel in a city that is setting the pace for global innovation

On Tuesday 21 April, we celebrated the opening of Sisvel’s newest office with a half-day event at the Conrad Shenzhen, just two blocks away from where Sisvel China is now up and running. Around 130 people gathered to discuss the Chinese innovation economy, network with members of the local IP community and enjoy a cocktail reception as the sun set over the Qianhai District skyline.

Senior in-house IP executives from across China joined us for the event – some as speakers and many more as guests. It was a pleasure to see so many representatives of Sisvel patent pool licensors, along with many other companies that we have not yet had the opportunity to partner with. Some of the of the country’s largest implementers were also in attendance.

We are most grateful to everyone who took time out of their schedule during China’s always-busy IP Week to celebrate with us – particularly those who travelled for the occasion.

On stage, a variety of IP thought leaders shared their views on China’s dramatic transformation into a global innovation powerhouse and the role that patent licensing – including patent pool participation – can play in the nation’s journey towards becoming a net IP exporter.

Here are a few of the highlights.

Staggering R&D investments

Explaining why Sisvel has deepened its presence in China, President and CEO Mattia Fogliacco described the seismic shift that has made the country a centre of gravity for technology markets. This is visible, he said, “in standards participation, in manufacturing scale, in product cycles and increasingly in high-quality patent portfolios”.

Even more fundamentally, this evolution is a product of leading companies allocating massive amounts of capital to research and development. For Huawei, said Strategic Planning and Key Projects Department Head Emil Zhang, reinvesting 10% of revenue into R&D is a fundamental philosophy – though last year the actual amount surpassed 20%. It is much the same story at ZTE, reported IP Marketing Director Zhu Jin: annual research spend in the past year was well over RMB 20 billion, an outlay that creates an expectation of a “reasonable return” on investment.

The battery sector is perhaps the highest-profile example of Chinese firms’ research breakthroughs, earning them a global leadership position. CATL Vice President and Global Chief IP Officer Sun Mingyan told attendees that his company’s R&D budget equals the combined spend of all other players in the sector.

From left: Yixiong Zou of Sisvel, Sun Mingyan of CATL, Gao Rui of China Mobile, Chen Fangying of CICT Mobile, Zhu Jin of ZTE and Vincent Lin of Oppo

A laser customer focus

Huawei is famous for its unstinting commitment to its customers. In a fireside chat with Sisvel Chief Intellectual Property Officer Heath Hoglund, Zhang said that Huawei founder Ren Zhengfei frequently exhorts his teams to “focus on the mainstream – focus on serving your customers’ needs”. This, he said, is a key wellspring of innovation within the business: solve problems for your clients and good things will follow.

A similar mentality applies to the formation of a pool or any other kind of licensing solution. “We’re not setting out to create a programme like Wi-Fi Multimode for the sake of it – it starts with a need from industry,” explained Zhang. Successful pools come in many shapes and sizes. The most important element, he continued, is that “they focus on the mainstream, just like Huawei, and adjust to the vertical or market they are designed to serve”. That means knowing how to work with both sides and address needs in every segment of the customer base.

Heath Hoglund, chief IP officer, Sisvel and Emil Zhang, head of strategic planning and key projects department, Huawei

Balance is crucial

The throughline in two keynote presentations covering China’s policy and judicial landscape respectively was simple: balance.

Lei Xiaoyun, the former Director General of CNIPA’s Department of Intellectual Property Utilisation and Promotion, proposed three keywords that sum up the country’s ongoing evolution into what policymakers call a ‘strong IP nation’: ‘balance’, ‘value’ and ‘ecosystem’.

Lei Xiaoyun, former Director General of the Department of Intellectual Property Utilisation and Promotion, CNIPA

Balance is also a core element of how Chinese courts consider FRAND-related disputes, revealed Song Jian, former Presiding Judge of the Intellectual Property Tribunal at the Jiangsu Higher People’s Court. This reflects the fact that China has become a world leader not only in implementing standards-based technologies, but also in inventing them.

Song Jian, former Presiding Judge, Intellectual Property Tribunal, Jiangsu Higher People’s Court

It is also a key consideration in structuring a successful licensing programme, said China Mobile Communications Group Senior Counsel Gao Rui: “As a licensor, we know we have to put ourselves in implementers’ shoes and assess whether our licensing strategy is in line with the interests of the whole industry.” This goal of promoting overall industry growth, she added, is the basis for the company’s collaboration with Sisvel.

There is also an internal balancing act that must be conducted at the many Chinese companies that are both licensors and licensees. At Oppo, striking this balance is easy, reported Head of Patent Licensing & Monetisation Vincent Lin, because the company’s IP team is very clear that the main business comes first – even if a growing SEP portfolio has allowed it to shift from a “goalkeeper” to more of a playmaker. Most of the company’s licensing now takes place through patent pools, he explained.

Only scratching the surface

As impressive as the Chinese innovation landscape looks today, we are still in the early chapters of the story. In the IP domain, the country has compressed legal developments that took around 400 years to play out in the West into a span of just 40 years, observed Lei. One significant area of focus for policymakers appears to be promoting market-oriented commercialisation and use of IP rights. And as CATL’s Sun pointed out, adoption of licensing-based business models varies between sectors. The approach of China’s connectivity champions is being closely studied by up-and-coming innovators in other fields.

As our China office MD Yixiong Zou reiterated at the Shenzhen event, Sisvel is committed to powering China’s ongoing innovative rise – not only by working hand in hand with Chinese patent owners to design and deliver licensing programmes that reward their world-class innovations, but also by providing Chinese companies – including those which are also patent owners in our pools – with seamless access to essential rights on terms that allow them to compete and win in the global marketplace.

Thanks once again to all our friends and partners in China for the wonderful welcome. Here’s to the next chapter in Shenzhen and beyond.