An Engine to Enterprises' Patent Management: Patent Partner Plan

Xenia Li, China IP,[Patent]

 

At CloudMinds, there's a "Monday phenomenon", when the IP department will always find its mailbox filled with patent applications sent by the company's research and development staffs. Why would such a phenomenon happen on Monday morning?

The fact is that the staffs usually dedicated to research and development in their working days, leaving themselves only the weekend to accumulate innovative ideas for patent application. This motivation stems from the incentive effect of "Patent Partner Plan".

The development of an enterprise's IP should be a combination of the protection from risks, the accumulation of quantity, and the full embedding of processes. But in practice, the new ventures still face many problems in patent work, such as inventors' lack of willingness to innovate, the difficulty to acquire high-value patents, the low efficiency of patent operation transformation, and the unbalanced input and output of patent administrators. Wang Zhenkai, legal director of CloudMinds, pointed out that for a start-up, the overall patent management logic should be to establish a healthy value exchange system within the enterprise. The innovation-driven development of enterprises not only requires the development of technology but also of mechanism. The key lying behind the "Patent Partner Plan" is to turn employees into partners, and convert patent inventions into investment. The quality of patents determines the value of the subsequent transformation and the process of rights protection, as well as the level of employees' income. 

 

Patent Partner Plan

As an innovative incentive plan, the core content of the Patent Partner Program is divided into three parts:

·Service invention rewards: A reward of USD 1,000 will be given to inventors for an invention patent.

·High-quality patent rewards: A SEP (standards essential patent) will be rewarded with USD 10,000 to its inventor and relevant personnel.

·Patent in force rewards: 10% of the income generated from patent litigation or transfer, will be used to reward relevant personnel.

 

In summary, the core of the "Patent Partner Plan" is to explicitly propose high-value patent-oriented and operational-oriented incentives. The Patent Partner Plan draws on the concept of "business partner," which turns employees into partners so they could achieve consensus, co-responsibility, co-sharing, and cocreation with the enterprise.

A patent, from application to authorization to protection, takes many years and requires efforts and maintenance. An incentive patent layout requires enterprises to shift their focus from mere results to the whole process, during which the engineers, together with the R&D personnel and relevant personnel could produce and maintain their patents, select technologies for a value realization. Enterprises, on the other hand, could ensure system-level protection and clarify benefit-sharing mechanisms, and abide by them. To implement the value of benefit sharing in this process, it is necessary to clarify the roles of patent inventors, engineers, and relevant personnel. Patent Partner Plan stimulates the creation of scientific results in all aspect by establishing an IP benefit-sharing mechanism that "everyone can participate" featured by "forever benefit" and "unlimited reward", and by promoting IP innovation to all employees during the whole process. The core concept of Patent Partner Plan is to convert employees' completing service inventions into investment behaviors. The enterprise helps employees to convert innovations into patents for protection, and the quality of their patents is related to the subsequent transformation, the process of safeguarding rights and the level of their income. The essence of this mechanism is to reshape the income distribution between employees and enterprise.

On Monday mornings, Wang Zhenkai receives the most emails. He calls it "Monday phenomenon". Wang explained, "Patent Partner Plan is greeted by employees with high enthusiasm due to its clear revenue, predictability, and stable rules, as a result, they use weekends to write patent application proposals." The focus of enterprises' IP management lies in employees. In Wang Zhenkai's view, the core of creating high-value patents is to cultivate talents with high-value patent thinking, and Patent Partner Plan can lead employees through the whole process of patents from birth to operation.  

 

The impact of patents on business management

Enterprises' understanding of patents is continuously updating, changing from traditional quantity-focused understanding to the pursuit of high-value patent operation, from the simple patent attack and defense mode to patent benefit-sharing. As the main body of business practice, enterprises should not only look at the issue of patents as spears and shields, but put patent at the basis of enterprises' cooperation and winwin.

When referring to the role of IP in the enterprise, Wang Zhenkai mentioned that "IP has different effects on different types of enterprises, but it is especially important for start-ups." Because the new economic model has introduced a large number of new unicorn enterprises with a high starting point and development speed, attracting global investors, and thus placed high demands on IPRs.

IP management is divided into three modes. First, as a business model, enterprises seek to use IPRs to make achievements in business competition and become industry leaders. The second model is to use IP as an integral part of the business mode. The third is to use IP as a "moat" for start-ups and the value it carries.

"High-quality patents depend on technology, market and law," said Wang Zhenkai. Patent itself is an external form of technical legalization, inseparable from technology. However, the follow-up value of a patent does not depend entirely on the value of the patent itself, but on the degree of recognition that the technology it carries can be obtained in the market. "IP managers cannot make laws; instead, they must pay attention to the technology carried by the law and ultimately what kind of market it can reflect on," explains Wang Zhenkai. "More specifically, utilizing IP to incite technology and further impact on market trend, should be the goal for any enterprises."

Patent Partner Plan is an effective means of accomplishing this goal. Every enterprise has a logistic of patent operation. Some enterprises attach importance to patents because they have "been through hardships", some have tasted the "sweetness", but more enterprises have gone through neither. They need a driving force, that is, to build an innovation culture within the enterprise.

 

The transformation of patent concept for enterprises

The construction of an innovation culture within an enterprise requires changes in the concept of patent, turning employees into partners, and engaging employees in patent operation. The implementation of the Patent Partner Plan, proposed by Wang Zhenkai, is that enterprises should achieve "consensus, co-responsibility, co-sharing, and co-creation". Specifically, enterprises must reach a consensus on patent innovation and benefit sharing with employees. This consensus is not only a short-term commitment, but more of long-term persistence and cultural heritage. Patent innovation originates from enterprises and is implemented by employees, both share the responsibilities. What's more, the company should also give full play to the advantages of each employee and form a cycle of "value creation-value appreciationvalue distribution". During the process, the most crucial is to establish a consensus of co-creation, so that enterprises, inventors and relevant personnel can form a mechanism to mobilize the "value creation" at the front end through "value appreciation" and "value distribution".

The traditional patent innovation mechanism requires employees to deliver innovative results to enterprises, which separates patent inventors from the operators. As a result, an institutional barrier for operational transformation in patent management could be established. Patent Partner Plan expands patent invention into patent investment management, transforms technology invention into a concept of investment, reshapes the model of invention interest behavior of enterprises and employees, builds symmetry between enterprises and employees, and gives new meaning to patent management.

Patent innovation is no longer an employee's oneway service, but a multilateral interest-sharing between employees and relevant personnel. It is no longer the inventor's own business but involves patent inventors, engineers, research and development staffs, and relevant personnel, to co-create for co-benefit. Employees' lack of enthusiasm can be solved through a transformation from "enterprises want me to invent" to "I want to invent", turning patent innovation into a voluntary behavior. Patent becomes the co-creation between employees and enterprises, realizing the rational placement of patent ownership and income rights.

Every Monday noon, Wang Junkai organizes the award ceremony for newly promoted partners with the CEO issuing the reward. "Such a ritualized approach allows employees to have a deeper understanding. In most times, the implementation of any policy reflects a requirement for enterprises, but ultimately, it needs to be incorporated by employees as a guideline for their business behaviors."

As legal director, Wang Zhenkai attaches such importance to IP because CloudMinds is specialized in artificial intelligence, which is a typical IP-intensive industry, and the key to development and growth lies in IP and independent innovation. With Patent Partner Plan, CloudMinds has applied for nearly 900 patents in three year, 80% out of which were PCT patents and 95% or more were invention patents, with an average annual patent application of 200, ranking in the forefront compared with enterprises of the same size. The core research and development team applied for an average of 5 patents per person, far higher than the patent output rate of larger enterprises.

 

To have a glimpse of his IP insight, China IP talked with Wang Zhenkai on Patent Partner Plan and patent management.

 

Q: What role does IP play in an enterprise, especially in a start-up?

Wang Zhenkai: IP has different effects on different types of enterprises, but it is especially crucial for start-ups. We are in a new economic trend that requires enterprises to start with a high starting point and development speed, which places high demands on enterprises' operation and management, especially IPRs.

 

QWhat do you think is the most important in an enterprise's IP management?

Wang Zhenkai: IP management is like a car. A car needs engine, capital, drive, but the most critical is gas, which is exactly what Patent Partner Plan is. An enterprise can never  run without gas.

We have established a system of modular management for IP, which is part of our enterprise IP strategy. We have developed eleven modules, covering from strategy, execution, talent development, tool and so forth. However, what it reflects is a culture, a partner culture.

 

Q: You mentioned that "culture is the driving force of an enterprise". Other than Patent Partner Plan, is there any action an enterprise can take to further IP development?

Wang Zhenkai: The Partner Patent Plan is just a base. We are still in the phase of patent defense, so our main goal is to increase our defense abilities. But some time in the future, we might enter into a stage to combine patent defense and attack. That is to say, our patent strategy might change in the future, but not our culture.

 

Q: You mentioned the concept that "IP is technology plus market and law", how does it work in practice?

Wang Zhenkai: Patent itself is an external form of technical legalization, inseparable from technology. But the follow-up value of a patent does not depend entirely on the value of the patent itself, but on the degree of recognition that the technology it carries can be obtained in the market. That means, in practice, the value of IP mostly reflects on the market.

I think that to manage IP cannot focus solely on the law, attention also needs to be paid to the technology carried by the law, and ultimately, what kind of market it can reflect on. More specifically, utilizing IP to incite technology and further impact on market trend should be the essential goal for any enterprises. It is not just the scope of protection or how much money we can make that matters the most, which is merely a result, but what business tool or plan we can incorporate in the process.

 

Q: So Patent Partner Plan is such a tool?

Wang Zhenkai: Yes. Patent Partner Plan is an internal operational logic of our company. Establishment of such an innovation culture is possible to drive the enterprise's development. We hope it can achieve such a goal, and in practice, it is possible to do so.

For example, some of our employees left and started their own company; they first called me and asked me for advice on what IP issues they should focus on.

I always think that the most important "product" of enterprise culture is its employees. We spend a lot on cultivating high-value patent, in result, we might achieve some high-price patent, but most importantly, we have employees who're aware of patent's value. If an enterprise can cultivate more employees like this, it will be easier for us to establish a society that protects and respect IP.

The core of Patent Partner Plan is to let employees voluntarily become inventors, and allow them to achieve whatever they want to.

 

Q: You mentioned that the average annual patent application had reached 200, are these patents all authorized and in force?

Wang Zhenkai: Our authorized patent rate is relatively high, but I do not want to put too much emphasize on it. What I want to stress is that patent should be a link or a bearing in business operation and management, rather than just a result.

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