China’s Haier rejects Not Invented Here Syndrome to embrace open innovation 12 Dec 14
IAM reported last week on various indications that underline China's rapid development in the field of IP strategy. High-value IP and technology driven deals, the emergence of patent aggregation funds, the entry of foreign players, growing antitrust scrutiny of licensing and persistent talk of big-ticket disputes all point to a country where the IP marketplace is on the rise.
Another signifier of a sophisticated IP economy is the prevalence of IP-based collaboration between different parties in order to develop and improve technologies and bring them to the consumer market. However, as reported in the most recent issue of IAM magazine, most respondents to our inaugural Asia IP Elite Benchmarking Survey stated that ‘enabling collaboration with third parties’ was low down on their list of priorities when it comes to strategic reasons for owning IP assets. ‘Freedom to operate’, ‘protection of products and services’, ‘defence from lawsuits’, ‘exclusion of competitors’, ‘licensing revenue’ and ‘brand protection’ were all rated as more important.
Perhaps that shouldn’t be too much of a surprise, particularly when you consider that open innovation remains a relatively novel concept to many rights holders in the more established IP landscapes in North America and Europe.
Nevertheless, Chinese home appliances manufacturer Haier Group sees open innovation as a central pillar of its business strategy. At IPBC Asia in Shanghai I spoke to Xinming Wan, who is chief engineer of the open innovation team within the Qingdao-based company’s corporate R&D centre. You can find out more detail about Haier’s open innovation programme in my interview with Wan, which will be available to watch here next week.
Wan explained that, with technology developing at such a rapid pace, it is simply not practical to try to develop all of the IP needed in-house or to obtain it through external acquisitions. Therefore, Haier is devoting significant resources to source technology partners that can help it to get cutting-edge products to market more quickly.
One manifestation of this is the recently-launched Haier Open Partnership Ecosystem (HOPE), an online platform aimed at linking technology vendors and customers. While HOPE is intended to be a network used by third parties, Wan confirms that it also helps Haier itself to source new technologies and enter into collaborative partnerships with other rights holders.
Speaking at IPBC Asia this week in Shanghai, Paul Lin, president of Beijing-based IP firm Zhigu, said that a majority of Chinese patent assets originate from universities, research institutions and individual inventors. That means that there is a wealth of Chinese IP out there for which commercialisation has not even been considered. Much of that IP could – setting aside the question of quality for a moment – be very useful indeed to Chinese corporates, and collaborative endeavours such as open innovation are often going to be key to getting the technologies underpinned by the patents out of laboratories and garden sheds and into the Chinese products that are sold the world over. We can expect to see many other companies in China following Haier’s path.
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