19 Apr
2018

Cost remains top priority and concern for most patent owners in Taiwan

Managing limited budget resources remains concern number one for most corporate patent owners in Taiwan – with just a handful of exceptions proving the rule. That was the biggest takeaway on Tuesday as over 200 senior executives from the private and public sectors came together at IPBC Taiwan in Taipei.

Acer provides one typical example. Founded 40 year ago, the company is now transitioning beyond the hardware business, and moving into gaming and AI related products. Senior director of global licensing and litigation Kate Shang made clear that Acer’s IP executives are increasingly called on to think more like product managers, aligning patents to the company’s product and business map. Shang notes that “annual budget for patent application in Acer is very small and limited. We file lots of patents in Taiwan as Taiwan is cheaper.” Nevertheless, the company has ramped up filings, with 2,000 applications pending in the past three years, apart from the total 4,500 granted assets.

With many resources dedicated to filing, Shang explained that Acer tries to work collaboratively with vendors and partners to bolster its IP protection. She specifically mentioned Microsoft’s Azure IP protection platform as providing a good potential option when the company faces NPE assertions and needs to counter. She also suggested that her firm has a similar partnership with ITRI, a government backed R&D lab.

While Acer grows its patent holdings, other are thinking harder about whether and where to file. Spencer Yu, director of IP at AU Optronics, explained to the audience that there is no magic number or particular size of portfolio that’s ideal for any company. And no matter what budget demands, you can’t necessarily make do with a slim portfolio if you are a giant in the market.

TSMC, the world’s largest chip foundry, seems to be an exception that proves the rule when it comes to tight patent budgets in Taiwan. Donald McKenna, director of R&D legal division, stated that as the biggest player in its market, TSMC does not have to watch its portfolio spend as cautiously as some others. This is in part because in a cutthroat market, patents are seen as a key ingredient to keeping TSMC competitive. It is no surprise, then, to see TSMC appear once again in the top 10 recipients of US patent grants. McKenna says this strategy underlines TSMC top management’s solid grasp of IP value.

Marcus Woo, vice president and general counsel at HTC, suggested that cost considerations have driven the company to think harder, and earlier, about monetisation of patents. As the company transitioned from an OEM to a major branded device seller and patents became a bigger part of the expenditure, Woo says his team started to ask more questions about how patents are valued. “Looking back”, Woo said, “My suggestion is why not ask the patent monetisation question in the first place when filing?”

Watching costs is only one challenge as IP departments in Taiwan increasingly grapple with the next generation of technology. Here are a few other themes that emerged during the day:

  • Managing IP risk continues to be the chief responsibility of CIPOs in Taiwan. Woo noted that this job has changed as new players enter the IP market and convergence makes competitors out of previously unrelated companies. Speakers agreed that there is no one template for risk management, and approaches need to change continuously.
  • There was plenty of discussion of recent SEP cases that have seen courts set global rates, including Unwired Planet in the United Kingdom and TCL v Ericsson in the United States. Participants observed that the value of SEPs may be in the midst of a downward revision – will this affect other patent values as well?
  • The Asian consumer market of today is totally different from the one that existed when most of Taiwan’s legacy electronics companies got their start. As growth in this region shifts from being manufacturing led to being consumer led, there is a lot more attention to IP risk in jurisdictions like China and India.
  • There was a definite perception that the pendulum is shifting back toward rights holders in the United States, policy-wise. Meanwhile, close attention is being paid to the regulatory field in Asian jurisdictions. The lessons regulators here take from the recent US experience could be very important in shaping the patent environment.

 

Bing Zhao

Author | China editor

bzhao@GlobeBMG.com

Bing Zhao