Leadership profile: Paul Lin
The Xiaomi IP strategy chief on building a department from the ground up at a growing corporate
When Ericsson sued Xiaomi in India over patents at the end of 2014 it was a stark wake-up call for the Chinese tech company – particularly with regard to its IP capabilities. However, anyone familiar with the agility of the business will be unsurprised to learn that its path out of the dilemma was characterised by bold decisiveness.
Xiaomi Technology – founded in 2011 and best known for handsets, Internet of Things devices, smart televisions and internet services – grew rapidly in its Chinese home market and in 2014 started to expand internationally. Recalling those days, Paul Lin, vice president of global business development and IP strategy insists that intellectual property was always going to be a challenge for a smartphone business. “That was pretty evident because of the Apple v Samsung and Motorola v Microsoft litigations,” he explains. “They looked at intellectual property very much from a strategic point of view, as one of the core business competencies of the company it needed to invest in.”
Yet despite this admirable outlook, the fact is that Xiaomi was a start-up and therefore had to concentrate its energies on product development. As a result, Lei Jun – co-founder and successful venture capitalist – decided to initially cover the business’s IP needs with external expertise, sinking funds in Zhigu, Lin’s IP advisory and investment start-up in 2021.
At first, this investor strategy worked, but when Ericsson sued in India, Xiaomi’s management realised that it needed its own in-house IP function and appointed Xiang Wang, the former head of Qualcomm Greater China. “He realised that building a team like we had done at Zhigu would take him three years,” says Lin. “As Xiaomi didn’t have that much time, they decided to buy Zhigu.”
It was an audacious move, bolstered by the fact that the three decided to position the IP team as a business unit rather than as part of the legal team. “That tells you something about the strategic importance we attach to intellectual property and how we approach it clearly from a business angle.” While this approach was similar to paths taken by Qualcomm, Ericsson and Nokia, it still made Xiaomi an exception to the widespread practice of tucking intellectual property away in the legal department, under the purview of a company’s general counsel. “My unit’s role is not solely to resolve IP disputes,” Lin points out. “We do that as well, but our core role is looking ahead: where do we want our IP position to be in five years’ time, maximising IP support for the business and minimising risks?”
Because of the importance that Xiaomi places on intellectual property, Lin is, in his own words, “very much plugged in into the core executive decision-making process”. However, he does not want to overstress the role of intellectual property: for Xiaomi, product is still king. “We define the roadmap for the product and then we decide on the kind of IP position we need to build in order to support that product,” he explains. “For me, intellectual property is a cost of doing business, it should never be an impediment to make a product. Saying ‘I don’t have the intellectual property so I don’t make the product’ may be true in other sectors, but in phones or other consumer electronics, if you have a product, there is normally a way to secure freedom to operate. You can license-in intellectual property, buy it or develop your own intellectual property in-house. As long as your business model can support the related IP costs, intellectual property shouldn’t be an issue.”
Xiaomi has made quite a name for itself with regard to the significant sums that it spends on licensing-in – this year it looks set to pass the $1 billion mark in royalties paid out. What is sometimes forgotten is that the company has also succeeded in rapidly building up its own IP portfolio, with the intention of obtaining freedom to operate and reducing its net royalty bill. “We have achieved all the goals we set in the five-year plan for the IP unit back in 2016,” Lin asserts. “Without our strategic IP plan, the company might have paid hundreds of millions, if not billions of dollars more in getting to the IP position where it is now.”
Many of Lin’s Zhigu people followed him to Xiaomi and are still there today – a significant achievement, given that in China it is normal for people in the sector to switch jobs every two to three years. “We are now a team of 30, including transactional legal support and support from the standards team. We are mainly engineers, licensing executives, business analysts and patent attorneys who are not specialised in litigation but in patent analysis. Given the size of Xiaomi and the importance it attaches to intellectual property, with only 30 people we are very efficient.”
The team is based in Beijing, although Lin himself lives in Seattle, Washington. He moved to the United States from China in 1992 and worked for Microsoft and Intellectual Ventures (IV) before founding Zhigu. “Before I joined IV in 2010, I knew nothing about intellectual property,” he laughs. “Zip, zero. At Microsoft, I had always worked in business development or marketing, doing business deals. At IV, Don Merino was my mentor. He basically gave me a crash course in patents, patent licensing and patent acquisition. He was a great teacher and we still have a strong friendship.”
When asked which personal experiences have influenced his leadership style, Lin highlights being a first-generation immigrant in the United States. But more important, in his eyes, is the experience of caring for his daughter. “I have a very personal relationship with my team members, I care a lot about them. That was very clear in our start-up days at Zhigu. Raising a start-up is like raising a baby; the experience of raising my daughter has influenced the way I dealt with people at Zhigu and it still does. That approach creates loyalty.”
This fidelity might also have to do with Lin’s easy-going attitude. “I am not very rigid, I don’t impose a military-style discipline on my people and I think they enjoy that,” he grants. There is also the fact that he is extremely goal driven and encourages his people to be the same, with a certain degree of autonomy about how to meet these targets. “Of course, we have processes in place, but for the purpose of better achieving our goals, not the other way around. I give my team members meaningful, challenging tasks and ownership of that task. They have a lot of latitude of how to get things done, they can leverage their own decision making. Once you hand that power to people, that will foster good team work, because team members will naturally reach out to somebody else if they need the other person to get their own job done. At the end of the day, my team of engineers and my team of patent attorneys have common goals to reach certain milestones together, for example on negotiation processes, and these common goals also drive them to work together.”
What also improves motivation, according to Lin, is that team members recognise the business value behind their sometimes very technical work. “My people see the deals they prepare not just through their own technical lens but through the lens of the financial or business value they bring to Xiaomi: ‘If I fight for this term, what does that bring to the company?’ When you start to think about it in that way, it makes your work much more meaningful and motivating.”
Lin does not consider himself a perfect leader, but he is always trying to be a better one. “I have made many mistakes myself. I am a very opinionated person. I used to power through my ideas at team meetings, without giving team members sufficient space to express their point of view. Not listening to what people have to say or even shouting them down is something that can easily demotivate people. I have learned from those mistakes I made.”
Xiaomi is known for various creative deals with – among others – Microsoft and Nokia. In these agreements, IP issues (eg, the right to use the technology covered by patents) are combined with other business aspects, which are normally dealt with separately. “We do this because in our relationship with other companies – especially product companies – we tend to look beyond the IP aspects of the business relations,” Lin reveals. “When I sit down with my counterparts, the first thing I tell them is: ‘We are here trying to do a business deal, we are not here trying to resolve one legal dispute. If that is the only thing you are interested in, you should talk to Xiaomi’s legal team, not to my team. I can tell you what my business needs are, you tell me yours and then let’s see if there is overlap.” Within that context, the licence becomes a natural part of a wider exchange. “If you have a conversation about value exchange, the whole dynamic of the discussion changes”, Lin points out. “It becomes much more positive and constructive. The traditional licence negotiation is very confrontational, with a lot of negativity.”
For this reason, Lin is a big fan of value exchange and combo-deals. “It doesn’t always work that way, of course”, he concedes. “Sometimes the other party is only interested in squeezing as much money out of you as possible. In those scenarios we defend ourselves in a pretty firm way. But even when there is no overlap and no room for a combo deal, with many companies – Qualcomm, Nokia, Ericsson, to name a few – we have very good relationships. Not just because we are one of their biggest licensing customers, but also because, through the deal process, we have built up trust, friendship and mutual respect.”
What subject(s) did you study as part of your academic
If you could acquire in one day all the knowledge of any degree of your choice in order to become even better at your job and be a better leader, which degree would youchoose?
I think it would be engineering. I love technology. I have done a course in computer systems, but not computer science. I pick up knowledge about technology by reading about it a lot and because I work for a technology company, but I would still like to get more hands-on engineering knowledge. I would like to get deeper into it. I don’t know if I’m smart enough to study engineering, but I would love to!