Lenovo: the complex world of computing IP

The Lenovo we know today might be a relatively young company, but that doesn’t stop it mixing with the big players.

Lenovo was formed when China-based Legend Holdings changed its name to Lenovo in 2004 and, one year later, purchased IBM’s PC business.

The new company was in the fortunate position of inheriting patents and patent licences with some of the world’s major computer companies.

“That was great for Lenovo because it gave us a strong head-start in terms of having a larger number of patent licences already in place, rather than having to go out and negotiate them from scratch,” Ira Blumberg, vice president of litigation and IP for Lenovo, tells WIPR.

When it comes to acquiring and filing patents, there are two extremes, according to Blumberg.

At one end are pharmaceutical companies which, when a drug is developed, can have several relevant patents for that particular pharmaceutical, says Blumberg, and typically those patents are owned by the company that developed the drug and there are no others to worry about.

Blumberg points out that at the other end of the spectrum, mobile phones and PCs can potentially have thousands of relevant patents for one product.

Previously, while working at Intel, Blumberg learned that Intel commissioned a law firm to gather information on US patents in force that may impact a ‘complicated’ product such as a microprocessor. The results showed that there were in excess of 100,000 relevant patents.

Not only were there thousands of relevant patents, but they were owned by numerous different entities ranging from big computer companies to smaller businesses, startups and educational establishments such as universities.

What is Lenovo’s strategy for navigating its way through a minefield of potential patent litigation issues when developing a product?

Rather than undertaking the time-consuming task of investigating potentially conflicting patents, Lenovo looks at the patent landscape and observes which companies may challenge a Lenovo product with a patent, says Blumberg.

Some Lenovo products are updated every 12 to 18 months, he says. Depending on what the update is, it may not be time-efficient to conduct a patent search if the update won’t even last two years.

“When you’re going to put a new product to the market you do some investigation, such as how different is this product from its predecessor?” Blumberg explains.

“If it’s the same product with a new coat of paint, you probably don’t do any patent research because if you didn’t get any patent challenges in the old product and there’s not much new, it’s not worth worrying about.”

Lenovo’s competitors include Apple, Dell and Samsung, but the big names are not the only ones that pose a potential patent threat to the computing company’s products.

Smaller entities can also own relevant patents in the world of technology that could spell litigation trouble. Instead of just focusing on the big competitors, “we also look beyond that because high-tech patents have broad application”, Blumberg tells WIPR.

For example, a patent for a microprocessor can also apply to PCs, mobile phones, tablets, printers and televisions.

“All those devices contain microprocessors. If you’re going to have a really effective strategy, you can’t limit your defensive analysis to just your direct competitors. You have to have a broader vision and say ‘which other companies in adjacent spaces may have patents of interest, and how do we deal with those companies?’,” he says.

The skeleton of the Lenovo patent strategy is to understand which products companies such as Dell and Apple may want to challenge then make sure Lenovo has an adequate patent portfolio to deter competitors from mounting challenges.

“Generally, economically rational companies will not start a patent fight they cannot win,” Blumberg says. “Thus, having an adequate supply of patents that cover products from other companies is key to ensuring that those other companies will not become aggressive with their patents.”

Shopping around

When it comes to filing its own patents or
acquiring them from sellers, Lenovo adopts a mixed strategy.

For example, Blumberg says, Lenovo doesn’t have a printer business and therefore does not have many engineers developing innovations in that sector, so the company will look around at other developers working in the area.

“In places where we don’t have the expertise, we will go shopping. We have spent a fair amount of money buying patents over the years and we continue to have a programme that looks at opportunities,” he says.

Lenovo has been busy acquiring patents relating to mobile phones. As part of its 2014 acquisition of Motorola Mobility from Google, it received 2,000 patent assets. This was followed by the acquisition of 21 patent families from Unwired Planet relating to 3G and LTE technologies for mobile phones, a deal that was worth $100 million.

“These patents have served Lenovo well in patent licensing negotiations with several mobile phone competitors.”

While patent acquisition is an important part of its strategy, it is also vital that Lenovo encourages internal development.

“Engineers like recognition, and patenting is one of the ways that engineers receive that recognition. Any high-tech company needs a strong patent programme to ensure the engineers feel valued and recognised, not just by the company, but by the world at large.”

Patent licensing

In addition to filing its own patents and purchasing patents from third parties, Lenovo also engages in patent licensing. In simple terms, a patent licence is permission from the owner of the patent that allows the licensee to make and sell products that include the patented invention.

“Because of the large number of patents covering mobile phones and computers, Lenovo is engaged in patent licensing discussions with dozens of patent owners at any given time. One of the greatest challenges in these discussions is negotiating reasonable terms and pricing,” Blumberg says.