Yixiong Zou, who is leading the launch of Sisvel's forthcoming office in Shenzhen, has been both observer and participant in the fast rise of Chinese corporate IP

Last week, Sisvel announced the appointment of Yixiong Zou to lead its business in China. He will be the first person to hold the title of Managing Director, China and he is currently spearheading the establishment of a permanent Sisvel office in Shenzhen.

Zou’s career spans roles in San Diego, Silicon Valley, Shenzhen and Shanghai. It was a role as patent counsel at Qualcomm that first brought him back to China as the company dealt with the settlement and aftermath of an antitrust investigation. He subsequently went on to hold senior in-house positions with a number of fast-growing Chinese technology firms.

In a conversation with Sisvel Insights, Zou discussed his career path in the US and China, the changing priorities of Chinese IP owners and the opportunities this creates for patent pools.

Yixiong Zou on stage at IPBC China in Shanghai last week

Sisvel has been doing business with Chinese companies for quite a while. Why is it important to take the next step and open a permanent office?

The Sisvel mission is to power innovation, and China is a place where you absolutely need to have a presence if you’re going to be a truly global player in R&D, technology and patents. More and more technologies and intellectual property will come out of China and we want to be right here supporting that. Although Sisvel has been in Hong Kong for twenty years, establishing a mainland presence will further strengthen our relationships with our Chinese partners.

Sisvel has had great long-term relationships with many of China’s most important technology companies. Having a footprint here full-time will let us get much closer to our existing clients while building partnerships with new firms. As we do this, we’ll undoubtedly discover new ways in which Sisvel can add value to these relationships.

What specifically about Sisvel attracted you to this role?

What I initially noticed from the outside was Sisvel’s adaptability, openness to novel solutions and a dealmaking mentality. I think these are critical competencies for doing business in China. You have to be able to work with partners and think outside the box to find creative solutions. Then once I got to meet the Sisvel team, I just felt it was a very collegial environment. The company is a great size – big enough to provide plenty of resources and support, but small enough that each individual has a real impact. I also think that Sisvel, being a European business, is uniquely positioned to build connections between China and the rest of the IP world.

In your view, what is Sisvel’s role in the Chinese IP ecosystem and how will it evolve in the near future?

Sisvel realises that China is central to both aspects of the innovation cycle – the creation of new technological solutions and their implementation – and the firm has a genuine interest in crafting licensing solutions that work for both licensors and licensees. To deliver on this, Sisvel wants to understand the dynamics in China even better so it can support the entire ecosystem and grow together with the IP units of Chinese players. I share this vision, and I think it says a lot that Sisvel wants to have a leader in China with experience across the entire spectrum of the innovation ecosystem.

You are relocating to Shenzhen for this role after spending the last couple of years in California. Tell us about your personal connection to China – where are you from?

All over. I was born in Sichuan and moved to Shanghai when I was five, but I spent most of my childhood in Beijing. Both of my parents were Tsinghua University graduates and we lived on campus for a while, so I spent lots of time growing up around scientists and technologists in Haidian District. I started my university studies at Shanghai Jiao Tong University before moving to the United States.

You began your career as a software engineer at Intel. What was your first exposure to the world of patents?

At Intel in the early 2000s we did a lot of programming using open source. The company had mandatory annual training covering IP concepts such as copyright and patents. After the fourth or fifth time sitting through the training, it started to pique my interest. This was back in the late 1990s, and there was a huge philosophical debate over copyleft licenses like the General Public License. At that time, Intel had a scheme to subsidise law school for patent engineers, so I jumped at the chance.

How did you get involved on the licensing side?

After law school, I joined a private practice firm and spent a couple of years doing patent prosecution work. I was still very involved with the open source and software community. I got the chance to move in-house when a position opened at Qualcomm for an attorney to analyse the implications of open source programmes. It was a great fit with my experience and it of course exposed me to a world-class licensing business.

The culture around innovation and IP at Qualcomm is amazing. I have never seen a company where engineers are so motivated to innovate. There is a huge emphasis internally on R&D, and the education and training provided around patents is phenomenal. I learned so much at Qualcomm. Working there, you gain a first-hand understanding of how the licensing business drives the development of cellular technology, generation after generation.

Your role in Qualcomm ultimately brought you back to China. Tell us about how that came about.

In 2013, China’s National Development and Reform Commission (NDRC) opened an investigation into Qualcomm’s licensing practices. This was one of the most significant antitrust cases in China, and I was involved with the company’s response. As everyone knows, the investigation ended in settlement in 2015.

With the antitrust investigation resolved, I relocated to Beijing as part of an initiative to enhance Qualcomm Technology Licensing’s local presence. We provided value-added services to our Chinese partners – for example, if Qualcomm products were involved in a patent dispute against one of our licensees, we would try to provide technical assistance. There were lots of other ways in which we interacted with local IP departments, but it was all about deepening the relationship beyond just a pure royalty exchange.

What were your impressions working with the IP teams in Chinese companies?

It was my first opportunity to see firsthand how Chinese companies work, and I was honestly blown away. I was very impressed with how quickly they were able to learn and to develop their internal IP capabilities. They just built on it day-by-day, diligently and persistently. Over time, this produced remarkable results. Ten years later, many of the same people I used to meet with during that time are now running the IP or legal departments of major Chinese companies. It has been a fantastic process to watch.

After Qualcomm, you were chief IP counsel for Midea. What were the most important licensing issues you dealt with there?

When I joined Midea, I thought a home appliance company would have little to do with standard essential patents, but I quickly learned that wasn't the case. Today, cellular or Wi-Fi technology can be integrated into almost any consumer or industrial product. Midea had an extensive product line organised across 10 business units, from residential air conditioning to refrigerators, washing machines and microwaves. Already by 2019, a significant portion of consumer products had Wi-Fi capabilities.

One of the biggest IP challenges we ran into was around supply agreements with OEM customers. There was often a demand for a blanket warranty of non-infringement for all SEPs. If you are familiar with the SEP space, you know it’s not practical to make that kind of warranty. These issues required a lot of discussion with business partners.

Tell us about what you’ve been doing in your most recent role with AESC, a new energy company. Has this work given you a new perspective on the SEP market and/or innovation in China?

AESC’s core business is battery manufacturing and I led their efforts to generate additional revenue via know-how transfer. It was a fascinating venture. I think the main similarity to licensing is that ultimately there needs to be a desire on both sides to enter into an agreement, and it should be a win-win partnership with elements of collaboration.

What I saw on the new energy side is that Chinese companies now possess the market-leading technology and know-how on the industrialisation side. When you scale something up, you encounter a completely different set of issues, ones that China is uniquely well-positioned to solve with its deep bench of expertise and extensive supply chain.

How much alignment is there between Chinese approaches to IP and pool licensing?

No doubt there has been significant change in the IP approach within Chinese companies over the past 6-7 years. Patenting is not some new thing – when I joined Midea in 2018, the company had already accumulated a portfolio of more than 100,000 patents worldwide. The most important shift has been in the mentality – from viewing patents as mainly a defensive weapon, toward a realisation that you can build a strategy around monetisation.

As that trend continues to materialise, it’s no surprise that patent pools are receiving a lot of attention. Pools are highly complementary to established patent owners’ bilateral licensing efforts, but they are also a great way for newer entrants to start creating licensing income in a public, visible way.

There is a long history of interest in pools, alliances and other aggregation-based patent strategies within China’s tech industry. Midea helped spearhead a patent pool and standardisation effort around pressure cookers more than 20 years ago with the aim of harmonising things like safety features. More recently, when I was at Midea we participated in drafting a joint Wi-Fi licensing strategy together with almost all the biggest appliance makers in China. One of the things we said in a white paper I helped draft was that patent pools would be a welcome way to bring more efficiency to licensing. So there is deep familiarity with the model and I believe good alignment with the aims of both Chinese patent owners and technology implementers.

Quickfire questions…

What’s a typical weekend activity for you?

Spending time with the family and catching up on reading.

What should someone with a free day in Shenzhen make sure they see?

Go to Huaqiangbei and be blown away by the sheer engineering capabilities a small shop may possess. In ten minutes, you can have the battery replaced in an old pair of AirPods so they are like new again, or add a new SSD to a MacBook Air to get more capacity. It destroys the warranty for sure, but it is fascinating to watch how they do this.

Where is your favourite holiday destination?

Anywhere with sunshine and ski slopes.

What’s the most memorable live performance you’ve witnessed?

A Muay Thai match between my 16-year-old son and an older guy in his club.

What’s your favourite TV series?

Cowboy Bebop. The original anime, not the Netflix one.

What’s the best piece of professional advice you’ve received?

Execution! Execution! Execution!