Here is something that you will not see often in your lifetime as an Intellectual Property professional: a Chief IP Counsel of a large Multinational Company talking about how they handle their patent portfolio.
The interview can be listened to on Rolf Claessen’s blog “IP Fridays” (click here) and I have prepared a transcript of the interview that you can download here: Beat Weibel and Rolf Claessen Interview 031122.
Know The Siemens Patent Administration
You need to know more what we are talking about here. The Siemens company is one of the largest patent filers in the world. The European Patent Office (EPO) shows Siemens as the 5th largest filer in 2021:
This figure does never become public because you don’t know which entity of the Siemens group is actually doing the first filing: a good guess is that Siemens currently files about 2,500 to 3,000 new patent applications per year. And currently, Siemens has probably about 25,000 – 30,000 live patent families, each one probably in about 3 – 4 countries on average. That makes about 100,000 single Siemens patents. Maybe more. Or maybe less. But not much more or less.
This is one side of the medal. You can only achieve that with a qualified team that does that heavylifting. My good guess is that Siemens currently has a patent administration of about 350 people, of which 250 or so are so-called “patent professionals” with at least a master’s degree in science or engineering and the remainder being so-called “paralegals” with other degrees, if at all. It is not common in Germany for people with a university degree to work as support staff for a patent professional, but that is currently changing. These 350 people in the patent administration work for a large number of so-called “business units” in the Siemens group that do the day-to-day work for the Siemens customers, and each business unit has at least one so-called “IP manager” for liaising with the patent administration. IP managers usually hold at least a master’s degree in science or engineering but they do not (yet) have complete training as patent professionals: the job of an IP manager in Siemens is often a stepstone to becoming a patent professional in the patent administration body. The Siemens patent administration has about 15 – 20 antennas world-wide.
The Siemens group of companies employs about 300,000 people, and the Siemens annual revenue is comparable to the GDP of an entire country(!), such as Luxemburg or Bulgaria. The Siemens company is 175 years old, and it surely is one of Germany’s crown jewels. Having worked for Siemens is like a badge of honor in an engineer’s CV.
I was never formally a part of the Siemens patent administration but I have a long-standing business relationship with that great company: I started working as a very young freelance patent attorney for the Siemens patent administration, and I have been learning a lot about patent prosecution, and patent litigation while doing so. One of my most spectacular patent prosecution cases started in Siemens, check out the following article if you want to know more: https://ip-lawyer-tools.com/no-contradiction-between-comvik-and-t1227-05-infineon/
Now you know more about the Siemens patent administration structure than most people in this world. If you are managing the patents of a large company then you can compare where you are yourself. How much effort do you spend on patents, as compared with the Siemens group of companies?
Know Beat Waibel
Beat Weibel is a Swiss and he is the Chief IP Counsel of Siemens. Beat has been working for 30 years in the IP industry. He is a Group Senior Vice President of Siemens, which is probably best compared with the rank of a brigade general if you are familiar with army ranks and structures. It is an unspoken but fixed rule that IP experts can never get into the managing executive board of directors (= “Vorstand”) of publicly listed companies, but Beat comes as close as it gets to that rank.
Beat is a qualified patent attorney in several jurisdictions, and he has a master’s degree in electrical engineering. Beat was with the famous Swiss ABB company for almost 20 years before he joined the Siemens company, 9 years ago.
Beat currently also serves as a president of the VPP (Association of Intellectual Property Experts) and as a president of the FEMIPI (European Association of Patent Attorneys in Industry), and he has 30 years of high-tech industry experience in Intellectual Property under his belt.
In very short words: Beat is a 800 pounds gorilla in the Intellectual Property room. When he speaks then the crumbs better become silent.
Know Rolf Claessen
My friend Rolf Claessen is a famous German and European patent attorney. Check out his Wikipeadia page https://de.wikipedia.org/wiki/Rolf_Claessen, this link replaces many words.
Rolf has a personal website, here https://rolfclaessen.com/ with a lot of resources, please check it out!
In very short words: Rolf is another 800 pounds gorilla in the Intellectual Property room.
Now let’s see what these two 800 pounds IP gorillas do in that Intellectual Property podcast:
Dr. Rolf Claessen: … In our last interview, we already had briefly talked about patent quality, and that seems to be a hot topic of yours. Why do you think this is increasingly important in today’s patent world?
Beat Weibel: Yeah, I think there are two main reasons. First of all, we’re living in a digital world, in a more and more digital world with a lot of ecosystems, platform systems, etc. And as I probably mentioned last time already, IP rights are important to document and protect its intellectual contribution to this ecosystem. And actually I feel that intellectual property rights are the only measure we have to protect and document one’s intellectual achievement and intellectual contribution to such an ecosystem. So therefore, we also see ever raising numbers of patent applications. The unitary patent is ahead of us and therefore I think we need to focus even more on quality than quantity because. These IP rights, and in particular patents, give us exclusive rights, and as we now know, this empowers us to to be faster, quicker, better, etc. And as a result, we exert influence on our competitors and on competition. And for that reason, for me, it’s clear that we have to focus on quality. And the second reason is maybe kind of professional pride and obligation that we contribute with high quality things and that we also in the patenting processes we try to foster for the best quality possible.
I agree with Beat. Quality is a big issue when it comes to patents. And Beat makes it clear that for him, quality is above everything, because of professional pride and obligation. Remember that Beat is a Swiss. This attitude of excellence is also part of the Siemens culture, and that is probably also the reason why Swiss and German products have the best reputation in the world. Beat’s statements resonate with me, because of my personal background from the German culture area.
But having worked and lived in Asia for the past 20 years, that experience has turned me much more pragmatic. And this is why the price and the delivery time of a patent are just as important for me as the quality of a patent. “Good” in an Asian context always means “good enough”. But that is not so in the mind of a genuine German or a Swiss engineer. Which I also am.
Please keep this area of internal conflict in mind for the rest of the interview.
How Siemens Measures Quality of its Patent Portfolio
Dr. Rolf Claessen: Yes. And that leads to my next question. If we talk about patent quality, we have to talk about how to measure patent quality. Do you have a way to measure patent quality? And yes, if you measure a patent quality, do your measurements match your outcomes when you enforce patents? Of course, I know that typically only maybe a 10th of patents or even less are really enforced. But you have a big data set. I would say you file a lot of patents and you enforce also patents. Do you see that there is a correlation?
Beat Weibel: To the first part of your question “What tool do we use?”. I don’t want to make advertising here, but I think the tool and the database is so well-known that it doesn’t really matter whether I also mention it. We use PatentSight in many, many years to measure the quality of our portfolio and in particular the development of the quality of our portfolio, which is, in my view, a very important feature of PatentSight. And there I have to say, we see a quite good match. We feel that this independent measurements goes exactly in the right in the right direction. And we indeed do see that for individual patents, it becomes, I have to confess and say it becomes much more trickier. So not always the the best or the highest ranked patents are the ones that we can enforce. Because honestly, the question if you enforce the patent is not … or the freedom you have if you enforce a patent, is not that you can just pick the best one. You have to pick the one that is infringed, and that’s sometimes not really the best one. And therefore, for individual patents, I have to say the match is probably less good as than it is for the portfolio.
This interview takes a very unexpected turn right at the beginning. Beat is super-honest with his insights: the number of patents in the Siemens portfolio is so overwhelmingly big that only “big data” A.I. software tools can be used to evaluate its quality. And he is aware that when zooming into the patent portfolio, the positive measurement of the entire portfolio may not be reflected in individual patents of that portfolio.
Such a statement is acceptable for a huge patent portfolio of existing patents that have earlier been generated without having “the end” in mind. But that not only requires deep pockets in every aspect of the patent prosecution, it comes with a tremendous frontload of information that has to be dealt with. Many large patent portfolios in this world are not even organized in such a way that A.I. software tools could evaluate them. You can onboard 20,000 or maybe even 40,000 existing patents into a database system per year, but not 100,000 patents per year.
How Siemens Measures The Quality Of Individual Patents
Beat’s above statement seems to have stimulated Rolf, as you can see in his next question.
Dr. Rolf Claessen: One question I have in this context, you just mentioned that PatentSight is very good for measuring the patent quality of a portfolio. Do you have some additional KPIs or some additional measurement factors when it comes to individual patents? What do you look at? What kind of features or what kind of measurement quality indicators, let’s say, do you use when you look at individual patents or do you do that?
Beat Weibel: Yes, we do that. We do that on a regular basis. We do that in the first instance, so to speak, when we talk about the invention, whether it should go for patent application or not. But we do it in a second step also, when we talk about filing subsequent filings after the priority application, and we do it in a third step – yes even in a third step – when we talk about maintenance of the portfolio, meaning the management of the portfolio, where we sort out unused patents, patents that have not such a high value, etc., and then we use a number of KPIs. It’s quite a long list actually, but I would like to point out two KPIs that are very important for your questions, which is enforceability. That means also the legal validity of a patent applications, the scope of the protections, the broader the scope of protection of courses of the claims, the better it is, is enforceable. And also detectability whether it covers something that you can prove in a litigation or whether it’s a completely hidden feature that you cannot prove in in litigation. So that would score less well if you have such hidden features. So these two additional elements are taken into consideration in our IP management system.
Understood. Siemens regularly checks the quality of its patent application and patents. This is the core message that I take out from this epic interview.
Now translate that into a workload per person, per year. It is very clear to me that the 250 Siemens patent professionals cannot possibly do that job alone. Reason #1 is that there are 25,000 patent families in the Siemens patent portfolio. That means that each one of the 250 Siemens patent professionals would have to evaluate 2 patent families per week, on average. Which is a lot of work, believe me.
Reason #2 is that the 250 patent professionals probably do not have access to the full range of information that is needed to do this job. There is product-related data, such as sales figures, linked with each patent that only the individual business units would have. Then there would be a technical roadmap for the business unit, and probably also a marketing plan, that have to be taken into account.
This means that the less qualified IP managers have to come in, and maybe they get support from product managers and so-called “Kaufleute” (“economists”) in their business units.
Now we are talking about a committee of people. And please note that “killing” an existing invention disclosure, patent application, or patent is not something that is to be taken lightly. Especially not when you are a part of a large organization. Would you easily de-qualify a patent if you have doubts? I would not.
Let that sink in before you continue reading. My take is that this model cannot easily be applied in a much smaller environment.
The “Industry Patent Quality Charter” Initiative
A large part of the remainder of the interview is about an initiative “Industry Patent Quality Charter” that Beat and some of his industry peers have recently started.
Beat explains this “Industry Patent Quality Charter” initiative in contrast to an ongoing initiative of the European Patent Office, which looks into improving the prosecution of European Patents. I know about that EPO initiative because I am a part of it, representing SE-Asia in the so-called SACEPO Working Party on Quality (WP/Q) committee (click here). And of course am I interested in Beat’s initiative because “patent quality” is the one of the three parameters which directly influences the other two parameter “price” and “delivery time”. It goes without saying that all three parameters together determine the perceived value of a patent for any given client.
For the sake of brevity I am in the following picking out a few of Beat’s statements that refer to quality and management of the Siemens patent portfolio, and leave those statements away that deal with the “Industry Patent Quality Charter” and EPO’s SACEPO quality initiative.
Beat Weibel: Yeah, that’s I’m happy to do so. And actually it was created, so to speak, in one of these sessions where that we had about the Patent Modernization Act in Germany, where it was about the proportionality of the injunctive relief. And I do remember there was a kind of a parallel discussion in public and in the in the papers about patent quality. And in one of these meetings we had about the injunctive relief. The focus also shifted on patent quantity. And there was this saying again that 80% of the patents are trash because 80% of the patents litigated before the German patent court are amended or nullified. And I said, come on, I cannot believe that. I think we discussed that also in the last podcast because first of all, the set is too narrow because only very few patents are litigated in front of the German patent court. Therefore, you cannot draw any conclusions to the entire population of patents.
I fully agree with Beat. In fact, there is no “trash patent”, unless it is a case of professional liability. When someone looks at a specific patent and tries to judge its quality, the original motives for filing this specific patent have to be taken into account. I have identified at least 17 different motives for filing a patent application, and only 3 of them require a so-called “litigation grade patent” (click here). And I have identified 5 different tactics for drafting and prosecuting patent applications that come with different costs and timelines (click here). None of these tactics would result in a “trash patent”.
Another aspect comes in here, which is a peculiarity of most patent attorneys. I heard this recently from a US patent attorney: “Most patent attorneys think of themselves as artisans, and of other patent attorneys as morons”. What this means here is that it is so easy to conclude from reading a so-called “economy class patent” that its author has no clue about what is a “litigation-grade patent”. But this is in fact not true. The applicant decided to invest a certain budget for drafting and prosecuting a patent application, and with this decision came a certain quality expectation. Example: why provide a litigation-grade patent if all that is required is an official public document that can be used as evidence in a conflict: who invented what at what time? That can be important if two parties work on the same project, at the same time.
What The Patent Offices Want Is Not Always What The Patent Filers Want
And by the way, I mentioned I remember that very well. I feel we as industry have a self-obligation to strive for quality because we are profitable companies, we have our stakeholders, we have our shareholders and we have to deliver, etc. Therefore, we don’t have any incentive whatsoever to go for trash patents and we have no incentive to misuse the system, etc. And then I mentioned that just in one of these discussions and amazingly enough, everybody, independent whether he or she was for the proportionality of the injunctive relief or against it, agreed. And I said, okay, looks like we have an issue here. And that was kind of the starting point.
And what I feel I have been repeating this topic that we from industry point need to rely on valid, good, valuable, enforceable, licensable, otherwise usable patents. This is not really heard by the European Patent Office and therefore I thought now we need to act ourselves and create an initiative that we call the Industry Patent Quality Charter to convince the European Patent Office what we think about patent quality and that we think differently, that we completely think differently. We don’t think in terms of internal process optimization and efficiency, but we talk about content of the patents.
The above is another brilliant passage in this interview because it contrasts the interest of a patent office with the interests of the users of the patent office.
Patent offices often seem to forget that there is this divide between opposing interests. In my opinion, EPO is the most predictable patent office in the world, and EPO is visibly striving to improve its efficiency. Of course would EPO require the cooperation with its users in order to improve. But sometimes, these requirements go against the interests of EPO’s users. Example: the introduction of the concept of “intermediate generalization” or of the “adaptation requirement“.
In other words: we patent filers have an understanding of the term “patent quality” that is different from the understanding of the term “patent quality” by patent offices.
Beat confirms this as he continues:
If you read the EPO quality Charter, then I personally feel it’s very general. It’s not kind of binding, has no specific means. To be very frank, I think you could exchange your organization name, name, and then you could use it for any other organization. So it’s very general. And at max, I would expect from the IPO quality charter that it continues to take this formalistic approach that I mentioned earlier where margins of the documents are checked, where the list of designations has to be correct, where timeliness and efficiency of the process are in the focus. And that’s all important, I would say, to have a possibility to get rid of the backlog, to have smooth processes, etc. But that’s not in my view or in our view, I have to say it’s not patent quality as we understand it. It’s process quality, examination, process efficiency, but not patent quality, which is much more content driven. So I have to say, and I know I am criticizing here the European Patent Office. I got the feeling that a lot of the measures that were issued in the last years had the main purpose of internal optimization of their processes and not considering what we as users, we as financers of the systems, because the European Patent Office is 100% user and fee financed. What we expect and what we need from the European Patent Office, because as I mentioned earlier, the for the reasons that I described, we need valuable, enforceable, licensable, valid patents. And so therefore we are really talking two different things. And one goal of the initiative of the charter is to bring us to gather the charter members and the EPO on one table where we can discuss that and together bring it forward so that we improve the quality.
Quod errat demonstrandum (Q.E.D.).
What Industry Patent Filers Want
But what are now the “Industry Patent Quality Charter” members’ quality criteria?
I think you have to distinguish on what we can do from our side, and we try to write that down in our charter as a self-obligation. So for example, that we focus for the patent applications on the really important inventions that are necessary for creating innovations for the companies that we represent. And that create a sustained value to how to improve our companies and our customers products and services. So that’s maybe at the beginning. But then we also, as patent professionals should pay attention that we draft the patent applications clearly with a well-defined scope of protection, we should avoid misleading and inconsistent wording so that we have a good basis document that can be examined, searched and examined by the European Patent Office or by any patent office in general. And what is also important at the off the ground, so to speak, in the coming to the examination process in a minute. What is important after Grant is that you have a kind of portfolio management process where you sort out unused patents on valuable patents, patents that don’t serve your needs anymore. That is also important to keep the portfolio slim and to keep the number of patents slim so that we can do from our end. And in that respect, we have created this charter where the company is in as a kind of self-obligation, subscribed to do so.
That sounds good, and I believe that this is a no-brainer. But I would like to add that the above requirements do not apply to all types of patent applications. There is this type of patent application where a grant of a patent is never intended. Only formal minimum requirements need to be fulfilled. You may now ask me: “who the heck needs a patent application that is never granted?” The answer is simple: why do you care? The simple fact that there are clients that do not need more than a filing receipt for their patent application justifies the existence of this type of patent application. If you are really interested what motives drive patent filers, please watch my short screencast video here: https://ip-lawyer-tools.com/lesson/motives-for-filing-a-patent-application/
The same applies to patent applications that contain more than one invention. Why would we care? As long as the patent at the time of grant does fulfill the unity requirements, all is in good order. And do you know that after grant of a patent, there is no unity requirement anymore? A partly revoked granted patent is explicitly allowed to have claims that lack unity.
But then again, I would not expect the large Siemens patent administration to enter in public into such a detailed and diverse view of the term “patent quality”. With 2,500 new patent applications each year one would like to have a simplified and straight-forward handling of all upcoming inventions, but with the freedom to still file and prosecute patent applications that become patents that are not litigation-grade. You will find such patents in the Siemens patent portfolio, as Beat mentioned at the beginning of the interview. As you now will understand, this is not a bug, it is a feature.
Better Patent Searches Needed
Beat finishes the interview with a very specific requirement for the patent offices:
On the patent office side. First of all, I think it’s necessary that we get complete searches. Searching the complete set of claims because based on these search reports, we take a decision where to file further, to file in different countries to a PCT application, whatever is foreseen. And if we don’t get complete searches because the search is stopped because of a formalistic argument, for example, or a technicality argument, then it’s useless, so to speak. And the same is true for the examination. That means the examination or novelty and inventive step. We always need complete examinations of all claims because otherwise we don’t know where we stand. We cannot steer our investment. And in order to do so, we feel that the examiners should be incentivised in a way to exactly deliver such searches and examination reports, and they should not be incentivised to deliver them in time and efficiency. That’s also necessary, but that shouldn’t be the focus in order to improve quality. And then I think we should also or patent office should also strive as far as possible that there are consistent approaches and consistent judgments on all levels, meaning from the examination division to the opposition division, if you have no position to the Board of Appeal because otherwise legal security, predictability of the of the processes is just not possible. And so in a nutshell, it’s important that the Patent Office focuses on. Content as well as we try and not on formalistic aspects of the patenting processes and that we get away from celebrating even more patent applications, more patent applications, we should focus on quality instead of quantity. In a nutshell.
I understand Beat’s above request for prior art searches that are completed even if there are formal errors in a patent application, because the results of the patent offices’ search report is part of Siemens’ internal quality assurance process: please compare with Beat’s earlier statements above. Again, a complete search result is often not required by other companies that have different internal processes. But it is a fact that a bad or incomplete search report can later fire back on a patent owner because that can lead to a patent that is inherently invalid. Which also explains why “80% of the patents litigated before the German patent court are amended or nullified”, as Beat mentioned earlier in this interview.
People who conclude from the fact that a large number of litigated patents are later amended or entirely revoked that those patents are of bad quality do not know what they are talking about. They are wrong, and by ventilating such a wrong opinion they demonstrate that they have simplified a complex system to a linear model that is no longer accurate.
Again, the present interview is a highlight of the current changes that the patent systems go through.
Not only do Beat and Rolf emphasize that “patent quality” can have different meanings, depending on the context.
Beat also lets us peek behind the curtains of the Siemens patent administration, which is an insightful experience. If you want to build up your own patent administration, is this where and how you want to go?
Martin “Patent Quality” Schweiger