IPR Strategy for the Transformation of OEMs - from the Perspective of the Implementation of IPR Standards

        As a manufacturing country, China has the most powerful industrial processing capacity in the world, with many OEMs exporting endless high-quality products to the world day and night. Meanwhile, they have earned back a lot of foreign exchange and made great contributions to the rise of China's economy. However, with the gradual disappearance of demographic dividend, the financial bubble and the transformation of the international situation, unfortunately most of the foundry factories have fallen from their past glory. In the face of the question of survival or death, they have to embark on the difficult road of transformation, but find that the mountains of intellectual property are spanning across their way in every direction, causing unspeakable anguish.

        By studying the Enterprise Intellectual Property Management Standard (hereinafter referred to as "the Standard"), the OEM may find the appropriate intellectual property strategy for the period of transformation.

        Any enterprise's intellectual property strategy should be based on its intellectual property policies, and the introduction of the Standard mentions that to continuously implement the intellectual property management system, the output results should include "improving position of market competitiveness" and "improving the core competitiveness of the enterprise". Therefore, the intellectual property policy of an enterprise should serve the competitiveness strategy of the enterprise, and the correct competition strategy should first accurately locate the competitors. For OEMs, the exact competitors are not the other OEMs in the industry, but the consignor of the OEM orders and its similar enterprises, as in the OEM stage, the consignor has the largest say in whether the OEM can obtain the order. After entering the ODM and OBM stage, the original OEM mainly encroaches on the market of the original consignor.

        After identifying the competitors, the first thing for an OEM to do is to study the competitors: if an enterprise dares to separate the production of core products, it is bound to master the core technology of the product in most cases. Taking it on as an opponent without long and careful preparation will inevitably lead to bombs of intellectual property rights, or even an attack of dimensionality reduction. Therefore, the OEM can't rest easy on the contract and profit after receiving the order, but should "establish information collection channels, timely obtain the intellectual property information of the field and competitors" (clause 6.4a) and "classify, screen, analyze and process the information, and make effective use of it". (clause 6.4b). The OEM needs to analyze the layout of intellectual property rights of competitors. Due to the continuous refinement of modern production division, almost no enterprise can monopolize all fields involved in a product's R&D, production and sales. Moreover, the larger and more mature enterprises are, the more consistent their layout of intellectual property rights is, the clearer the pattern. This leaves operational space for the early failure of the OEM - to try to avoid confrontation in the opponent's advantageous intellectual property arena, to select its neglected or weak points, file for and plan intellectual property rights in time, and establish its own intellectual property advantages. For example, Foxconn's success can be understood to a certain extent as the result of grasping the "weakness" of technology enterprises that they do not directly engage in production, and makes intensive efforts in production technology, quality control, etc.

       Of course, after determining the ice-breaking direction, it should in the R&D stage "timely evaluate and confirm the research and development results, clarify the protection mode and ownership of rights and interests, and timely form intellectual property rights" (article 8.2e). In the production stage, "timely evaluate and confirm the technical improvement and innovation of products and process methods involved in the production process, define the protection mode, and timely form intellectual property rights" (clause 8.4a). Later, it is even more necessary to "conduct follow-up investigations in time when the market environment changes, adjust the intellectual property protection and risk avoidance scheme, and form new intellectual property rights in time" (article 8.5d).

        In the OEM stage, the OEM needs a variety of intellectual property rights' combined layout to form its own brand, and to have a greater voice in the OEM contract negotiation and the possible upgrading stage in the future. In order to avoid Party A's rebound in the process of building its own brand, in addition to having excellent negotiation skills and properly combining with other manufacturers, the OEM still needs to strengthen the intellectual property management in the contract, "review the relevant intellectual property clauses in the contract" (clause 7.5A), especially clarifying in the contract that "the ownership of intellectual property and the scope of licensed use shall be clearly defined in the production contract" (clause 8.4b), which includes the intellectual property clauses related to the future upgrading of the OEM enterprise, cleverly included in the contract. For the core clauses, the bottom line should be adhered to.

    The Enterprise Intellectual Property Management Standard (GB/T29490-2013) provides an intellectual property management model based on the process method for enterprises, which is helpful for the systematic and standardized management of intellectual property. If the OEM can read the specification carefully and use its principles to implement the appropriate intellectual property strategy, it can get through the close siege as soon as possible and obtain new life.