Blazing the IP trail in China —interview with Oliver Lutze, head of IPR at Bayer (China) Ltd.

2013/07/04,By Emily Tan, China IP,[Comprehensive Reports]

Bayer is a global enterprise with core competencies in the fields of health care, nutrition and high-tech materials. It produced many great inventions. Some of them are so successful that they are already household words, such as aspirin, others are its famous ground breaking materials, such as polyurethane and polycarbonate. The magnitude of these achievements is closely related to the company’s strategy of attaching great importance to R&D.

Today most of Bayer’s businesses are driven by innovative proprietary products. At present, 50% of its revenue can be linked to the results of the last 15 years of R&D. Bayer employs around 13,000 research scientists worldwide, over 7% of the revenue is invested in R&D annually. In fact, thousands of products invented by Bayer have benefited mankind and improved the quality of life around the world. At the same time these advancements have allowed the company to exert influence over the development of the global industry. The success of a company is inseparable to its employees. China IP interviewed Dr. Oliver Lutze, Head of Intellectual Property Rights at Bayer (China), to learn more about him and Bayer.

Interest as motivation

Dr. Oliver Lutze obtained a doctoral degree in chemistry from the University of Muenster, but he had already developed a deep fascination in patent work during his studies in Muenster. He volunteered to be the patent liaison between the university and a law firm employed in order to protect the university’s inventions.

After a postgraduate study in the US, he joined Bayer as a patent professional and started his career with a strong focus on science, as many other European patent professionals do. With an extraordinary interest in patents, he acquired the qualification of European and German Patent Attorney by studying in his spare time. He believes that the combination of science and law is a very rewarding profession which is always on the front line of innovation.

Setting sail

At his early career he was dedicated to supporting the lab scientists, i.e. supporting Bayer Crop Science’s herbicide research. Therefore he had to be as much a chemical expert in the herbicide science as the lab scientists to ensure that the patents filed were of high quality. In order to achieve this it was necessary to team-up with the scientists in order to determine which aspects of the research were based on existing science and which parts of their work were unique and contributed to patentable inventions.

If this collaboration works well, the concept of the invention can be broadened, for instance by suggesting further experiments. After a few years he felt that by working together with the herbicide team, including the relevant business managers as well as the scientists, the company could identify the best areas to innovate and file patents in that area. The group effort ensured the freedom to operate and also served to protect the company’s future in creating innovative products. It can also permit the company to obtain patents for cross-licensing with third-parties when the company encountered patent problems. For Dr. Oliver Lutze, having solid knowledge of both science and patent law and the ability to apply them in practice made work positive and pleasurable.

A good patent professional may be able to counter an argument of an opponent in a hearing before a patent office or court just by drawing arguments from his knowledge of other relevant documents. Dr. Lutze has been involved in cases in which he reversed an argument of the other party which appeared legally strong at first, but was defeated by his ability to explain its irrelevance based on his knowledge of science. Turning such cases around really makes his day.

As his IP experience accumulated in Bayer, he made a new step in his career by moving to China to lead the company’s local IPR function in the corporate legal department for all Bayer entities in China. In addition to the change of the cultural environment, as a new legal executive, he must accept that he can no longer be the expert in all details of scientific background to drive all individual cases and projects to success. Instead he has to do a lot more administrative work, e.g. budgeting and organization structuring, which is however very important to maintaining an effective and professional department within the company. The detailed case work is also replaced by broader tasks including giving general IP advice to management, leading projects and cases of completely different business units and most importantly managing people. For the IP related work he had to be a quick learner in order to understand all of Bayer's different businesses and China’s IP legal environment. With regard to managing people he told China IP journalist that he was quite lucky to have a great team of highly qualified and motivated colleagues in China so he can focus on sharing his experience with them and ensuring that they get the deserved recognition and career development support to maintain a targeted best-inclass function in the industry.

Dr. Lutze has also faced issues and challenges during his work. For example, oceans of time have been spent on a major project in M&A, difficulties in defending the company’s IP from invalidation attacks, challenges in preserving evidence for patent enforcement, or a pressing IP issue such as a blocking patent of a competitor in a major project.

However, Dr. Lutze believes that it is always rewarding to see all the efforts pay off when he and his colleague find a way to license-in a blocking patent or when he sees a new litigation strategy adapted to the current conditions in China turn out to be effective in achieving positive court decisions.

However, there is one thing that he is really concerned about. It is the recent discussions on the role of the patent system in society.

Patents are identified as a key factor for innovative companies to maintain an expensive research department which continuously comes up with new innovations. Bayer follows its slogan “Science for a better life” and spends roughly 3 billion Euros every year on R&D. These innovations can improve people’s lives in various ways, such as improving their health, providing safe and healthy food or achieving energy saving gains with high performance materials. He believes that new drugs or crop protection agents are only developed when there is a possibility of getting back the costly research and development investment. The 20 years of exclusive patent rights given to innovators are crucial in this aspect.

He always felt a sense of satisfaction when he was able to contribute to the flow of innovation by providing high value patents. It was the reason he choose this profession.

Now, countries like India seriously attack this very basic principle by having provided a compulsory license against Bayer for one of their new oncology drugs to a third party. The arguments of the decision in India in principle are not limited to the pharmaceutical industry. Questioning the basics of the patent law will mean that many new scientific projects may not be funded anymore.

However, Dr. Lutze is an optimistic person and he believes that the complexity of the patent system can be handled by the law makers and judiciary. The patent system can be effectively maintained to benefit innovative products in the future with the continuous development of the legal system. He is willing to contribute to resolve complexity and make recommendations to improve the system.

Besides the IP matters of Bayer, he also contributes a lot to constructing China’s IP environment. As Bayer has been continuously bringing innovations into the markets for almost 150 years, the IP protection and the related legal environment are quite important. For that reason, he considers it as a key task, as Bayer’s local IP head, to be involved in the discussion with Chinese government authorities such as SIPO and the State AIC. Meanwhile, his role as Chair of the IPR Working Group of the European Chamber of Commerce in Shanghai since 2011 also allows him to help other companies to be involved in shaping China’s IP environment.

Leading the way

Together with other colleagues Dr. Lutze took part in the establishment and building of the Bayer China IP office. At one point Bayer had to decide whether it needed to have a local IP team in China or not. Besides the consideration of the growing importance of Chinese business, thanks to the detailed convincing plans of the IP management function at the Bayer headquarters, the local IP team was finally founded. It proved to be a fruitful decision with China now being the third largest market for Bayer globally with a significant need for IP support.

But establishing an office was just the first step. He revealed that the size and scope of such an undertaking needs to be continuously checked for efficiency and the value creation. The company’s funds are limited and thus continued proof of performance is necessary. Patents and trademarks are important for Bayer as an innovation leader in all of its businesses. Local support and knowledge in one of the biggest market helps enormously, especially as they now have two global Bayer R&D centers in China as their internal clients.

Besides establishing an IP team, he has also participated in the formulation and practicing of the inventor remuneration plan. He told China IP that it was Bayer and other German companies who first thought about establishing an inventor remuneration plan for its local scientists in China as early as 2007. The system, based on a simplified model, intends to incentivize and reward inventors without major administrative burdens.

He follows with great interest the discussion on the draft regulation of the central government that further defines the legal requirements for inventor awards and remuneration.

Compared with quantity, he places more value on patent quality.

He emphasized that looking at the productivity of researchers to deliver patent applications in high quality, and not just quantity is also one of the key performance indicators in the research community of Bayer.

Always being prepared

Dr. Lutze believes that it is a must for IP professionals to continuously learn. One has to follow both the legal and scientific development to be a good advisor. He regularly reads articles from current magazines to keep up to date with what others are doing, which may inspire him from time to time. In order to understand clients and update his thinking, he actively participates in important information or decision making events. Moreover, he shares his experience in China. He thinks that IP professionals need another source of information. China does not have a long history of IP laws and corresponding jurisprudence.

Furthermore there are continuous changes in laws and regulations for improving the young system in line with China’s plans for development.

There are some “grey areas” in the law where the meaning is not clear; neither “white” nor “black.” Dr. Lutze frequently meets with peers to discuss these “grey areas” in the law, which he thinks is crucial to avoiding potential legal pitfalls. There are numerous opportunities to meet peers at conferences or association meetings, e.g. the European Chamber IPR Working Group meetings.

Although it is clear that disclosure of the confidential know---how of the company has to be avoided in such meetings, these informal talks are still helpful to get a broader picture by discussing on a general level.

When asked what personalities and professional capabilities an excellent IP manager should possess, Dr. Lutze stated, “The capital of an IPR function is its people. Bayer targets to have a first-in-class team to support our research and business in IP matters.

Therefore the manager should be a good leader, being able to motivate its patent and trademark professionals in the team. Those team members are highly qualified in science and law and involving all of them adequately and sharing experience with them is important. If the system and resources of an organization are well secured, to me it is a matter of good team spirit to be successful. Of course a solid science background is also a prerequisite. In an inventor company that is active in front-line science the IPR manager must be able to talk on one level with the R&D manager to advise effectively.”

He steps forward in his IP journey with great enthusiasm, responsibility and entrepreneurship. From patent attorney to IP manager, from Germany to China, from 1998 till now; he has experienced uncertainties and serious challenges but still enjoys every day. Finally, he keeps a careful attitude about his future, and as he said, “We will see.” So, let’s wait and see.

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Bayer, with great enthusiasm, responsibility and enterpreneurship,is a global enterprise with core competencies in the fields of health care, nutrition and high-tech materials

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