YOU ARE HERE: LAT HomeCollections

Microsoft exec safeguards valuable trove of patents

September 06, 2012|By Janet I. Tu
  • Horacio Gutierrez, shown above in May, is Microsoft's deputy counsel of intellectual property and licensing, is known within the company as much for his legal acumen as his good humor.
Horacio Gutierrez, shown above in May, is Microsoft's deputy counsel… (Dean Rutz, MCT )

SEATTLE — Darth Vader is supposed to be menacing. But when Horacio Gutierrez, Microsoft's deputy counsel of intellectual property and licensing, dressed up as the ominous Star Wars Sith Lord one Halloween? Not so much.

"I've never seen a happier Darth Vader," said Gutierrez's boss, Microsoft general counsel Brad Smith.

In some ways that image captures perceptions of Microsoft in the patent battles now raging among tech companies — and Gutierrez's role in them.

Microsoft has signed a number of licensing agreements with — or filed lawsuits against — companies it says infringe on its patents, most notably manufacturers of devices using Google's Android operating system.

To some, Microsoft is a menace that wields its power to extract sizable royalty payments on Android devices even as its own Windows mobile devices flounder. In that view, Microsoft uses patents as a cash cow rather than a way to protect inventions.

To others, Microsoft leads the way in how intellectual-property disputes should be settled, with a preference for licensing over litigation and an eye toward fair settlements — while protecting its vast investment in research and development over the years.

Gutierrez, too, embodies those dual perceptions.

In his role heading the company's patent, trademark and copyright work, the 47-year-old attorney is in a position to stare down some of the largest technology companies in the world. The work he and his team produces makes headlines, from broad agreements with Samsung to battles with Motorola in courtrooms worldwide. The consequences can be sweeping, from billion-dollar deals to import bans on products.

But within Microsoft, Gutierrez is known as much for his good humor as for his legal acumen.

The patent arena is "filled with conflict, disagreements and complicated technologies. A little humor goes a long way," said David Kaefer, general manager of intellectual-property licensing, who works for Gutierrez.

The kind of role Gutierrez plays is becoming increasingly visible as high-profile tech companies wage patent battles in courts worldwide over products used daily by millions of people.

At Microsoft, Gutierrez leads the team devising strategies on which patents to acquire, what to do with the ones it has, and how to protect its new technologies.

He also leads some of the negotiations for licensing deals himself — including a major 2011 deal with Samsung.

Gutierrez says he thrives on tense negotiations, seeing it as a challenge to break through with humor, empathy and attempts "to think of ways in which the interests of both companies can be aligned."

"He's just creative in finding ways to get the deals done," said Terry Myerson, head of Microsoft's Windows Phone division. "Licensing intellectual property — doing it in a reasonable but win-win manner — requires incredible creativity and understanding of tech and global intellectual property."

When the Kinect — Microsoft's motion- and voice-sensing technology — was being developed, Gutierrez immediately saw the opportunities for the company, recalled Rich Wallis, deputy general counsel of Microsoft's interactive entertainment division.

"I remember being in meetings with him where he was so excited about the technology," Wallis said. "It was visibly palpable. He's a high-energy person. His voice gets a little quicker. His eyes light up. The hands start moving."

To date, Microsoft has reached more than 1,000 agreements in which companies either pay Microsoft royalties or have cross-licensing agreements in which each company uses the other's patented technologies.

One company notably absent from that list: Motorola, now owned by Google.

Representatives of Motorola and Google declined to comment for this report.

But Google has contended elsewhere that Microsoft, having failed to succeed in the smartphone market, is turning to legal wrangling over patents to "extort profit from others' achievements and hinder the pace of innovation."

Microsoft has also taken flak in years past after pursuing companies using the open-source Linux operating system, which includes technologies Microsoft said infringes on its patents.

Critics slammed the software giant, seeing it as a moral issue of Microsoft trying to stifle open-source development.

Gutierrez, naturally, did not see it that way.

"I grappled with [that] perception," he said. "I didn't think there was an actual issue at all. The companies taking advantage of us were commercial companies making money."

That same outlook applies to the company's patent battles with manufacturers using Android.

"You can't infringe on another company's [internet protocol] and give that away," Gutierrez said. "The solution is licensing."

Currently, more than 70% of all U.S. Android devices are licensed under Microsoft's program.

Gutierrez, a history buff, contends what's happening now with patent battles in the mobile business is what happens every time there's been a technological disruption: with the sewing machine, the telegraph and the telephone, for instance.

"What happened eventually was that litigation ran its course. Licensing programs took place or, eventually, technology evolved," he said.

Joff Wild, editor of Intellectual Asset Management Magazine, says that in terms of intellectual property, "I think Microsoft is probably playing the smartphone wars far more intelligently than any other company."

All tech companies try to manage their intellectual property strategically, Wild said. "I like the Microsoft strategy best because it's not driven by emotion; it's driven by business object."

Tu writes for the Seattle Times/McClatchy.

Los Angeles Times Articles