Deal Maker

When it comes to protecting intellectual property, Horacio Gutiérrez is a formidable fighter—but he knows when to pick his battles. Since taking over as head of the intellectual property (IP) group at Microsoft Corporation in 2006, the corporate vice president and deputy general counsel filed the firm’s first lawsuits for IP infringement, to protect patented innovations. But it is in deal making that the Venezuela native has helped change the course of the technology sector. Positioning Microsoft’s patents as assets for barter, Gutiérrez has turned the world’s top-selling software company into a partner, rather than rival, orchestrating licensing agreements with brands such as Novell, HTC, and Samsung. It seems the battle cry of this Harvard Law School Fulbright scholar isn’t to attack, but to collaborate.

By fostering collaboration instead of licensing battles, Horacio Gutiérrez is turning the IP industry on its head.

“You don’t have to be a technology expert to know we’re living in a revolution. A mobile device that fits in the palm of your hand carries exponentially more computing power than the Apollo 11 capsule carried to the moon. People use smartphones to chat, text, browse, take pictures, capture video, play games, watch shows, and download apps. Yet all of these technologies were developed by dozens if not hundreds of companies around the world, each owning a piece of the intellectual property. When IP is managed properly, the products consumers crave can come to market quickly, without being tied up in courts.

For a company like Microsoft that is in the business of innovation, IP represents our crown jewels. To be sure, leading the intellectual property group has been the most dynamic and exciting role I’ve ever had in my career. I have a smart, creative, and hungry team that understands how IP can foster innovation in the marketplace.

I knew early in life I would be an attorney, but I didn’t set out to work for a global corporation, much less in the United States. Growing up in Maracaibo, Venezuela, my dad was a lawyer and, at one point, a judge. At 16, I convinced my parents to let me move to the capital to study at the country’s best law school. Within six years, in 1993, I left a partner position at a Caracas law firm to become vice president of a Latin American investment bank. While in Miami on assignment, the company began to lay people off. Looking for job security, I took a position at Morgan, Lewis & Bockius LLP, and decided to make my home in the United States.

Microsoft called me in 1998, after reading an article I published in a law journal. The job offer came as such a surprise, I turned it down a few times before accepting, but it was the best career decision I’ve ever made. As I’ve moved up in the company, I’ve been able to see it, and the world, from different vantages. Perhaps the biggest highlight was living between Paris and Brussels, Belgium, for four years, honing my French skills while serving as chief legal officer of Europe, Africa, and the Middle East. What I love about my job now is that there is no shortage of challenges. Microsoft has invested in R&D (research and development) more than any company on the face of the earth—over $9 billion in 2011 alone. The result is breakthrough software. For example, we recently unveiled OmniTouch, which enables interactive, multitouch applications on everyday surfaces—like your notebook, or a wall, or even the back of your hand. Another technology, Holodesk, combines an optical, see-through display, and Kinect camera to create the illusion that users are interacting directly with 3-D graphics. We have more than 68,000 patents such as these, issued and pending. More important than the number, however, is their quality; they consistently rank at the top of independent scorecards.

Occasionally we have to enforce our rights to keep others from free riding on our investment. In the history of Microsoft, there have been less than 10 offensive patent litigations. While those have been under my watch, it’s still quite low compared to industry averages. In the smartphone-patent wars, we prefer to solve disputes by making business deals. Microsoft has signed more than 1,000 license agreements in the last decade.

In 2011, I led nine significant smartphone and tablet patent-licensing agreements, the most prominent of which was with Samsung. We cross-licensed a major part of our patent portfolio with theirs, which is even larger. We also arranged for Samsung to invest more heavily in the Windows phone and in the Microsoft platform more generally. Beyond the millions of dollars in revenue these deals generate, they open new opportunities for our products. My role is to find paths that not only resolve IP disputes, but open up channels for collaboration. There are a number of complex legal, regulatory, and public-policy issues that need to be sorted out as we realize the promise of technology. We will continue to tackle those challenges head-on and foster more collaboration around IP. This will enhance the IT ecosystem by enabling more diverse and cutting-edge products. There will always be a new mountain to climb—and that’s what keeps me going.”