Are publicly-owned businesses that monetize patents a catalyst for innovation and job creation or a roadblock to profits?
Georgia State University College of Law is featuring at its May 14 “Hot Topics” luncheon discussion of an emerging trend that has divided innovators, investors and lawmakers.
“How are Public IP Companies Affecting Innovation and Investment?” will be the focus of a mid-day presentation at which yours truly, Bruce Berman, has been invited to speak.
Pubic IP Companies, also known as PIPCOs, are an emerging trend with no fewer than 30 currently traded on U.S. and UK stock exchanges. (See IP CloseUp® 30, here, for a list.) Some believe these businesses are no more than non-practicing entities, NPEs, or to some patent “trolls,” re-purposed for better access to capital. Others believe that PIPCOs, some of which are operating businesses that sell products, are part of the inevitable evolution of IP rights as an asset class, and are a viable business model.
Will IP monetization companies whose shares are bought and sold on the public stock markets deter commerce, as some academics suggest, or will they serve as a catalyst for more and better innovation, and higher return on the R&D investment that underlies patents?
Regulatory Disclosure – Burden or Opportunity?
S.E.C. mandated disclosures will provide some transparency for public IP companies. They are an opportunity for all IP rights holders to put their intangible assets, amorphous at best, in a clearer business context. Hopefully, transparency will encourage other companies whose IP is an integral part of their particular value proposition to demonstrate more visibly the role it plays in generating return or protecting revenue and market share.
It has yet to be determined whether the investor public has the ability, or the access to the right information, to interpret complex legal developments, such as a favorable Markman hearing or a venue change in a patent litigation, and gauge their impact.
PIPCOs like Qualcomm and InterDigital have led the way, while businesses like RPX and Acacia have come up fast behind them, and still others, “micro caps” with market value typically under a few hundred million dollars, are bringing up the rear. The smallest players are most dramatically affected by a successful settlement or licensing agreement. They present the best opportunity for investor return, but they also are the most volatile.
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Past speakers at GSU Hot Topics and Corporate IP Roundtable Annual Series have included Kevin Rivette, author of Rembrandts in the Attic, Marshall Phelps, former VP of IP Business and Strategy at IBM and Microsoft, and Judge Paul Michel, who served as the Chief Judge of the Court of Appeals for the Federal Circuit.
The 9th Annual IP “Hot Topics” luncheon will confront the public IP company question head on. For those interested IP Hot Topics is being held at the GSU Student Center on May 14, 2013 at 12 Noon. I look forward to seeing you there.
Image source: GSU.edu