Hinman on UIPM Podcast Debut: Quarterly Reporting of IP Rights Boosts Companies and Investors

Brian Hinman knows a thing or two about IP rights.

Hinman believes that companies need to scrutinize them more systematically and openly if they hope to maximize return on their investment. In the first episode in a six-part podcast series, ‘Understanding IP Matters,’ conversations with prominent inventors, creators and entrepreneurs, Hinman lays out a vision of IP as reportable assets. The episode is titled The Hidden Value of IP Understanding.

Recognizing IP rights like patents, trademarks and trade secrets as monetizable business assets provides investors with knowledge and an informed public with an understanding of how patents serve society.

Hinman is Chief Innovation Officer at Aon IP Solutions. Previously, he served at Chief IP Officer at Philips, VP of Licensing at IBM and Verizon, co-founded Unified Patents and served as Chairman of Allied Security Trust. Since 2017, he has been a member of the board of directors of the Center for Intellectual Property Understanding. 

Excerpts from the podcast episode below have been condensed for space:

Interviewer: Who should be responsible for intellectual property?

BH: For a lot of companies and people intellectual property is something that you leave to the patent attorney. To them it’s not a legal issue that they don’t need to be concerned with, but actually, on the flip side, everybody should be concerned about licensing because of its impact. It’s become more challenging because companies are more protective of their universe. They’ve got a lot of weapons. If you’re going after them for patent infringement, you know they’re going to be ready.

Monetization’s has become more difficult, but it has also become more rewarding because new avenues have opened up overseas. The venues in Germany, the UK, the Netherlands and France, have opened up and you can get injunctions much more readily than you can in the U.S. For patent holders these are easier to access venues for monetization.

Interviewer: You have worked for companies like InterDigital whose primary source of revenue is patent licensing. How is that not “troll” behavior?

BH: Interdigital is a great company. I’ve got a ton of respect for Bill Merritt. We’ve done great things together and he was a great boss. What we have here is a company that’s internally generated most if not all of its R&D. So they spend a ton of money on research, generating their own inventions and IP rights. They’ve done some acquisitions, as well, but for the most part, they generate their own inventions.

Even Phillips, IBM and companies like Erickson are active in licensing. You could call them non-practicing entities because they’ve got patents that they’ve generated but not practicing. So are they a patent ‘troll’? The way that I make the distinction, and I think a lot of people would agree, is that, you separate the wheat from the chaff.

Interviewer: Where does patent quality come in?

BH: You look at the portfolio, if somebody has a good quality asset with solid claims that read on a product that’s great. If it’s very strong patent that has applicability with their parties. Sure, why not go out and monetize. That kind of separates the companies that are going out and acquiring rights and then going after a hundred companies for a license on patents that have poor quality. That’s not good behavior.

Interviewer: Where do you see IP monetization going?

BH: Whether you’re a creator or a consumer, you absolutely need to know something about IP. Creators, most certainly, because they need to figure out where they fit in with ways to capture innovation. Consumers need to know the implications of copying or misusing music and other content — they need to think about what they’re doing and who it affects. Understanding the whole world of copyright and creation is important, especially if someone has spent a lot of energy [and capital] on something. Respecting those rights is very important.

Interviewer: What do you know today about IP that you wish you did when you started out?

BH: There has to be a standardized way to value intellectual property. There are a lot of people with different theories and different constructs, doing Black Shoals or market analysis, and cost methods for evaluation, but you really have to combine them to see the whole picture. Combining quantitative measures of value with qualitative, which look at opportunity and risk, provides balance.

We need a standardized way to value all IP rights. Once [executives] understand and embrace basic standards, that’ll get reflected on the balance sheet and the pressure will be on to companies to understand what they have and report on a quarterly basis.

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For the ‘Understanding IP Matters’ podcast episode featuring Bran Hinman, The Hidden Value of IP Understanding, go here.

Image source: CIPU; understandingip.org

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