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IPCU readers can save $200 on IP Dealmakers Forum Nov 6-8 in NY

Patent monetization is alive and improving.

Look no further than the 5th annual IP Dealmakers Forum, which will attract the top players in IP licensing, sales and litigation funding to the Alexandria Center overlooking NYC’s East River, November 6-8.

IP CloseUp readers can save $200 off of registration by using discount code IPDF18_CIPU.

Panels include:

  • IP Market Roundup: Light at the end of the Tunnel
  • In Patents We Trust: Government Updates & Outlook
  • Leveraging Data to Identify Valuable Patents
  • SEP, FRAND & Getting Ready for 5G
  • IP Investors Roundtable: Opportunities In and Around IP
  • What Matters Now: Navigating the New Deal Landscape
  • Corporate Governance & Activist Investing in IP

One-to-one meeting and networking sessions will be held throughout the conference.

A partial list of speakers includes:

  • Erich Andersen, Corporate VP & Chief IP Counsel, Microsoft
  • John Lindgren, CEO, IPVALUE
  • Todd Dickinson, Former Director, USPTO
  • Fred Fabricant, Head of IP Litigation, Brown Rudnick 
  • Paul Michel (ret.), former Chief Judge of CAFC
  • Hans Sauer, Deputy General Counsel for IP, BIO

For the full IPDF agenda, go here.

To register, go here.

CLE credit is available.

Images source: ipdealmakersforum.com

IP CloseUp readers can save $100 on Patent Law & Policy DC event

House Judiciary Committee’s Cong. Doug Collins (R-GA), a leading proponent of more effective IP legislation, will be a speaker at the 4th annual Patent Law & Policy conference to be held at the Ronald Reagan International Trade Center in Washington on November 23.  

Congressman Collins was instrumental in the success of the Music Modernization Act, a sweeping bi-partisan bill that brings the Internet in tune with songwriting and recording and provides a road map for fairer artists compensation while encouraging business

The House voted to support MMA 415-0. Cong. Collins is a strong supporter of patents, too. He spoke on patents earlier this year at Innovation Policy and IP, presented by the Center for IP Understanding. 

In addition to two keynotes, the Patent Law & Policy program will include the following panels:

  • Changing of the IP guard: the future of IP Policy
  • The litigation climate in 2018 and beyond
  • SEP FRAND
  • Developments at the PTAB
  • Winning tips for the PTAB

For the complete program, go here. For the list of speakers, here.

IP CloseUp readers can save $100 on the standard delegate rate by using code CIPU100 here: http://bit.ly/IAMPLAP2018

(NOTE: The code cannot be applied by IP service providers and is only valid for registrations made on or after September 3 2018.)

IAM’s Patent Law & Policy has established itself as the leading Washington D.C. event for anyone interested in how the legal and political climates shape the patent market. The event analyzes recent developments and the impact they could have on future proceedings, and responds to questions like How will the political climate shape the patent landscape? What effect will the new U.S. Congress have on the IP market?

Image source: iam-events.com; serrano.house.gov

12-fold increase in China’s U.S. trademark apps; many are said to be fraudulent and improperly filed

Cash subsidies are among the incentives fueling a dramatic rise in U.S. trademark applications by Chinese filers. Thousands are said to be  improperly filed and unlikely to be granted. 

In a national effort to increase IP ownership China is paying companies and individuals, some of them prisoners, as much as the equivalent of $800 to register a trademark in the U.S.

“The U.S officials say many China filings show a pattern of suspicious claims about the goods in question and the qualifications of the attorneys handling them,” reports the Wall Street Journal.

China may be attempting to “disrupt” the U.S. system by flooding it with huge numbers of applications, making it potentially more difficult for business to obtain the marks they desire, especially those that may be associated with products that are sold in e-commerce.

Mark Cohen, UC Berkeley law professor and former USPTO expert on China told IP CloseUp that he did not believe there is a concerted effort to undermine the U.S. trademark system.

“China is metrics-driven, numbers-oriented society,” said Cohen, who is fluent in Chinese. “It wants to achieve government-established goals and will resort to incentives to achieve them. This planned approach can lead to the kind of spikes we have been seeing in trademark applications. The ultimate impact is unclear.”

In addition to paying cash incentives, China has been known, says Professor Cohen, to award tenure, defer income taxes and reduce sentences of prisoners who obtain marks. Similar motivations have been known to exist in the patent space, where China is a leading U.S. filer and number two globally. If the pattern continues, it will soon be number one in both trademarks and patents.

Numbers Game

This rapid rise does not necessarily lead to high quality IP rights or to appropriate use of them. But IP does apparently amount to something of a numbers came to China.

Cohen believes that many of the filers are small businesses selling online goods such as phone chargers and cheap clothing. Whether they are every in a position to enforce their marks, if infringed, remains to be seen.

Representing a number of Chinese trademark filers are foreign attorneys who are not licensed to practice in the U.S., which violates application rules.

These payments by the Chinese government amount to nearly $800 per US trademark registration that is obtained (a potential profit per trademark of $525 after filing fees), reports trademark attorney Josh Groben.

Full-time Job

“Given that the median monthly income for a Chinese citizen is around $1,000,” says Groben, “the government payments make it possible for someone in China to have a full-time income by registering just two US trademarks per month.”

The U.S. received more than 50,000 applications from China in the year through September 2017, accounting for 8.5% of all trademark filings.

It is difficult to know how aggressively legitimate Chinese trademark holders will enforce their rights against infringers. In the U.S. complete failure to enforce will lead to a weakening of an owner’s marks, loss of distinctiveness over time and potential forfeiture of certain available remedies.

Image source: creekmorelaw.com; lexology.com

LES annual meeting to be held in Boston October 14-17

The birthplace of innovation, Boston, is the site for the 2018 Licensing Executives Society meeting.

The opening session, “Advancing Innovation Through a Renewal of Trust,” will feature Andrei Iancu, USPTO Director, Bill Elkington, Senior Director – IP Management, Rockwell Collins and Walter Copan, National Institute for Standards and Technology (NIST) Director and Under Secretary of Commerce for Standards and Technology.

Other sessions include:

  • Funding Startups – The Boston Perspective
  • Increasing ROI for Government-Funded Research
  • Advanced Telecommunications Licensing, 4G, 5G and LTE for Automobiles
  • US or Them – Who is Going to Set Standards for Licensing
  • Patenting Machine Learning
  • 2018 Tax Consequences: Coordination of IP Monetization and Tax Planning
  • Life Sciences Partnering Performance and Reputation Survey Results
  • Maximizing IP Value and Minimizing Risk in M&A Transactions

For the full 2018 LES annual meeting agenda, go here. For the speaker biographies, please visit http://www.lesmeetings.org/am18/speakers/

To register, go here.

Image source: lesmeetings.org 

IP CloseUp is named a “top 50” intellectual property blog

IP CloseUp has been named by Feedspot as a top-50 intellectual property blog.

Feedspot, a news aggregator, named the top 100 IP blogs in which IP CloseUp was number 48.  IPCU beat out quality competition, including many law firm publications and those from leading IP services providers.

Criteria for inclusion on the list includes number of searchers and followers, as well as content.

“It’s an honor to be recognized as a leader in IP news and analysis, especially in the company of such publications as IP Watchdog, IAM and IP Law 360,” said Bruce Berman publisher and editor of IP CloseUp. “IPCU’s mission is to spot relevant trends early with the help of our network of IP and industry contacts.”

IP CloseUp, which first appeared in 2010, covers original and thinly reported IP developments, events, people and transactions, via weekly posts. IPCU also makes available interesting videos and reviews new books. It’s coverage of automotive inventor Robert Kearns, who was depicted in the film, “Flash of Genius,” has generated more than 75,000 visits.

For the complete top-100 list, go here

Image source: feedspot.com

 

Rich values for IP services providers defy investor expectations

Prices for companies that support and sell IP services and analytical software remain surprisingly strong, even as patent licensing and sales continue to decline.

Their success appears to be fueled by the very problems facing patents: lower values and lack of certainty.

IP tools providers are the proverbial sellers of picks and shovels; the “miners” take the primary risk. Most are satisfied with the steady cash flow, while their clients make the big bets in R&D and litigation. Uncertainty makes investing even more dangerous and the information premium more valuable.

                                    __________________________________________

For the full IP services deal story, “Defying the monestisation market” in the September IAM magazinego here. In this issue the Intangible Investor explores recent IP service firms transactions and their prices.
                                         ______________________________________

Examples of IP services successes include CPA Global’s 2017 acquisition by private equity firm Leonard Green & Partner’s for 2.4 billion pounds ($3.1B USD). Cinven had acquired the firm in 2012 from Intermediate Capital Group for around £950 million ($1.3 billion), backed
by $555 million of debt financing.

In 2015, CPA Global – with approximately $12 million in revenues and no profit – acquired Innography for an undisclosed amount. An industry-insider told IP CloseUp it was likely between $80 and $90 million, or about seven times revenue. Innography, with a strong reputation, had raised $14 million in venture capital.

AI Driven

Thomson Reuters sold its IP and Science business in 2016 to Onex and Baring and Private Equity Asia for $3.55 billion. The company is now Clarivate Analytics.

Among the newer and more interesting entries in the IP services space is ClearAccessIP, a Palo Alto, CA-based firm “that indexes patents, looks for vulnerabilities in a corporation’s patent strategy, and finds opportunities in a patent collection for further value.”

Founded by Nicole Shanahan, a young patent attorney who served as a researcher for IP scholar Colleen Chien at Santa Clara University College of Law. Professor Chien is a member of the Clear Access IP Advisory Board, along with former AIPLA president Wayne Sobon.

“I am essentially trying to build and democratize a marketplace platform because not all patent holders and sellers can afford the large transaction firms,” she says. “I’m also solving a very old problem and putting docket management in the cloud.”

An extensive interview with Shanahan appears in Software Engineering Daily. The audio can be found here; the written transcript, here.

Ms. Shanahan, it seems fair to inform readers, has been living with Sergey Brin, founder of Google and President of its parent company, Alphabet, Inc., which, historically, has been dubious about strong patents.

New Wave

IP services and software providers, especially those using the latest algorithms, may represent a new wave for beleaguered IP holders and their law firms seeking to manage patent risk. The computing strength and analytics capability they offer may be just what some IP holders and margin-conscious law firms need to compete, or these companies may simply be repackaging the outsourcing mantra for the AI age.

These relationship-driven, technology-focused service providers are likely to grow in value as global patent applications and portfolios increase and uncertainty lingers. An improved outlook for patent licensing will make them even more attractive.

Image source: softwareengineeringdaily.com; clarivate.com; cpaglobal.com 

Can blockchain be a game-changer for millions of IP transactions?

The abundant promise of blockchain has yet to be realized. To many in IP, finance and tech, it is just beginning to come into sight.

The initial application of blockchain’s distributed ledger, bitcoin, has turned out to be more of a speculative sideshow than a legitimate alternative currency. We hear repeatedly that bitcoin is merely the first of many possibilities, and that blockchain should not be judged on the basis of bitcoin.

Fundamental Change?

One of the most intriguing areas of potential for blockchain, or encrypted distributed ledger of data, is transacting IP rights — so-called smart transactions. Smart transactions aim to make more efficient millions of copyright, patent and trademark licenses by providing greater transparency and the removing costly middlemen. It sounds great – but can it really happen or is it merely the alchemists’ fantasy?

In April, Managing Intellectual Property, magazine ran a feature on blockchain, “Blockchain Party,” which can be found here. The special report discusses how blockchain will fundamentally change IP transactions, and haw already started to. The race for blockchain patents is well under way, with U.S. and some European banks, fintech firms and tech companies jockeying for position with the Chinese.

Who use blockchain?

The following infographic from Bitfortune.net, a bitcoin promotion and gaming website, offers 16 industries and areas where distributed ledger adoption is underway. (Sources for the data are offered at the bottom of the graphic. They have not been checked.)

Bitfortune says “many experts believe that blockchain will change our world in the next 20 years as much as the internet has over the past 20.”

[Three useful blockchain articles follow the long infographic below.]

 

More on blockchain:

IP CloseUp: 59% of blockchain patents are owned by developers; BofA and IBM dominate banks and tech players.

DS Avocats: Blockchain, Smart Contracts and Intellectual Property.

WIPO Magazine: Blockchain and IP Law: A Match Made in Crypto Heaven?


Inauspicious Beginnings

Can blockchain shake off its inauspicious beginnings as bitcoin foundation and deliver on its promise?

Many are pulling for it, including me and several banks, fintech businesses and technology players, who are either investing heavily or hedging their bets.

 

Image source: bitfortune.net

In Memoriam: Dan Scotto, perennial “All-America” Wall Street Analyst and Research Director

Dan Scotto, a Wall Street research icon in the 1980s and 1990s died last week and with him an era of investment research that is not likely to return.

Dan’s understanding of assets, tangible and intangible, and how they could be monetized, was ahead of its time. He taught by example and showed a generation of debt investors the value of seeing beyond the financials and understanding people.

He taught me that every discrepancy between an S&P or Moody’s rating and a bond analyst’s is a potential news story or investor opportunity.

Dan spotted weaknesses in Enron early for BNP Paribas, and on August 23, 2001 changed his “buy” rating to “hold” and told clients that the bonds “should be sold at all costs and sold now.” He later told the Wall Street Journal that if he had gone with a “sell” rating instead, “I’d have been taken out to the guillotine that very day.” When he called out Enron, he had become an inadvertent “whistle-blower.” To Dan, he was simply doing his job with his trademark grace and humor.

Brooklyn-born

Dan grew up in Red Hook, which at the time was an unfashionable part of Brooklyn. He marveled at the transformation and split his time between Manhattan and Greenwich. Despite his impressive track record and trademark J. Press suits he was never fully comfortable in Greenwich or Manhattan, and seldom went out or traveled, except on business. He was married to the job.

Dan Scotto, circa 2000

Dan came up as a high-grade (corporate) bond analyst first at Standard & Poor’s and then at L.F. Rothschild, Unterberg, Tobin, the venerable high-tech underwriter, where he remained focused on corporate debt for institutional investors. His ascendance coincided with a time of declining interest rates, and a good place for a bond analyst not afraid to make buy-sell recommendation. His specialty was electric utilities, where he was revered, but he also managed other top analysts in telecommunications, banking and energy, among other industries.

Dan and his team were brilliant, but they were not the intimidating quants that some funds tout. That was not Dan’s style. He and his team trusted their ability to understand management and read between the lines – and they were almost always right. Dan did his homework, and worked closely with his friend and most trusted adviser, telecom analyst Marion Boucher (now Marion Holmes), leading a research team that won Institutional Investor “All-America” honors on a regular basis. The first year that bond analysts were included in the i.i. investor poll, Dan was number one in all categories.

Investors not Bankers

At a time when basic industry research and investment banking business mattered most, Dan focused on investors’ needs, and they loved him. After L.F. Rothschild (which Dan liked to call “the Brooklyn Rothschild”) he went to the venerable Donaldson, Lufkin & Jennette (DLJ), which eventually absorbed into Credit Suisse, and then to Bear Stearns, one of the fiercest firms on the Street, where he and his high-grade team achieved top research honors.

Dan could be a tortured soul – especially if things did not go right or when people disappointed him. He was proud of his unprecedented nine-year number one “All-American” ranking – something he knew that he had to earn annually. He was cynical about Wall Street, especially bankers, who used him as bait for deals, and traders, who saw him as overhead that took bonus money out of their pockets.

Dan will be remembered not only for his instincts and dedication, but also for his loyalty, good humor, incisive and and often playful written reports, and, most importantly, his generosity of spirit. He will be missed.

Rest in peace.

Image source: Whitehall Financial Advisors

AST’s 2018 patent purchase program is open July 9 – July 20

Patent holders, this year’s version of Allied Security Trust’s Industry Patent Purchase Program, “IP3,” is a good indication of where the demand is highest.

The 2018 fixed price, time-limited program AST and its members are searching for patents primarily in the following categories:

  • Artificial Intelligence / Machine Learning
  • Augmented Reality / Virtual Reality
  • Automotive / Transportation Services
  • Blockchain
  • Internet of Things / Connected Devices
  • Smart Home
  • Software / Web Services

Most technologies are no surprise, but others, like Augmented Reality/ Virtual Reality, may encourage lawyers and their clients to revisit portfolios. It is also good to see interest in Software Patents, as well.

The window for submitting patents for sale will be open from July 9 through July 20.

For complete IP3 2018 program details and to submit your patents for sale, go here.

Image source: ast.com

Authors to DOJ: “Strong patent rights are vital to U.S. economic and security interests”

The United States Supreme Court and the Congress have moved to weaken patents over the past seven years without realizing the inherent danger to national interests.  

“Strong patents rights are vital to the economic and national security interests of this country,” say James Rill and David J. Teece in an article published last week, The DOJ must Exalt Intellectual Property Rights,” in RealClear Markets.

The article states that the U.S. Department of Justice must use its power to move intellectual property rights like patents into mainstream acceptability, and prevent them from being undermined “under the guise of anti-competitive behavior.”

Authors James Rill, Senior Counsel at Baker & Botts, served as Assistant Attorney General for Antitrust at the U.S. Department of Justice; David J. Teece is Professor in Global Business and director of the Tusher Center for the Management of Intellectual Capital at the Walter A. Haas School of Business UC Berkeley and a renowned economist.

“Assistant Attorney General Makan Delrahim’s recent policy statements and enforcement actions have re-asserted the historical value of intellectual property rights,” say Rill and Teece.

“He has suggested that the value of these rights have been inappropriately curtailed by the misapplication of antitrust principles, which could threaten the future of U.S. innovation efforts. As a result, AAG Delrahim has begun to restore the balance between antitrust and intellectual property rights, and has moved this important issue to the forefront of antitrust discourse.”

For the full article, go here.

Better Incentives Needed

Also published last week by Professor Teece in Competition Policy International, is a related in-depth article, “Enabling Technology, Social Returns to Innovation, and Antitrust: The Tragedy Of Depressed Royalties.” 

“Empirical studies show that almost all classes of R&D activity are under-supported,” argues Professor Teece. “Two in particular are grossly under-compensated: (a) basic research and (b) enabling (or general purpose) technologies… consideration needs to be given to amplifying, not diminishing, incentives for upstream investment in R&D. Such investment is perhaps among the most precious that society makes.”

Teece cites Nobel Laureate economist Douglass North on the impact of innovation incentives:

Throughout man’s past he has continually developed new techniques, but the pace has been slow and intermittent. The primary reason has been that the incentives for developing new techniques have occurred sporadically. Typically, innovations could be copied at no cost by others and without any reward to the inventor or innovator.

Recent efforts to enlist antitrust as a lever against patents, says Professor Teece, “have threatened to undermine incentives for R&D in several important areas.”

Subtle, theory-based antitrust arguments around patent “hold up” are a handy disguise for implementers and antitrust agencies to use to under-reward and thereby under-incentivize legitimate innovators.

Image source: cjnotebook.com; wsj.com

 

Responsible deal-making is the focus of SF IP conference, 9/18

Responsible IP deal-making – where parties enter into licensing and other agreements mutually – has become something of a lost art. Not long ago, it was a best-practice.

Many companies need to in-license to practice the inventions that cover their products. Similarly,  not every business has the capital to make products from its inventions. Those that do not, may need to out-license. Once a symbiotic relationship that could be effected without the need for litigation, much patent licensing has turned contentious and patent holders who wish to license are seen as bad actors.

“Patent Licensing: The Business of Responsible Licensing” hopes to change that. The location is the Golden Gate Club in San Francisco on September 18.

Post-“Troll” Environment

The day of the so-called “troll,” where licensing businesses armed with nuisance suits forced businesses to settle, is long gone, the victim of increased patent uncertainty and the high cost of litigation.

What is responsible licensing in today’s environment? What are fair and reasonable terms? This conference will examine various sides of the issue.

IP CloseUp readers receive a 15% discount with a promo code or mention they saw this article. (Service providers may not be eligible.)

Participating in the day-long event are licensing executives from Dow, Nokia, Visa, Samsung, Cisco, Intel, among others. Panels include:

  • Building a successful patent licensing strategy
  • The good, the bad, and the ugly of licensing transactions
  • Defining FRAND
  • International licensing
  • Strategic licensing scenarios

There will be ample breaks and time for networking.

For the complete program, go here.

For the list of speakers, here.

To register, go here.

Image source: iammagazine.com; mckinsey.com

 

 

Can the U.S. compete with China without a focused innovation policy?

More nations today have an innovation policy than do not – that is except for the U.S. 

The U.S. not only has no centralized innovation and intellectual property policy, it has no real strategy for making IP rights more meaningful and American businesses more competitive in the wake of initiatives from China.

Some believe it is not the job of policymakers to tinker with free-markets or favor certain industries. Well, that may have worked in the past, but with China committed to dominating global innovation – and with unlimited capital – the U.S. must reexamine its strategies.

What it is not supposed to do is assume that it is business as usual.

The United States has a tendency to repeat past mistakes, such as in the case of so-called “Japan, Inc.,” which devastated the auto and electronics industries with more advanced products. It is currently contending with China, which has approximately ten times the population of Japan and has quadrupled its investment in technology over the past decade.

“US innovation policy: Time for a makeover,” a fresh take on dealing with competition in the Intangible Investor, can be found in the July IAM magazine, out this week, here.

Innovation policy in the United States is mostly a series of suggested strategies and directives from several government agencies and industry organisations primarily designed to address foreign IP infringement (i.e., theft). It is often tied to science and economic policy, and is typically reactive – not proactive.

“Better innovation policy not only permits established industries to compete,” says the Intangible Investor, “it facilitates success for the next generation of inventors, authors, designers and software developers. It also helps to supply context for a confused and wary public susceptible to false media narratives – intellectual property is not the enemy, nor are rights holders and lawyers.”

Enforcement is Not Policy

Trump’s anger about China IP violations, justified or not, does not constitute an innovation policy. Innovation policy is not just about enforcement or supporting the science, technology, engineering and math (STEM) curriculum for the next generation of inventors. It is about understanding the current economic and political context and responding as a nation.

“The FAANGs, and others, who dominate the competition and monetize their customers’ information, often without permission, realize they are increasingly symbols of bad business behavior,” Bruce Berman wrote recently in IP Watchdog. “The heat they feel from regulators in Europe and the U.S. will continue to rise.

“IP infringement will come to be seen as an increasingly important part of their bad behavior. The timing is perfect for them to step back and step up and show the leadership they heretofore have ignored regarding IP rights. Movement toward a responsible IP middle ground – a less entrenched position that recognizes others’ rights and actively conveys a greater willingness to share successes, not only defend them, will help to inform a meaningful IP policy.”

Quick-Reading Guide

For further background on U.S. innovation policy, read a timely and insightful perspective on U.S. innovation policy from James Goh, a young Wharton student from Singapore, “Primer: Innovation Policy in the United States.” 

For a linked quick-reading list about innovation and IP policy from the Center for IP Understanding, go to page 4.

Image source: q3research.com; breakinggap.com

 

 

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