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Fixing the patent system/ promoting jobs is focus of Capitol Hill event

An increasing number of experts say the U.S. has lost its edge in the battle to secure and defend meaningful patents that stimulate competition.

It is with making U.S. patents important again that “Promoting Innovation, Investment and Job Growth by Fixing America’s Patent System” is being held on Monday May 8 at the United States Capitol Building, Washington, D.C.

The invitation-only event hosted by the U.S. Chapter of the International IP Commercialization Counsel (IIPCC), will feature an all-star list of presenters from business, government and law.

Speakers Include

Dr. Carl J. Schramm, University Professor, Syracuse University; Former President of the Ewing Marion Kauffman Foundation for Entrepreneurship; Board Member IIPCC; David Kappos, Partner, Cravath, Swaine & Moore LLP; Former Under-Secretary of Commerce and Director of the USPTO; Q. Todd Dickinson, Senior Partner, Polsinelli, PC; Former Under-Secretary of Commerce and Director of the USPTO; Judge Randall Rader, Former Chief Judge of the U.S. Court of Appeals for the Federal Circuit; Board Member IIPCC;  Judge Paul Michel, Former Chief Judge of the U.S. Court of Appeals for the Federal Circuit; Charles Henry Giancarlo, Former CTO and Chief Development Officer Cisco Systems and former Managing Director Silver Lake Partners; Phil Johnson, Former Senior VP, Intellectual Property Strategy & Policy, Johnson & Johnson; Marshall Phelps, Vice-Chairman, Center for IP Understanding; former VP IP for Microsoft, IBM, Bob Pavey, Partner Emeritus, Morgenthaler Ventures; former Chairman of the National Venture Capital Association;

Manny W. Schecter, Chief Patent Counsel, IBM Corporation; Laurie C. Self, VP and Counsel, Governmental Affairs, Qualcomm; Bill Elkington, Chair & President Elect, LES USA and Canada; Senior Director, IP Management, Rockwell Collins; Orin Herskowitz, SVP of IP & Tech Transfer, Columbia University; Executive Director of Columbia Technology Ventures; Teaches ‘IP for Entrepreneurs’ in Columbia’s Engineering School; Professor Adam Mossoff, Director, Center for Protection of Intellectual Property, George Mason; Professor Jeffrey A Lefstin, Associate Academic Dean and Professor of Law, UC Hastings; Robert B. Aronoff,  U.S. Executive Director, International IP Commercialization Council; Managing Partner, Pluritas; Damon Matteo, CEO, Fulcrum Strategy; Robert P. Taylor, President, RPT Legal Strategies; Venture Advisor, New Enterprise Associates, Bruce Berman, Chairman, Center for IP Understanding; Publisher, IP CloseUp; Principal, Brody Berman Associates; Elvir Causevic, Managing Director, Houlihan Lokey Tech+IP Advisory, Art Monk, VP IP Transactions, TechInsights; Rob Sterne, Founding Director at Sterne, Kessler, Goldstein & Fox

Opening Panel

IP CloseUp publisher and editor, and Center for Intellectual Property Understanding Chairman, Bruce Berman, is moderating the opening panel at 2:00 pm: The business impact of IP uncertainty and negative attitudes. Panelists include:

  • Manny W. Schecter (IBM)
  • Phil Johnson (J&J)
  • Marshall Phelps (Center for IP Understanding)
  • Laurie Self (Qualcomm)
  • Bob Pavey (Morgenthaler Ventures)

“Our patent system may no longer be providing the protection and incentives necessary to entice investors and entrepreneurs to assume the enormous risks that inhere in the creation of many new technologies and new companies,” said Rob Aronoff, IIPCC U.S. Chapter Chair.

“In recent years patent reform initiative have resulted in significant unintended consequences, including a decline in the reliability of patents is contributing to a waning of entrepreneurial energy and a decline in the risk tolerance of American investors and entrepreneurs.

Profound Implications

“This shift has profound implications for the long-term U.S. economy, as China, Korea, Germany and other countries expand the role that patents play in their economies with ambitious plans to displace American dominance of technology in the years to come. This program will explore the direct and essential role that strong and enforceable ‘good patents’ play in allowing investors and entrepreneurs to justify the high levels of risk that drive innovation.”

Conference sponsors include Houlihan Lokey, TechInsights, Qualcomm and Pluritas.

Partners include IAM Magazine, the Licensing Executives Society, the Center for IP Understanding, USIJ Alliance for Startups & Inventors for Jobs and IP CloseUp.

For more information, go here.

Those interested in attending can request and invitation, availability permitting, by emailing rob.aronoff@iipcc.org.

Image source: iipcc.org; west-windsor-plainsboro.k12.nj.edu

 

 

Philanthropist & patent licensing pioneer, Eugene Lang, dead at 98

One of America’s most successful and charitable patent licensing strategists passed away last week. 

Eugene M. Lang, describe as “an American folk hero” for his generous philanthropy, grew up on Manhattan’s East 83rd Street in a $12 per month railroad flat.

He went on to donate more than $150 million to charities and institutions during his lifetime for educational causes, including the I Have a Dream Foundation, which he established in 1981; the Eugene Lang College, part of the New School in Manhattan; the Eugene M. Lang Center for Entrepreneurship at Columbia University School of Business; and Swarthmore College, which he entered at 15 on a scholarship.

Much of Lang’s fortune was derived from the Refac Technology Development Corporation, it was reported in his obituary, a public company he founded in 1952 that specialized in the licensing of patents and financing high-tech ventures.

Thousands of Suits

“REFAC held patents relating to LCDs, ATMs, credit card verification systems, bar code scanners, VCRs, cassette players, camcorders, electronic keyboards, and spreadsheets,” reports Wikipedia, “and filed thousands of lawsuits against other corporations to secure licensing fees or out-of-court settlements, a business practice of some very large corporations such as Microsoft and Google as well as large startups such as Intellectual Ventures, and sometimes criticized as patent trolling.

Some considered Refac International Ltd., known for suing thousands of big and small companies to protect its patents, the model on which other non-practicing entities (NPEs) were based. In 1990, the company was chastised by a federal appeals court in Washington after losing a major lawsuit it filed against 118 Southern California companies selling products with liquid crystal displays.

The New York Times reported that Refac — the name stands for resources and facilities — had made much of its money “by aggressively filing patent infringement suits against companies like IBM and Eastman Kodak and retailers like R.H. Macy and Radio Shack on behalf of inventors of a wide range of products: liquid crystal displays, automated teller machines, bar-code warning systems and spreadsheet software.”

In a letter to The Times [valuable for its historical and factual content], Mr. Lang called the article “grossly distorted” and pointed out that most of the clients represented in lawsuits had sought out Refac after offering licenses to the corporations for their inventions and being turned down.

He illustrated his argument by citing the inventor of the laser who had tried to get industry to recognize his role and succeeded only after Refac won validation of his patents in the courts.

“For Refac, the drama of litigation began in 1975 when Gordon Gould, after battling industry opposition since 1959, asked us to represent his claims as inventor of the laser,” wrote Lang.

“Concluding that Mr. Gould’s claims had genuine merit, Refac, against all odds, accepted the challenge. It took until 1987 and some $4 million, but the courts finally validated every patent of Mr. Gould’s. Despite vituperative reactions from the laser industry – analogous to quotations cited in your article – claims that in 1975 might have been labeled ”all but worthless” now generate annual royalties in excess of $12 million.

Impulsive Gesture

A self-made businessman who flew coach class and traveled on subways and buses, Lang is best remembered for his impulsive gesture in June 1981, when he was invited to deliver the commencement address to 61 sixth graders at Public School 121 on East 103rd Street in Spanish Harlem. He had attended P.S. 121 as a boy 50 years earlier.

He made himself personally available to the students, counseling them when they faced obstacles such as teen pregnancy, addiction, and delinquency. He cheered them at their graduations and helped arrange for jobs. When a student was incarcerated at Sing Sing, he helped him pursue college course work from prison.

In addition to his daughter, Jane Lang, a Washington lawyer and community activist, Lang is survived by two sons, David and the film and stage actor Stephen Lang (Avatar, Conan the Barbarian, Gettysburg); a sister, Barbara Lang; eight grandchildren; and eight great-grandchildren.

In 1996, President Bill Clinton awarded Mr. Lang the Presidential Medal of Freedom.

For more information about the Eugene M. Lang Foundation, go here.

Image source: thenewschoolhistory.org; newsworks.org

Bloody AC-DC patent war depicted in new novel by Oscar winner

If you thought the 19th Century was a kinder, gentler time for the people responsible for break-through inventions, you would be mistaken – it was not much better than today. 

The bitter battle for the electricity standard between Thomas Edison and George Westinghouse was nastier than a bar room brawl. It has all the drama of a Hollywood movie, which, in fact, it is currently being made into.

Last Days of Night is a New York Times best-selling historical novel written by the Oscar-winning writer of “The Imitation Game.” It tells the true story of the battle between direct and alternating current for the electricity standard, one that involved fundamental patents, lawyers (Paul Cravath, 18 months out of Columbia Law School), lawsuits (312 of them), bankers (J.P. Morgan), a phobic inventor (Nikola Tesla), the press, and electrocutions of animals and a human.

Keen Observer

Last Days of Night is not classic literature. Its short chapters give it the feel of a pot-boiler. However, the book’s is timely for an ability to reveal character – good and bad – in the face of adversity and is a keen observer of the inventive process.

It is no surprise that its author, Graham Moore, won an Oscar for his adaptation of The Imitation Game, the story of British mathematician Alan Turing, who cracked the Nazi’s enigma code, but who was a victim of his time.

Moore is currently adapting Last Days into a major motion picture starring Eddie Redmayne, who won the Best Actor Oscar for his portrayal of the young Steven Hawking in The Theory of Everything. The Last Days movie, with an all-star team in control, has a good shot at achieving what few books and films have: a realistic portrait of the relationship between inventions and the people and systems that drive them.

Deeper Dive

IAM subscribers go here for the May issue, which contains “Book Sheds New Light on an Epic Patent Battle,” a deeper dive into this strangely inspiring, mostly factual, novel that reminds us that the premium on new ideas is as tied to people as it is to capital and genius.

Much to his credit, Graham Moore’s provides a lengthy note from the author, detailing what he condensed in the novel and why. His historical timeline (mrgrahammoore.com) helps readers to separate fact from fiction, for a fuller appreciation of the people and events that helped to secure a bittersweet victory for AC.

To purchase Last Days of Night, go here.

Image source: mrgrahammoore.com

Center for IP Understanding is started by leading IP execs to raise awareness, improve attitudes

The Center for Intellectual Property Understanding (CIPU), an independent, unaffiliated non-profit dedicated to increasing IP awareness and improving negative attitudes towards patents, copyrights and other rights, was launched in New York last week. 

As reported in IAM, Law 360, World IP Review and other publications, the non-profit Center for IP Understanding was founded to address the uncertainty among audiences regarding patents, trademarks, copyrights and trade secrets — especially who do they benefit and their impact on new ideas and jobs.

“[The Centre’s] creation is in many ways a response to the battering that IP’s public image has taken over the last several years,” reported IAM blog, “particularly in the US. In that time a series of Supreme Court cipulogodecisions are widely seen to have undermined patent rights; the idea of efficient infringement has taken root; and the ‘patent troll’ narrative has gained wider traction in many parts the media.”

Outreach

Executives and advisors involved in CIPU on the board of directors or as informal advisors include Marshall Phelps (Microsoft, IBM, retired), Brian Hinman (Philips, active), Keith Bergelt (Open Invention Network, CEO), Harry Gwinnell (Cargill, Eastman Chemical, retired), and trade secret expert James Pooley (Orrick).

Also helpful in getting CIPU underway were Judge Paul Michel (Court of Appeals for the Federal Circuit, retire), David Kappos (Commissioner of the USPTO, retired) and film producer and author Irv Rappaport, former chief patent counsel at Apple and Medtronic, who has generated more than 20 patents, and Jonathan Taplin, a film producer, author and Director Emeritus of the Annenberg Innovation Lab a the University of Southern California’s Annenberg School for Communication and Journalism.

Among the CIPU’s goals for 2017 are a survey of IP awareness and attitudes among the general public and business owners; a research report on trends in media coverage of patent disputes; and a possible joint conference with Duke University on Innovation Policy.

The Center for IP Understanding also plans to provide outreach to educators, parents and business that help to facilitate better IP behavior.

Cultural Shift

“We have entered the ‘free-information’ era, where online content and patented inventions are readily pocketed by those who would never dream of shoplifting,” said Bruce Berman, CIPU Chairman, and CEO of Brody Berman Associates. “Products like music, books, novel designs, inventions and counterfeit goods appear to be there for the taking – or feel as if they should be. Uncertainty about what IP rights cover and their appropriate use compound the problem. CIPU will address these and other issues.”

“IP confusion is costly for consumers and businesses alike,” said Vice-Chairman Marshall Phelps, who is a member of the IP Hall of Fame. “Free-riders – unauthorized users of IP-protected products and works – come in many shapes and sizes. They impact performance and investment, as well as job creation. IP awareness and acceptable behaviors are too important to be left to audiences to decide on their own.”

For the IAM story go here.

For the Law 360 article go here.

For the full launch announcement go here.

For more information about the Center for IP Understanding, please visit www.UnderstandingIP.org. 

Image source: The Center for IP Understanding

InterDigital leads PIPX public IP stock index to a 44.9% gain for 2016

The PIPX public IP licensing company stock index soared to a 44.9% increase in 2016, led by an impressive 86.3% move for InterDigital.

With a market capital in excess of $3 billion, InterDigtal (IDCC) led the value weighted PIPX with another stellar performance.  Poor performers for the year included Neonode (-27.3%, NEON), ParkerVision (-20.0%, PRKR) and VirnetX (-14.4%, VHC), who made less of a dent in overall PIPX performance because of their lack of market value. The S&P 500 stock index for the year was up 9.5%, a significant portion in the 4Q following November’s presidential election.

“For Q4 the PIPX index was up 11.2% after a remarkable 20.4% in Q3,” noted Dr. Kevin Klein, Vice President and GM of Products and Licensing at VORAGO Technologies, who compiled the IP stock performance data for IP CloseUp. “Pendrell underwent a reverse 1:10 split during Q4, as have several other of the smaller companies in the index, another example of the their shrinking share price and market capitalization.”

percentage-change-2016-4q-figure-3-jpeg

The imminent departure of President Obama, an advocate of weaker patents, and the election of Donald Trump, a strong supporter of proprietary content and brand, also may have had something to do with strong 4Q performance for the PIPX.

Despite the over all gains for year and quarter, Marathon (MARA) and ParkerVision were down 38.8% and 56.3% respectively in the 4Q, and were up 7.5% and down 20.0% for the year. Litigation developments were likely influences.

For both the year and 4Q, performance for InterDigital Tessera (TSRA) and Acacia (ACTG) accounted for all the PIPX gain and offset some of the losses from the smaller component companies.

4q2016graph

“InterDigital, Tessera, and Rambus (RMBS) continue to drive the recent growth in the index and make up an ever-increasing share of the index,” stated Dr. Klein. “These three companies accounted for 37% of the total value of the index at the inception in 2011, today they make up over 80% of the total value of the index. InterDigital alone now accounts for over 40%, up from 15% at inception.”

Change in value of PIPX component companies 2011-2016

4q-figure-4-jpeg

 

Five Years of Data

After more than five full years of tracking, the PIPX seems to be suggesting that a handful of strong IP licensing companies are getting stronger and the weaker (smaller) ones are becoming more volatile.

For the full 2016 and 4Q PIPX report, go here.

 Image source: PIPX IP Stock Index

 

IP CloseUp visits were up 81% in 2016, breaking previous record

It was the second record-breaking year in a row for IP CloseUp readership, with 43,946 visits in 2016, an 81% increase from 24,273 in 2015. The previous record increase was 31% in 2015, up from 2014.

The most popular51yeitvgpal post was “Kearns’ son still fuming over wiper blade suit,” with 21,652 views. Other popular posts included “For Samsung charity begins at home, Marshall, TX,” coming in with 5,464.

The Kearns article, detailing his 12-year patent suit with Ford and other auto companies, has generated 31,081 hits since it was originally posted in 2011.

Renewed interest in the Kearns biopic detailing the inventor’s patent suit, “Flash of Genius,” starring Greg Kinnear and Alan Alda, likely stimulated interest in the topic, as well as new obstacles to patent licensing.

 

Image source: amazon.com; hippajournal.com

 

Inventor Kearns’ fight with Ford & other auto cos is 2016’s most read IP CloseUp post; 20,000+ visitors

An article summarizing inventor Robert Kearns’ epic battle against the automobile industry is this year’s most read IP CloseUp post with more than 21,000 visits.

The post summarizes the twelve-year patent suit mounted by Kearns, the inventor of the intermittent windshield wiper, against Ford and much of the automobile industry in the 1980s and 1990s, for stealing his invention.

“Kearns’ Son Still Fuming Over Wiper Blade Fight” generated 21,374 visits thus far in 2016, up from 6,928 in 2015. Total visits are over 30,000, which makes it the most read of almost 300 IPCU posts.

What about this story resonates with readers?

It could have something to do with the 2008 movie, Flash of Genius, that memorialized Kearns’ battle and depicted how it contributed to his mental breakdown and loss of his family.

Bittersweet Victory

Flash of Genius, starring Greg Kinnear as Robert Kearns and Alan Alda, as Gregory Lawson, his ambiguous attorney, opened to mixed but generally positive reviews (59% Tomato Meter; 55% Audience Score). It had a $20 million budget but grossed just $4.8 million at the box office. (Alda, of M*A*S*H fame, BTW, is a champion of understanding science 51yeitvgpaland innovation, and founded the Alan Alda Center for Communicating Science at Stony Brook University.)

The movie has many fans. I suspect that when it it is streamed or runs on a movie channel curious viewers run to Google hopeful of learning more about the enigmatic Kearns and his dispute with auto giants. It pitted him as David to their Goliath. (Thanksgiving weekend alone, which is prime movie-watching time, there were more than 1,500 visits to the post on IPCU.)

Even though Kearns eventually won significant awards, $10.2 million from Ford, and a total of $30 million from Chrysler, it is easy to believe that the struggle, which cost him his family and affected his sanity, may not have been worth it.

Apparently, no one thought so except Kearns, a college professor, former cryptographer in WWII and officer at a U.S. agency that was the forerunner of the CIA. (See the link to his obituary on the original IP CloseUp post, above.)

High Search Ranking

The Kearns’ post’s popularity probably also has something to do with its high Google search ranking under Kearns’ iconic name. It’s the second item after a rather tepid Wikipedia entry.

Supporters of the film include Peter Travers, long-time film critic for Rolling Stone. He gave it three out of four stars, saying “Kinnear takes the star spot in Flash of Genius and rides it to glory… Kearns wasn’t a movie hero. His halting courtroom delivery lacked Hollywood histrionics. Kinnear plays him with blunt honesty, sagging under the weight of stress but maintaining a bulldog tenacity that would win the day. Was the battle worth it? Kearns’ conflict is readable in Kinnear’s every word and gesture. His performance is worth cheering”.

Stephen Holden of The New York Times called the film “a meticulously constructed mechanism, one that wants to convey the same mixture of idealism, obsession and paranoia found in whistle-blower movies like Silkwood and The Insider,” thought it “has the tone and texture of a well-made but forgettable television movie”.

Lead actor Greg Kinnear, who in the lead role is more likable than Kearns was, won the Boston Film Festival Best Actor Award for his portrayal.

kearns-familyThe Kearns story strikes a chord deep in everyone. It is a quintessentially American tale of the forward-thinking little guy against diverse array of nay-sayers, his family included. Kearns’ sincerity as an engineer who craved recognition for his work more than his financial security is not lost on audiences, who see Flash of Genius, weaknesses aside, as an emotional and somewhat cautionary tale that is difficult to forget.

____________________

Whether it was ego, anger, greed, or a combination, that ultimately motivated Kearns to go as far as he did for as long, the inventor’s greatest accomplishment may not be the valuable device he created, which no doubt helped save lives, but his perseverance and drive to prove that it was stolen from him.

___________________

Whether or not Kearns was selfish or unbalanced, patent holders have benefited from his trail-blazing determination and refusal to take settlement money when he needed it most.

Stacked Deck

The environment for inventors and innovative small businesses today who wish to license their rights is not much different from when Kearns fought his epic battles. In fact, the obstacles may be worse.

With “efficient” patent infringement the preferred strategy of many the leading technology companies today, and higher validity and patentability hurdles established by the Patent Trial and Appeal board and the courts, the deck continues to be stacked against IP holders – even those with the capital, time and patent quality to succeed.

[Note: A company that employs “efficient” infringement believes that it is highly unlikely it will be caught using an invention it is not entitled to, and if it does, it is unlikely that it will have to pay much. For them, choosing not to take a license unless forced to by the courts is in their view a prudent business decision, ethics aside.]

Flash of Genius is available from Amazon, iTunes and other sources, to stream, rent or buy. Recently, it became available to Netflix subscribers for free. The official movie trailer can be seen here.

For those interested in the topic of Kearns and independent inventing, the long and thoughtful 1993 New Yorker magazine article by John Seabrook on which the movie is based is not to be missed. It is available for free by going here.

To read the original Kearns post on IP CloseUp, go here.

Image source: allesantiago.wordpress.com; amazon.com

 

Trump Jr.’s op-ed reveals a solid understanding of patent licensing

Donald J. Trump, Jr.’s editorial in the The Daily Caller in 2012, a conservative leaning publication that generates more than 16 million monthly visits, indicates that he has had significant experience with patents and disputes, and has a good understanding of the difference between legitimate IP holders and those attempting to game the system.

In Defending Innovatdonald-trump-jr-2ion in America,” young Mr. Trump berates tech companies that infringe software patents.

“What’s lost in the rush is that many of the software breakthroughs that underpin these apps were created years before the boom, when only a handful of companies could see the code’s revolutionary potential.

“Now, bigger companies are scrambling to catch up, and in their anxiousness they are missing or ignoring the origins of the fundamental components that make their apps possible. The violations can quickly spiral out of control, as companies race to copy each other without realizing that their competitor’s app is itself derived from software created by an original patent holder.

“Such runaway proliferation makes it even harder for small patent holders to keep their grip on the rights and returns they deserve.”

Not all Licensers are Trolls

There is a bit of confusion early in the piece as the young Mr. Trump attempts to separate patent abusers from businesses that wish to license truly innovative inventions.

Not everyone agrees that the company in question, MacroSolve, has the patent quality it claims to. TechCruch wrote that in 2014 in the company’s suit against self-described troll-killer Newegg, the company was forced to “fold like a cheap suit.”

Kudos for Recognizing

Kudos to the Donald Jr. for recognizing (in 2012) the difference between IP bulogo_200siness models and between good patents and bad – even if the system frequently does not.

In an article in The American Lawyer on December 13 it reported that “Peter Harter, a consultant and lobbyist on IP issues with The Farrington Group, has noted that Donald Trump Jr. and Trump’s national security adviser, Michael Flynn, have held positions with IP enforcement company Drone Aviation Holding Corp., formerly known as MacroSolve Inc.”

Drone Aviation Holding Corp. (DRNE) trades on the Other OTC exchange. Its website says that the company develops tethered drones and focuses on global agencies and organizations in the commercial, military, research and law enforcement sectors. Customers include the US Army, US Marines, US Navy, US EPA, NREL, Kingdom of Saudi Arabia, Ecuadorian Air Force, many US research universities and US law enforcement agencies.

DAHC is based is Jacksonville, FL. It’s website can be found here.

Image source: redchip.com; businessinsider.com

Gov’t study of economic impact of patent infringement is needed ASAP, experts say

There are abundant statistics on the cost of counterfeit goods, copyright infringement and even the negative impact of patent “trolls,” but nothing on the estimated extent of U.S. patent infringement and the cost in lost jobs, failed businesses and unpaid taxes. 

Global trade in counterfeits or fake goods, such as fashion, automobile parts and pharmaceuticals, has reached $600 billion annually, or about 5%-7% of GDP.  

The U.S. economy alone loses $58 billion each year to copyright infringement (2011 estimate) — crimes that affect creative works. That includes $16 billion in the loss of revenue to copyright owners and $3 billion in lost tax revenue.

The Recording Industry Association of America (RIAA) reports that the U.S. economy loses $12.5 billion in total output annually as a consequence of music theft and that sound recording piracy leads to the loss of 71,060 U.S. jobs, as well as losses in tax income.

Statistics on the cost of counterfeits and copyright infringement are conducted fairly regularly. There is even biased research on the cost of non-practicing entities. (Claims of $29 billion in damage from “trolls” are wildly inflammatory, says a former USPTO commissioner, which despite having been debunked are still cited by academics and reporters.)

Surprisingly, there are no estimates of the extent of patent infringement in the U.S., and the cost in lost jobs, failed businesses, unpaid taxes and other economic impact.

____________________

“There have been no studies that I am aware of devoted to quantifying the amount of patent infringement in the United States,” said Gene Quinn, patent attorney and publisher of IP Watchdog told IP CloseUp.

_________________

“”It would be extremely helpful to get some kind of quantification of the amount of harm that befalls innovators through the concerted and calculated ‘efficient’ infrdataingement business practices of those who use technology and simply refuse to pay for their ongoing, and frequently willful, patent infringement.”

Tip of the Iceberg?

Patent damages paid may be the tip of the infringement iceberg. The real damage may be below the waterline.

To provide some context, 15 leading technology companies paid patent litigation damages of more than $4 billion over as 12-year period from 1996-2008.

That’s just a little over a dozen companies who had to pay damages. The figure presumably does not include settlements, licenses, and all of the times they and thousands of other businesses paid nothing for the inventions that they used.

The Impact of Undetected Infringement 

  • Today, with more issued U.S. patents, and much greater difficulty securing a license or winning a patent law suit, the amount of patent infringement that actually takes place but remains unidentified could exceed a trillion dollars.
  • There is no known government, academic or privately commissioned study of the extent of patent infringement in the U.S., and the cost in lost jobs, failed businesses and economic loss.

_________________

“It is not enough just to be aware that there is harm caused by undetected patent infringement,” said Paul R. Michel, Chief Judge of the Court of Appeals for the Federal Circuit (ret.). “The government needs to conduct a proper empirical study ASAP to determine its scope and impact.”

___________________

 

Image source: ltrdigitalgroup.com

 

 

Attorney-investor is willing to share patent filing costs & risks with clients

Many law firms still seek to participate in the outcome of clients’ patent litigation, but few are willing to share the cost of obtaining and maintaining invention rights, which frequently turn out to be worthless. 

A new book by an innovative Colorado attorney and inventor suggests that patent lawyers need to have more skin in the prosecution game, and that filing patents just to have them is a waste of their client’s time and money.

Russ Krajec, author of Investing in Patents: Everything Startup Investors Need to Know About Patents, says that the high cost of obtaining, maintaining and defending patents is prohibitive for most young companies. But without patents they can undermine their future, the value of their enterprise, and the fate of their investors.

_______________________

Recent studies indicate that 30 percent of U.S. “unicorns” (start-ups with greater than $1B in valuation) have no patents and 62 percent have fewer than 10 patents.
(David Kappos, et al. the New York Law Journal)

________________________

In the January issue of IAM magazine, available this week, you will find my Intangible Investor review of Krajec’s deft book and industry-challenging strategy, “A strong case for a new approach to patent investing,” accessible to IAM subscribers, here.

Investing in Patents, deceptively spare at just 139-pages, is relevant to all patent filers, lawyers and investors, in addition to young companies, many of which are choosing to forgo patent protection. (See excerpt from The New York Law Journal article above.)

Patents are more expensive than ever, just over $56,000 for the average one over the course of its life. Defending them has reached new highs of cost and risk. A case through IPR(s) to trial can cost several million dollars and require more than five years, with a reduced likelihood of success.

Average Cost of a Patent Over its Life

patent-cost-pie-chart-v1-1

Engineer, Inventor, Financier

Investing in Patents is available at Krajec.com or on Amazon.com, here. In addition to being a patent attorney who has worked for H-P and other companies as a practicing engineer, Krajec has more than 40 patents to his name and, earlier in his career, was a USPTO patent examiner. He also runs BlueIron, LLC, an IP finance and management company.

While the sugg51l5ndgkvlestion of joint or fractional patent ownership is compelling, it is not entirely new or simple. As in most agreements, the devil is in the details.

It is unclear how Krajec believes ownership of a patent should be divided and who has the right to license, enforce, sell or otherwise leverage it – and when. Perhaps, most importantly, who gets to define success?

Given the current high-risk/low return scenario for obtaining and licensing patents most high-tech patents, this lawyer’s ownership alternative may be just what is needed to realign interests and enhance performance.

 

 

Image source: aipla.org; krajec.com

IP Dealmakers’ event Nov. 17-18 will focus on new opportunities; IP CloseUp readers can save $200

IP Dealmakers Forum is one of the more anticipated IP events of the year, especially for those engaged in patent licensing, sales, and M&A transactions. It also of signficant interest to investors. 

This year‘s event will feature a new track, Dealmaker Deep Dives, a shorter, more targeted discussions with experts taking an in-depth perspective on a specific set of issues. Each session includes extended time at the end for Q&A so the audience can really take advantage of the speakers’ expertise.

IP CloseUp readers go here for a promo code that provides a $200 discount.

ip-dealmakers-linkedin

Seizing Opportunities

“With the doom and gloom over patent licensing, the last couple of years we wanted to make sure the event was addressing the many new opportunities in the market,” said Forum director Wendy Chou, “In conversations with our board of advisers, past attendees and current IP holders, we were able to identify transaction areas that are being overlooked.”

Session titles include:

       – Seizing Opportunities to Invest in China’s Developing IP Market

       – Defining the IP Landscape in IoT: Strategy, Standards & Licensing

      – Trade Secrets — What IP Investors Need to Know

There also will be a panel on “efficient infringement,” a timely topic that grew out of attendee conversations during Q&A last year. The session is called:

Building a Better IP Market: Efficient Transactions vs. Efficient Infringement

  • A look at past attempts and business models
  • What does an efficient IP market look like?
  • Identifying challenges to progress

In terms of format, IP Dealmakers Forum (IPDF) has moved from all panel discussions to a mix of panels with patent holders, deal experts and investors taking an in-depth perspective. In 2016, as in past years, there is a strong lineup of speakers with a diverse mix of senior executives representing corporations, licensing companies, public and private market investors, law firms and other strategic advisors.

One-to-Ones

Face-to-face meetings continue to be a highly utilized aspect of the event, where attendees can schedule 30 minute sessions with one or more other attendees at any time during the event. A total of more than 425 meetings were scheduled over the past two IPDF, and the producers expect an even better response in 2016.

The IP Dealmakers Forum is organized by The IP Investment Institute, LLC and its partners Wendy Chou and Eric Salvarezza.

For the full IPDF agenda, go here.

To register, go here. There are still some remaining seats.

IP Marketplace

The IP Dealmakers Forum explores the challenges and opportunities in the changing IP marketplace. Lack of IP transaction data, information, and transparency pose serious challenges to market efficiency. However, they can create opportunities for investors who know how to leverage news, manage risks and connect with the right players.

IPDF attracts senior IP market participants from the finance, legal and business communities.

Image source: ipdealmakersforum.com

Can small businesses afford weaker U.S. patents?

Can businesses and entrepreneurs compete with weaker U.S. patents in an innovation-driven global economy?

An event featuring a broad range of IP thought-leaders on October 26 in Silicon Valley will attempt to find out.

“Entrepreneurship, Innovation and Patenting in the U.S. – Implications for the future of U.S. Competitiveness” is the topic of a presentation and networking session being held at H-P World Headquarters in Palo Alto on Wednesday October 26 at from 6:00 to 8:imgres30.

The event is open to the public and limited seating is available on a first come basis. There is a $40 charge to cover food and refreshments.

Speakers include Professor Carl J. Schramm, The Hon. Judge Randall Rader (Ret.) David J. Kappos, former USPTO Commissioner and former head of intellectual property at IBM, and Professor Adam Mossoff of George Mason University School of Law where he co-founded the Center for the Protection of Intellectual Property. Robert Aronoff is the organizer. The International IP Commercialization Center is the sponsor.

For the full list of speakers go here. To register go here.

Image source:iipcc.org

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