Tag Archives: Bank of America

BofA, JPMChase & Morgan Stanley are top banks for patent loans

Bank of America, JP Morgan Chase and Morgan Stanley are the currently leaders in patent-based lending, according to a recent update of a 2015 study.

Relecura, Inc., a California patent research and analysis company, reports that Bank of American had 60,093 transactions for a total market share of 16.87%. JP Morgan Chase had 45,304 transactions for a 12.72% market share. Morgan Stanley, which was number 11 on the 2015 list, came in at third in 2017 with 24,244 loans and 6.80% of all transactions.

The total number of transactions between 2011 to 2016 were 947,907, consisting of 356,287 applications.

Long History

There is along history of IP-backed bank financing. Businesses of all sizes and types have used it to raise money using patents, copyrights and trademarks as collateral. Distressed businesses tend to use it the most, perhaps when other sources of capital dry up.

In 2015, the key companies securing loans using patents include General Motors, Avago (now Broadcom Limited), Alcatel Lucent and Kodak.

JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, Wilmington Trust, and Deutsche Bank were the top banks doing IP backed financing deals. GE Capital also was an active lender.

Several governments have been major IP lenders, including the China Development Bank, which in 2014 pledged the equivalent of $1.3 billion USD agains a portfolio of 134 patent and 34 trademarks. Korea and Singapore have also been active IP lenders.

Most Active Borrowers

Key sectors doing the borrowing include software and hardware companies. Other active sectors employing IP backed financing include digital data processing, digital communication, IT methods for management, telecommunication, semiconductors, and television & video transmission.

An excellent infographic summary of bank lending on patents can be found, here.

For the full May 2015 presentation, go here.

Image source: Relecura, Inc.

Musicians want fairer streaming fees; inventors want patent licenses

In a digital world, fair compensation for creative expression or new ideas, like music and inventions, requires more determination than ever.

Intellectual property piracy has become an insidious problem, affecting a wide range of  individuals and industries, including recording and technology.

The effect of low payment – as opposed to no payment – has been particularly harsh on recording artists. They have had the challenge of policing the frequently unauthorized use of their work, getting their music taken down (and kept down), and being paid fairly by valuable streaming services who claim that they are not profitable.

Spotify, Pandora, YouTube and others have made it difficult for artists to permanently take down songs and videos that they are not being fairly paid for or that should not have been posted in the first place. While fans may enjoy the mostly free access, it has made it extremely difficult for less well-known artists to survive in the industry. For most of the big names, the possible loss in recording revenue can be made up in performances and merchandising.

Musicians: Update the Law

Napster was a turning point.  Shut down by court order in 2001 after just two years of operation, the online service enabled MP3 files to be easily shared. The recording industry and artists had little choice but to respond by surrendering preventing the digital distribution of their work or accepting the poor terms – if they were even offered. Streaming services legitimized file-sharing. It’s been more than a decade since Napster was shut down, and artists and labels are finally fighting back about the meager pay rates for their material. They are demanding, among other things, that the Digital Millennium Copyright Act (DMCA) a 1998 law, be updated.

They want to change the law so that music and video streaming services will be required to remove permanently material that they are not authorized to provide. It will be interesting to see if Congress complies.

YouTube claims that it has paid out over $3b in royalties, although that amount was initially attributed to all of Google, YouTube’s parent company. Bank of America values YouTube at $80b, more than all but 66 of the S&P 500 companies. (An article from Bloomberg News is worth reading, here.)

Don’t get me wrong. YouTube is a convenient, well-organized service that offers consumers an affordable alternative to network and cable TV and iTunes.  It claims to have paid some 15 million content providers. But the-1x-1 question is what amounts and to whom?

Angry Headliners, Too

In an article in the The New York Times, “Music World Bands Together Against YouTube, Seeking Change to Law,” it was reported that while YouTube is a vital platform for promoting song and discovering new talent, “it has never been a substantial source of revenue and is a vexing outlet for leaks and unauthorized materials.”

Now, even highly successful artists like Pharrell Williams, Katy Perry and Billy Joel have signed letters asking for United States copyright laws to be changed.

It is no accident that recording and visual artists face similar obstacles as other IP holders – notably inventors and patent holders. Since passage of the America Invents Act, it has been anything but easy for patent holders to stop the unauthorized use of their invention rights, or to get fairly paid for them.

Consumers are Complicit

“New services and platforms are great for consumers,” says Johathan Taplin, a music and film producer who has worked with Bob Dylan and Martin Scorsese, “but our weak laws have allowed them to siphon revenue away for the underlying music, leaving song-writers, performers and the he whole industry choking on their dust.”

Taplin is Director of the Annenberg Innovation Lab at the University of Southern California Annenberg School for Communication and Journalism. See Do you love music? Silicon Valley doesn’t.”

It Ain’t Over Until It’s Over

In 2015, after years of battling pirates, Prince, an innovator in controlling the distribution of his work, said in an interview that the Internet “was over for anyone who wants to get paid.”

Let’s hope that blatant disregard of the source of creative expression and new ideas will not continue unchallenged. For less well-known musicians and visual artists who depend on revenue from streaming and copyrighted songs as a means of survival the future may be a little less bleak. Young tech companies, inventors and universities, who are finding difficulty securing patent licenses have yet to turn the corner.

 

Image source: nytimes.com; bloomberg.com; BofA/Merrill Lynch Global Research

Fintech patent competition: fierce, diverse, growing

Among the most watched areas for new patent value is financial technology, covering inventions in areas like authentication, mobile payments and wealth management.

Fintech is among the few bright spots in the patent landscape, with leading banks like JP Morgan, Bank of American and Wells Fargo, and credit card companies like Visa, MasterCard and American Express deeply involved and competing with a broad range of new entrants, including:

• Traditional banking industry vendors such as Fiserve and IBM

• Scores of venture funded start-ups, some supported by former banking executives

• Established technology players such as Apple, Google and Amazon looking to capitalize on their   consumer recognition by expanding into banking and payments.

Close behind is leading Korean bank Shinhan and Bizmodeline Co., Ltd, a Korean company with a total of 2700 patents, 1000 patents related to Financial and Billing, 1400 patents related to Mobile, Ubiquitous, RFID and NFC, 300 patents related to authentication and other technologies. A host of Japanese companies, like HitachiToshiba, Sony and NEC, have become more active in identifying and developing inventions in the transaction space; Microsoft, too.

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“Start-ups, big tech and… banks,” in the current IAM magazine, The Intangible Investor, looks at the diverse competition in this space. (Subscribers can find the piece, which I wrote, here.)

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For more good background, “FinTech: An IP Perspective,” is a comprehensive report from IP research firm, Releclura. It outlines the players in the space and details the patents they have accumulated and in which areas of banking or transaction. The report can be found here.

A summary of the Relecura research compiled by IP consulting firm Aistemos, with charts and graphs, can be found here.

Execs Poised to Profit

According to The Financial Times, former banking executives are all over fintech startups, hoping for a big payout. See “Former Wall Street titans shake-up banking with fintech investments.” 

In the Wall Street Journal, “Banks and Fintech Firms’ Relationship Status: It’s Complicated,” discusses how disrupters and big lenders, often seen as rivals, are finding some success playing together.

Top holders

Fintech upstarts have attracted more than $50 billion in investments on the premise that they will disrupt banking and finance the way Uber or Airbnb have the taxi and hotel industries. But despite a decade of stumbling the banking industry has proven a tougher business to crack than some had thought. The American Banker speculates that the fintech sector may be overheating.

“’It’s too simple to say all these banks are stupid,’” says Qasar Younis, a partner at the Silicon Valley seed fund Y Combinator.

Like Big Pharma

The banks, much like some of the pharmaceutical companies, are smart enough to know that they will not be able to come up with all of the technology solutions they need to succeed, and that they have the capital, markets and regulatory savvy that others need.

For more information, Forbes’ top fintech stories for 2015, go here; their “Fintech 50” also provides a good overview of the up-and-comers, here.

Image source: americanbanker.com; CB Insights; Relecura 

 


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