Tag Archives: IAM

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

Pre-IPO Snap, with $25B valuation, paid $9M for 245 IBM patents

A soft market for patent licensing has not stopped the right patent portfolio from commanding a respectable price from the right buyer – at the right time.   

Snap, the corporate parent of Snapchat, reported recently in its S-1 pre-IPO filing that it had acquired a strategic patent portfolio from IBM, according to PatentVue, the data-focused IP blog.

In a well-researched post, PatentVue reports that approximately 245 of Snap’s 328 issued patents have been purchased from IBM.

“While the terms of its patent acquisition from IBM were not made ibmpublic,” says Maulin Shah, Managing Partner of Envision IP, “and with no mention of this patent transfer in the S-1, it appears that Snap may have paid roughly $9-10 million for the 245 patents and 207 pending US patent applications from IBM.

Excluding the patent applications, this means roughly $36-40k per patent.

Twitter acquired 945 patents from IBM in 2014 for a reported $36 million, in an effort to settle patent infringement claims brought against it by the technology giant. This comes out to approximately $38k per patent, again, excluding patent applications.

Similar Strategies

“Snap and Twitter’s patenting strategy at this point appear to be very similar,” concludes Shah, “with the vast majority of both portfolios predominately made up of acquired patents from IBM.”

The current IAM magazine features an article, “Big Blue’s new groove,” which examines IBM’s evolving patent strategy, and lists 34 patent and portfolio sales Big Blue has made between 2014 and 2016. Buyers include LinkedIn, Hulu, snap-ipo-riskRed Hat, Global Foundries and Lenovo. IAM subscribers can find the article here.

Snap, Snapchat’s parent, expects to raise approximately $3 billion from an initial public offering this spring. Despite a $25 billion valuation, Snap lost $514 million last year.

Facebook, Twitter, LinkedIn and others all sought patent portfolios before they went public, in part to justify their valuation, and perhaps because they had the cash to justify the instant leverage provided by a meaningful portfolio.

Today, patents’ more abstract M&A or financial transaction value can be more meaningful that its direct licensing or revenue-generating value.

The PatentVue post, can be found here. The blog’s original coverage of Snap’s mobile messaging patent acquisition, here.

Image source: computerweekly.com; techcrunch.com

Post-election “Patent Law & Policy” conference to be held in Washington

Many businesses are wondering what the patent terrain will look like after the U.S. elections in November.

Will further reforms will be forthcoming, or will there be a move toward stronger patents and greater certainty?

On November 15, the Tuesday following election day, at Washington DC’s Reagan Conference Center, those attending the 2016 Patent Law and Policy will be in a better position to find out.

Capitol Building in Washington DC USASpeakers assembled for this year’s IAM Patent Law and Policy conference will include senior government officials, members of the judiciary, corporate patent leaders, private practitioners and investors, who will discuss how court decisions and legislation are affecting US patent values and strategies.

The keynote speaker is US Patent and Trademark Office Director Michelle Lee. Other speakers include the chief judge of the Patent Trial and Appeal Board, David Ruschke, ex-USPTO Director David Kappos, and former Federal Circuit Chief Judge Paul Michel.

Also participating as speakers or panelists will be senior representatives from companies closely involved in the ongoing patent reform debate, including: GoogleQualcomm, Johnson & Johnson, Bristol-Myers Squibb and IBM. Lead counsel in two of the pivotal Supreme Court patent cases of the last decade, KSR v Teleflex and Cuozzo v Lee. Also present will be as several high-profile patent investors.

IP CloseUp readers are able to receive $100 off the $895 fee if they use the discount code PLAP100 (offer valid until October 7 2016).

For the complete program and speakers, go here. For registration go here.

Image source: ipo.org; ipwatchdog.com

 

 

Patent values are hit by uncertainty; operating co buying overtakes NPE

Three things are needed to succeed today in patent licensing: more capital, more patience and more good patents, which are in increasingly short supply. 

Uncertainty is the glue that binds weaker patents to cheaper ones.

Patent reliability is poorer than ever, in part because invalidating bad patents is now somewhat less arduous and costly. The courts are awarding fewer and lower damages awards, and defendants with time on their side and cash in their pockets, can play an even longer waiting game.

Increased uncertainty has encouraged more patent holders, mostly those operating companies that generate their inventions and rights internally, to consider purchases that they may not have previously. At “buyers’ market” prices, who can blame them? It will be interesting to see how uncertainty in the patent system will affect future R&D strategy and domestic patent filings.

With asking prices per asset trending down, and brokered patent sales lower, the percentage of packages sold is actually up significantly, as is opco buying.

The top buyers in 2015 Q1 according to Richardson Oliver Law Group, which tracks brokered patent transactions, were RPX, a Canadian numbered company, and Intellectual Ventures, for their Intellectual Investment Fund 3. These buyers accounted for 42% of all of the packages purchased in 2015 Q1 and RPX alone accounted for 28%. Other, much smaller buyers in Q1 include Apple and Philips.

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Listings are Down; Sold Packages Up

ROL indicates that patent deal listings (patent and application packages) are down 20% from 4Q 2014 to 1Q 2015, but that packages sold are up 88%. In an article in IAM earlier this year by ROL (see The brokered patent market 2014,), it was shown that corporate buyers have overtaken NPEs in 2013 and 2014, comprising 46% for the market versus 38% for NPEs.

Asking prices for US-issued patents monitored have fallen from $577,000 in 2012 to $360,000 in 2014, a fall of 37.6%. ROL’s latest broker sales stats can be found here.

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“Uncertainty rules,” my latest Intangible Investor, the July IAM Magazine looks at why confusion over new patent hurdles and lower damages awards is creating an opportunity for some companies to buy patents at lower prices and settle disputes more favorably. Subscribers can get it here.

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Don’t expect to see patent uncertainty to wane anytime soon.  Many operating companies and at least some NPEs will be sad to see it go.

 

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Image source: Richardson Oliver Law Group

IP Leaders to Regard “Tipping Point” at Global Business Congress

Opening Session will Focus on Critical IP Developments & Directions

More has happened to cast the spotlight on IP rights in the past 24 months than in the previous 50 years.

With new legislation being enacted, court decisions weakening patents, anti-patent rhetoric, Pirate Parties gaining momentum in Sweden and Germany, and transactions generating billions for sellers, it is difficult to know if IP rights are in fact facilitating innovation and commerce or impeding it.

The Tipping Point, the topic of the lead session on June 25 at this year’s Intellectual Property Business Congresss in Cascais, Portugal, near Lisbon, will attempt to sort things out.

Discussing and debating developments affecting IP rights will be the heads of the EPO, USPTO, LES, Thompson Reuters, the Office of Harmonization, and the Rockstar Consortium (consisting of among others, Apple, Microsoft, Ericsson and Sony).

Moderating the discussion will be your intrepid editor, Bruce Berman. I look forward to seeing many IP CloseUp readers there, as we did at last year’s IPBC in San Francisco. If you are in Cascais, be sure to stop by and say hello, and don’t be shy about asking questions at the session, which will open the Congress.

The Tipping Point will provide those who attend a good opportunity to query heads of important IP organizations about where they think IP is now and where it is headed, and how we can keep it on track. I will have some questions of my own.

The tipping point defined, BTW, “is the critical point in an evolving situation that leads to a new and irreversible development.”

Illustration source: patentdocs.org 

Perfect Storm is Set to Slam IP Rights, Holders

Everyone Will Take a Hit

Broad and largely unfounded disdain for intellectual property rights and holders has gone beyond bickering between operating companies and NPEs, or Hollywood (old economy) and Silicon Valley (new economy). It  is starting to have an impact on innovation and investment, and how stakeholders view intangible property, like music, software and new drugs.

The perfect IP storm is about to make landfall. Those already dubious about the use of patents and other rights see an opportunity to cut them down further. Inducing broad audiences to see IP as casually issued monopolies in the best interests of a few is getting easier and, worse still, somewhat fashionable.

Technology and business media are joining with political organisations, such as highly successful Pirate political parties in Germany and Sweden, some tech businesses, law makers and an increasing number of academicians to challenge IP. Disdain for patents and copyrights is not new. Its political correctness is.

Rights or privilege? 

Nurtured by half-truths about IP abusers locking out competitors and shaking down businesses, many people believe that intellectual assets impede innovation and represent privilege; they are akin to bank bailouts and inflated CEO compensation. Having been dealt stiff body blows by the courts and recent legislation, IP is on the ropes.

I would venture to say that many, including some OWSers, believe IP is simply 1%-type control masquerading in sheep’s clothing.

Of greater concern (to me, at least) than naysayers are IP managers and attorneys (executives and investors, too) who know better, but remain silent about how IP works and who it serves. What are you waiting for?

Read the full story, “The Imperfect Storm,”  in this month’s The Intangible Investor in IAM magazine.

Image source: http://www.iphonasia.com

Profs Say Patents Kill Innovation; Strategists Say They Frame It

The Great Patent Debate: A Session to Remember –

Those who attended the “The Great Debate” earlier this summer at the Intellectual Property Business Congress in San Francisco came away challenged and enlightened. A few, it would be accurate to report, were even startled.

For those who could not be there in person a video recording of the session is now available from IAM, the producers of the Congress. It also can be seen by clicking on the image below.

The session pitted Boston University and Berkeley Professors Michael Meurer and Peter Menell against 3LP Advisers consultants Ralph Eckardt and Mark Blaxill. Your humble correspondent had the honor of moderating and maintaining the Marquess of Queensbury Rules. (“No wrestling or hugging allowed.”)

It was a standing room only affair attended by more than 500. Even a broken pipe spraying water on dozens of audience members could not dampen the audiences desire to hear the firey pro and con. (The disruption is observable on the video.)

The net-net: Some experts believe that patents are damaging, even dangerous, and should not be treated like tangible assets such as real estate. Others believe that extracting value from IP rights like patents is a key to innovation and to competing successfully.

The session is worth seeing if you were not there or revisiting (without the umbrella) if you were.

Kill or Frame? — The Great Debate, San Francisco, 2011

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Video source: IP Business Congress

Innovative IP Models Generate Cash, Provide Alternatives

New Patent Businesses are Diverse and Well-Capitalized

A wider range of intelligent businesses are achieving higher returns on patents by extracting direct profits or providing defensive leverage.

The Patent Monetization Landscape below is a graphic illustration of these businesses developed by Brody Berman Associates in conjunction with the IP Investment Group at Coller Captial, a London-based private equity firm and one the of the leading independent patent holders.

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Size, Source and Strategy
The graph examines the relative size of these patent holders, whether they use their own patents or acquire them (or both), and how aggressive or defensive their strategy. A fuller exposition appears in The Intangible Investor, my column, running in the September IAM magazine.
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In this increasingly crowded and still evolving landscape few holders fit the same business mold, and only some can be considered outright “trolls.” The analysis shows that there are some entities that never sue, others that do so occasionally, and still others that are almost entirely about litigation.
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My hope is the Patent Monetization Landscape will serve as a springboard for further analysis of monetization strategies. (The graph is not drawn to exact scale and does not include life science companies or those whose primary income generation is through product sales.)
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As I explain in the upcoming Intangible Investor: “Operating companies are learning that they, too, can benefit from the [monetization] landscape as well as NPEs. Defraying costs associated with R&D, prosecution, PTO filings and litigation through a rights sale, purchase or partnership can provide valuable efficiencies and increase ROI, without necessarily increasing the risk of litigation or having to sue customers or vendors.”
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They also can help to secure the rights they need for sales and design freedom.
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A full-screen the Patent Monetization Landscape above can be achieved by clicking on the icon at the lower right of the slide.
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Image source: Brody Berman Associates


Wall Street to Patents: "We Love You, Man"

IP Cash is King Right Now –

JP Morgan analyst Paul Coster takes a long look at Acacia Research Corporation (NASDAQ: ACTG), a company that barely survived 2003 that Wall Street currently values at $1.5 billion. He generally likes what he sees.

My look at Coster’s 44-page report in the upcoming IAM magazine, out June 1, regards an equity analyst who specializes in computers and peripherals trying to get his arms around a nascent industry built on uncertainty, lumpy returns and unaccustomed to public scrutiny.

*     *     *

Wall Street’s love-hate relationship with IP rights is heating up. It remains to be seen whether this is an enduring marriage, momentary fixation or potentially dangerous obsession.

Is public ownership of patent licensing (or patent defense) an oxymoron? While they are unproven business models, there is good reason to believe that public patent companies will enjoy a symbiotic relationship with each other and can serve as an alternative to some high cost litigation.

For better or worse, some of the smartest underwriting money is bullish on the patent business.

By racking up a critical mass of patent settlements and some forward-looking licenses Acacia has caught the attention of mainstream investors. With the help of Barclays Capital (RPX co-underwriter), the company recently raised another $175 million in a stock offering. (Goldman Sachs and Allen & Co are other RPX backers.)

*     *     *

In an industry that prides itself on the ability to discount almost any type of risk, Wall Street currently finds IP-centric companies such as Microsoft and IBM interesting; those that license patent rights as their primary source of income it finds tantalizing.

The difference is in the financials, especially operating margins, which can be double or higher than those of the average S&P 500 company.

For the JP Morgan report on Acacia, click here. You will have to wait a few weeks for IAM 48 and The Intangible Investor column addressing public ownership of patent licensing.

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Acacia CEO Ryan to Speak to Investors

FYI: Acacia Research Corporation Chairman and CEO, Paul Ryan, will discuss the growth of Acacia’s patent licensing business at the JP Morgan 39th Annual Technology, Media and Telecom Conference being held at the Westin Copley Place in Boston. Ryan’s presentation will take place on Wednesday, May 18, 2011 at 9:20 AM (EDT). It will be webcast live at http://www.acaciaresearchgroup.com/events.htm.

Image source: zonebourse.com-Thomson Reuters

Reputation Counts for Patent Portfolios, Holders


Patent “Brands” are Serious Business –

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IP pros and stakeholders share an embarrassing secret: both are generally in the dark when it comes to how patents generate value and impact performance.

Owners of patent portfolios are discovering that reputation pays — especially when it comes to making performance understandable. The right IP message enables diverse audiences, such as shareholders, customers and employees, to have a handle on results without the excess baggage associated with legal rights.

While companies can and do conduct their IP business in the dark with little consequence, results that are conveyed strategically over time can turn a solid reputation into an iconic brand.

“An Image is Worth 10,000 Words,” my latest the Intangible Investor column in IAM magazine, takes a looks the role of brand equity in patent performance.

Patent Holder Survey

A global 500 IT company recently retained my firm, Brody Berman Associates, to explore which patent holders are seen as the leading players — the leading IP brands.  The client wanted to learn on what the responding IP executives based their conclusions. The client also was interested to discover (anonymously) how it ranked. The findings of the relatively small sample, while hardly definitive, shed light on how IP opinions are formed.

Businesses like IBM, Microsoft, Qualcomm and Philips were more highly regarded by survey respondents not only because IP rights play a role in their success, but because they remind various audiences they do so.

The survey take-away: A lack of information about a company’s patent performance relative to its industry is at best confusing and at worst damaging. The professionals’ take on a business’ patents and strategy, while often accurate, tended to be based more on impression than fact.

What constitutes a good IP reputation? It is really no different from what goes into any positive business profile: clarity, credibility, consistency — words that are more easily spoken than embodied.

*     *     *

For patent holders with good results (i.e. discernible IP “wins”), a modest level of transparency can pay impressive dividends.  Building a brand may not be for every patent holder, but it is for those with the patience and confidence to explain what they’ve achieved and why.

For more see the May-June the Intangible Investor.

Illustration source: http://www.flickr.com

Part II of Patent Performance Discussion is Out

Better Measures

The conclusion of my chat with Apple, IBM, Microsoft and H-P heads of IP business about how they measure success (the Intangible Investor 43), “Measures of Success, II,” is running in the Sept-Oct IAM. Below is the executive, executive summary:

Understanding patents starts with a business’ ability to identify needs, establish expectations and measure performance. It’s easier said than done, say three experts.

Berman: Many high-tech companies believe that improving their patent portfolio through acquisition, in-license or sale is like admitting defeat. This would seem counter to IAM best-practices?

[Irving] Rappaport [Apple, Medtronic, National Semiconductor]: That’s a very narrow view of ROI. If the acquired rights help the company’s overall business strategy, it should be seen as a win-win, particularly if it would take a long period of time for the company to develop its own rights in the acquired technologies. The terms of the deal also are important.

[Joe] Beyers [H-P]: Defeat may not be the proper term. It is more like “anger” that they now have to pay a third-party, perhaps, a competitor, to execute their business strategy. Compounding the problem is that this cost was likely not forecasted in the financial model/budget. Surprise expenses are the worst kind of costs to an operating company or division.

[Marshall] Phelps [IBM, Microsoft]: Forward-thinking companies don’t believe that in-licensing or patent acquisitions are weaknesses.

*     *     *

Companies have different IP needs at different points in their evolution. It’s nice for an operating company to say “No thank you. We have all of the IP we need.” But that level of self-sufficiency would be rare for most innovation dependent businesses, ever mindful of R&D costs, filing fees and litigation risk.

Image sources: baltimoresun.com, gottabemobile.com

The UK Drives IP Services

The British are Here!

The UK holds a unique position in intellectual property world, especially publishing and services. At least several of the top IP publications are British or British-owned. IAM(IP Media Group), Managing Intellectual Property (Euromoney Institutional Investor), IP Review (CPA Global), World IP Review (Newton Media) and Intellectual Property Magazine (Informa).

IP Law & Business, recently folded into Corporate Counsel, is owned by American Lawyer Media, which was acquired two years ago by British media and private equity firms and is now under the direction of the Royal Bank of Scotland (RBS). Jeremy Phillips’ seven plus blogs,IPKat and IP Finance among them, also originate in England. (Jeremy, BTW, founded MIP.) 

Additionally, the leading IP brokerage and transactions firm, ICAP OT, trades on the FITSE, and CPA Global, the leading IP renewals and administrative business, recently acquired in a management buy-out that valued it at $1.5b (USD), is located in Jersey (not New Joisey!). Anaqua, the top IAM software company that recently acquired SGA2, a French renewals business, was originally established in London and still has a key office there. There are other examples too numerous to cite.

English may be better equipped to observe and compute the world IP scene more effectively than Americans, who for the most part enjoy the best protections and reap the largest returns. The Brits are making it clear that there are many ways for many nations to participate in lucrative market for owning and understanding intellectual assets and the services that are required to maintain them.

In the 19th century gold miners relied on a variety of businesses to sell them picks, shovels and maps. In the early 20th century oil speculators needed drilling rigs and geological surveys. Digging for new ideas can be as daunting as mining for ore or drilling for crude.

Innovators and innovation managers need all of the help they can get. Apparently they are getting a lot of it from UK providers.

Illustration: EMI Canada

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