Tag Archives: Seeking Alpha

Responsible Patent Licensing is Focus of NY Financial Conference

Executives of top patent holders will participate in “NPE 2015: The Business of Responsible Licensing” to be held in NYC’s financial district on March 12. There are still some audiences that believe that NPE, or non-practicing entity, is just another term for patent “troll.” To them patent holders who wish to license their inventions but do not sell products are suspect. More suspicious are companies that refuse to recognize that there are vast differences in the quality of asserted patents and the business that own them. NPE 2015: The Business of Responsible licensing will examine those differences and ways to combat misconceptions among patent holders. The conference will attract both non-practicing and practicing patent holders of all sizes, as well as investors, law firms, and law makers. NPE 2015, which will 6a00d83452408569e2010534bb9b53970b-800wibe held in NY’s financial district at the Convene conference center, steps from the stock exchange, is being produced by IP publishing and conference leader IAM, which produces the Global and Asian IP Business Congress. Businesses that engage in responsible patent licensing, that deploy quality rights for a market return, differ significantly from “trolls” who undermine the patent system by relying of the high cost of litigation to force a quick settlement. Recent legislation has done much to eliminate that strategy. Increased Scrutiny “Non-practising entities (NPEs) are facing greater scrutiny than ever before – be it from the media, US Congress, regulatory authorities or the courts – with much of that attention casting them, and large parts of the patent market, in a negative light,” writes conference organizer Richard Lloyd. “But at the same time, many NPEs’ business models are proving successful. A growing band of public IP companies (PIPCOs) have attracted new investors to the sector. The licensing strategies of many NPEs have never been more sophisticated, with several emphasising a shift away from litigation. And the growing confidence in the sector can be seen in several businesses committing themselves to best practices and playing an active role as the licensing sector considers adopting industry-wide standards.” IP thought-leaders who will be present at the conference include John Lindren, CEO of Conversant, which has taken a leadership role promoting best practices for patent licensing, Hon. Randall R. Rader, former Chief Judge of the Court of Appeals for the Federal Circuit, and David Kappos, former USPTO Commissioner. A full list of speakers can be found here. “The days of asserting questionable patents to secure early settlements from defendants are all but over,” said Gerald Holtzman, President of Personalized Media Communications, an inventor-owned company,3J6A3349 who will participate on a panel in New York on March 12. “Still, there are those who would prefer patents be even weaker to further their agenda. America needs strong patents and a viable system to nurture innovation, encourage commerce and provide jobs.” “Being able to distinguish clearly between good patents and legitimate holders is an essential part of the equation.” Persons interested in attending, NPE 2015 can register here. Image source: wf360.typepad.com/; convene.com

A Few IP Stocks Shined in 2014; Most Declined, Some Significantly

Size helped in 2014 when it came to public IP licensing company stock performance, but it did not assure success.

As a group, the twelve companies in the PIPX Public IP Performance Index out-paced the S&P 500 for the 4Q 2014 9.1% to 4.4%, with Neonode, Tessera and InterDigital leading the way, all with 4Q gains in excess of 30%.  Marathon, under $100M in market cap for most of 2014 and not represented on the graph below, was up 17% for the quarter and 167% for the year.

2014PIPX4QFor the year 2014, however, companies in the index fare much worse, with PIPX companies generating a collective return of just 4.3% vs. 11.4% for the S&P 500. Tessera and InterDigital were notable performers each with 40% returns for the year. Rambus and Acacia were up about 17% each.

Eight of the twelve companies in the PIPX, which is provided to IP CloseUp by Dr. Kevin Klein of Freescale Semiconductor, were down, led by ParkerVision, VirnetX and Vringo. RPX was down 18.5% for the year and WiLAN 11.3%.

The PIPX is weighted by value or market capitalization, so poor performance by smaller companies has less of an overall impact on index performance.2014PIPXyr

Conclusions? 

It is difficult to draw too many conclusions from this, the first year of the PIPX. Investors tended to reward higher value stocks, but size was not a guarantee of performance, with RPX and others down against both the index and S&P 500.

It’s important to recognize that despite uncharacteristic pressure on patent values due to legislative reform and judicial decisions, good assets have continued to hold value. With the recent Rockstar settlements and sale of 4,000 patents to RPX, we could be at or near the pricing bottom, depending on the nature of 2015 patent reform.

A few small stocks bucked the trend, notably Marathon (MARA), which was not on the PIPX list because it was under $100M in market cap for most of the year. It is now at $110M and is being added. MARA ended the year up 167%. I’m pleased to say that Brody Berman Associates, my firm, helped to develop with the company’s early messaging.

Other companies not in the index performed poorly and their results can be readily tracked on he IP CloseUp 30 found here. (Paste the URL onto you home screen or desktop for easy, real-time monitoring of the public IP sector.)

Image source: Freescale Semiconductor


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