Posts in Licensing

Patents are a big capital investment for a startup company, but so is an office building. However, no startup company owns their office building outright. Even if they did own the building, they would take a mortgage on the building to free up capital. Exclusive licenses are the same thing as a lease agreement: the startup has full control of the assets, but does not have to spend capital to build or maintain the asset.

According to multiple reports, the Caltech patents-in-suit are incorporated into both the 802.11n and 802.11ac wireless connectivity standards, which are used by Apple products to communicate digital information. This latest patent infringement lawsuit is part of a growing trend where universities find themselves forced to file suit in U.S. district courts in order to protect their patent rights. They are forced to sue because those that infringe the patents refuse to take licenses on reasonable terms, they refuse to negotiate, and they refuse even to return calls. They choose to infringe with eyes wide open because they feel like they can. This is the face of what is called efficient infringement.

Though much of today’s proposed patent legislation is controversial, removal of the Brulotte rule remains largely uncontested by analysts and has historically garnered support on both sides of the political divide. Replacing the Brulotte rule with the rule of reason from antitrust law would improve market efficiency and spur innovation by increasing the dissemination of intellectual property in the marketplace. To unlock those benefits, Congress must modernize how Federal Courts evaluate post-expiration patent royalty cases.

A recent Barron’s editorial, however, has raised some eyebrows among those who are familiar with the effect of proper patent enforcement on financial fortunes. Published May 14th, “Patents Can Be Dangerous to Inventors’ Welfare” is a perfect example of how a rather odious point-of-view can be freshened and sweetened when some of the inconvenient truths are laid by the wayside.

Unlike other technologies (e.g. User interface) where the manufacturers have a choice to design around the technology of the patent, in case of SEPs, there is no possible way to avoid infringement and still comply with the standard. On the other hand, non-compliance with standard is a commercially non-viable option. This situation gives the SEPs holders a great leverage to assert their licensing terms. While there have been several cases and rulings in favor of SEP licensees that put some restrictions on the SEP holders regarding their FRAND licensing commitments as well as their abilities to exercise an injunction for infringement of SEPs, lack of clarity on FRAND terms still make the negotiations tough for a potential SEP licensee.

On May 12th, it was announced that Finjan had secured $10.2 million in a round of Series A investment financing in a private transaction involving both Halcyon Long Duration Recoveries Management and Soryn IP Group… The role that patents played in Finjan’s business activities was discussed heavily near the beginning of the conference call. Hartstein noted how Finjan had been successful in navigating changes to the patent landscape wrought by legislative, judicial and other changes, especially administrative changes at the U.S. Patent and Trademark Office. “These challenges are threatening a number of business models and we’ve recently seen several companies significantly pivot just to survive,” Hartstein said.

This post provides a practical approach for companies to handle the licensing of Intellectual Venture’s (IV’s) smaller in-house funds (ISF & IDF) during a negotiation with IV. These two smaller, in-house funds together represent approximately 20% of IV’s total portfolio. In a typical negotiation with IV, all of the patents in the IIFs (described below) are available for license without exclusions. But, the ISF and IDF patents are more restrictively licensed. Additionally, IV may have presented evidence of use (EOU) materials for assets in these funds, or otherwise highlighted, some of these assets during negotiations, further heightening the risks. For the two smaller funds, IV will provide a list of excluded assets. How can you cost-effectively assess these funds and the associated risks from these smaller funds?

How can a patent that is deemed essential for a standard not be infringed in a product that implements that standard? One possible explanation could be that the claim of essentiality is incorrect. That’s why it is important to document essentiality with a claim chart and ask an independent expert to verify that infringement of the patent claim is prescribed by the standard. But an independent verification is still no guarantee that court will agree that such a patent is really infringed by a product. Another explanation is that the patent is essential for an option in the standard and that the product does not implement this particular option. Most technical specifications of interface standards have options, describing alternative methods to implement the standard. Manufacturers can choose one of the options and will not infringe patents that are essential for implementing another option.

Industry self-regulation is the most efficient and least disruptive means for realizing the benefits of our patent system. It will bring greater certainty to IP-related transactions, and support collaboration to enhance the creation, development, and commercialization of new products and services. It will advance the Constitutional imperative of promoting the progress of the useful arts. By drawing upon the skills, insights, and resources of the diverse community of IP and business development experts, LES will ensure a fair and equitable system of standards that will benefit both society as a whole and the innovators who depend on that system.

Having an attorney draft a licensing agreement, or a licensing expert negotiate a licensing agreement, from start to finish is obviously the best way to proceed. But there will always be some who will choose to proceed on their own to negotiate a licensing and/or draft an agreement. This can certainly be dangerous, but sometimes there is no alternative given financial constraints. Whether you are going to represent yourself or work with an attorney or licensing professional, it is a worthwhile endeavor to engage in some strategic thinking, which absolutely must be the precursor to any memorialized deal.

Eagle Harbor Holdings (EHH) had amassed the second-largest portfolio of patents related to self-driving and autonomous cars, only trailing high tech developer Google in that field. Eagle Harbor was formed in 2010 by the father-son engineering team of Dan and Joe Preston. Their work in the field extends at least as far back as 1997, when they formed the vehicle tech development firm which became known as Airbiquity. EHH is now looking for prospective buyers for a portfolio with 74 total assets, including 42 patents issued and 17 patent families.

First, the definition of PAE used by the FTC characterizes all PAEs as the same. But in treating patent licensing firms as a homogenous category, the FTC fails to recognize there is a wide spectrum of business models that exist under the licensing umbrella. Second, and related to the first, there are serious methodological questions that undermine any conclusions that could be drawn from the FTC’s data.

I present ten scenarios for dealing with what is usually the most contested issue in pre-collaboration agreement negotiations – the ownership of foreground IP. These scenarios range from preferably avoiding joint IP ownership altogether to more complex situations involving joint IP ownership with both nonexclusive and exclusives licenses, as well as nonexclusive and exclusive cross-licenses, and even scenarios based on defining the parties’ respective fields of endeavor.

The report noted key areas of strength for the American IP environment, including effective trade secret protection, commitment to international treaties, mechanisms for pharmaceutical-related patent and generally appropriate boundaries set by courts on copyright exceptions. Along with narrowing patentability and weak enforcement against counterfeit products, key weaknesses for the U.S. included ambiguity regarding the obligations of Internet service providers (ISPs) to respond to trademark-holder notices of infringement and the need to speed up information sharing between rights holders and border agents to aid in the identification of infringing goods.

A well-developed patent portfolio offers you the ability to defend your R&D investments against competitors, creates freedom to move into new markets, deters corporate asserters and can eliminate licensing fees. How do you produce such a portfolio? Start by identifying potential threats, then balancing reasonable patent portfolio investment with revenue retention, and finally calculating your risks. This post presents an approach for modelling the value of a strategic patent portfolio for companies in the high-tech market (eg, cloud computing, semiconductors, mobile and networking). The biotech and chemical models are similar, but require modification for their specific patent risk challenges.