Posts in Licensing

Conversation with Jay Walker and Jon Ellenthal, Part 2

Recently I had the opportunity to interview Jay Walker, the founder of Priceline.com. Walker, with over 700 patents and pending patent applications, is one of the most prolific living inventors in the world. He is embarking on the monumental task to commoditize patent licenses in a way that streamlines the process, keeps costs down, maximizes the number of licenses and charges a low flat fee. A daunting task no doubt, but his methodology is unique and seems to me to be more likely to succeed than any other efforts, which really bear no resemblance to the Patent Properties model. Still, to call the task difficult is an understatement, but if anyone has the ability to pull it off it would be Jay Walker.

A Conversation with Priceline.com Founder Jay Walker

Simply stated, Jay Walker is one of America’s best-known business inventors and entrepreneurs… Recently I had the opportunity to interview Walker, along with the CEO of Patent Properties Jon Ellenthal. While nothing was ruled out of bounds for the interview we spent much of our time discussing his attempt to create a no-fault patent licensing system that will help innovators monetize patents through a uniform licensing regime that offers a variety of peripheral benefits to those who take licenses… In this interview with Jay Walker we discuss his effort to monetize patents, patent trolls, patent reform and the importance of patents in general.

Fumbling Away The Future

Recently I visited a Congressional office with a friend who led technology transfer at a public institution located in a mid-level city not normally associated with innovation. By skillfully using the authorities of Bayh-Dole and the patent system combined with good business judgment the program was very successful in start up formation and licensing, making it a driver of the regional economy. The Congressional staff were effusive in their praise of the results, which are well known in the state, vowing to do everything they could to support continued success. However, just before the meeting my friend confided that their new leadership made it clear that they did not consider technology transfer a profession requiring special skills and experience. The staff that labored so long and hard building the program got the hint and was leaving. Luckily their achievement is recognized by other institutions that are happy to snap them up. Unfortunately, the economy of the area they left behind will pay a high price for this boneheaded mistake.

Universities are NOT Patent Trolls

Jane Muir, AUTM President: “[U]niversities are not the next patent troll because at the end of the day, university tech transfer offices were put into place to ensure that the new discoveries that happen in the research laboratories ultimately get out into the marketplace by way of product and services that improve the human condition. The big difference is with patent trolls. They’re not interested in commercializing discoveries. They’re interested in using those patents to sue legitimate companies who do want to move those products into the market. From the commercialization standpoint that really is the fundamental difference. Patent trolls have no real interest in commercializing. Their interest is in litigating.”

Leveraging Spin-Out Companies to Support Global Health

IDRI granted license rights to its world-class vaccine adjuvants to Immune Design Corporation (IDC), which was established in Seattle in 2008 with a focus on cancer, allergies and certain infectious diseases. The royalties and other funds received from IDC have helped to support IDRI’s programs, and IDC’s clinical safety data relating to the adjuvants have been vital in IDRI’s ability to accelerate the development of vaccines for tuberculosis and leishmaniasis, two diseases with an immense global health burden.

InterDigital’s Story: Fostering Industry Solutions and Profiting from its Growth

InterDigital CEO William Merritt writes: “It’s no secret that the regulatory environment is challenging for companies that license patents – in our case, patents that are deemed essential to wireless standards… One of the greatest frustrations for me is that so much of this rests on a bedrock of total miscomprehension of how standards are developed… I met with a reporter for one of the primary tech websites in the world, and he dismissed standards development. It became apparent he didn’t understand how the process worked at all… He didn’t realize that it was private sector companies – companies like ours – that committed significant engineering time and resources, and competed to develop the best solutions, and in so doing committed to licensing them fairly.”

Does University Patent Licensing Pay Off?

Patent licensing or creating new companies is not a get rich quick path for schools despite the occasional blockbuster invention or Google spin-out. Indeed, enriching universities is not the goal of the Bayh-Dole Act which spurred the rapid growth of TTO’s. Still, every state now sees its research universities as key parts of their economic development strategy shows that it’s not just the traditionally dominant R&D universities that are making significant contributions under Bayh-Dole… AUTM estimates the impact from sales of products based on licensed academic research in 2012 totaled $80 billion dollars – that’s double the entire federal investment in university research. Another study found that university patent licensing supported 3 million jobs between 1996-2010 (that’s an average of 200,000 jobs per year).

Choices for Inventors: Financial Arrangements

As any viewer of “Shark Tank” can attest, the variety of financial arrangements which are negotiated between inventor entrepreneurs and investors is broad. A final agreement is always the result of negotiation between the two parties. Unfortunately, many inventors go into the gunfight with a knife, so to speak, over-matched and under-prepared.

The Passing of a Legend: Remembering Howard W. Bremer

Unfortunately, I’ve known for a couple of weeks what this month’s column was likely to be about. After a brief illness, my friend Howard Bremer died last Friday… Working through WARF, Howard’s efforts were critical in our eventual success enacting Bayh-Dole despite long odds. Over the years, he remained a steadfast defender pushing back against the critics of the patent system… Howard attended the Association of University Technology Managers meeting this year—an organization he helped found in the 1970’s to foster the profession. Howard knew it was his last as he was not physically able to travel any longer. But there was no sadness; he enjoyed seeing many of his friends for what he knew was the final time…

Should I File a Patent Before Licensing the Invention?

Without a patent pending you also don’t have anything to license other than an idea that lacks tangible boundaries. While that is not always an impediment to moving forward, the further you can develop your idea the better. The more tangible the more valuable. So an idea is worth something to some people, but an idea that has taken more shape and is really an invention is worth even more. An invention that has been defined in a provisional patent application is worth more, and of course an issued patent takes away much of the risk and questions associated with whether your invention is new and unique. But now we are getting ahead of ourselves. The business of inventing needs to be considered a marathon — not a sprint. Take things one step at a time, proceed deliberately and invest little by little and only so long as it makes financial sense. That is why starting with a provisional patent application is frequently the best thing to do.

Patented Wake Board Made in America by Inventor Company

Licensing is relatively easy and potentially less risk financially and less time consuming, but licensing also has its negatives. So I went to Surf Expo with my wife to help us decide what to do… At the tradeshow, we found that the President of the Water Sports Industry Association loved our product, but he warned us that if we were to license this product into the existing market that what we would find was two-fold: one, they wouldn’t do it with the same heart, they wouldn’t have the same passion as the inventors and the team that created it and, two, they wouldn’t potentially invest the right amount of money into it and in some cases they may actually bury the product concept and prevent it from coming into the market, because they may see our product as competition to their market. It could have a potentially negative impact on say kneeboards. I was warned to stay away from licensing, in this particular case, and if we really wanted to see it grow, to go full-time into it. So I asked my two friends if they really wanted to take this on and I would be their mentor as they go through the process of beginning a company. So that took the stress off of me. I gave them equity in the new venture, which owned a full utility patent. They showed what they were made of and created a very successful business with a simple concept, “to help lots of people enjoy their time on the water!”

Contracts 101: Covenants, Representations and Warranties in IP License Agreements

Recently, it has struck me that many business folks who “negotiate tons of IP license agreements,” fail to understand the difference between covenants, representations and warranties that are “standard” in many such agreements. Well, that is not too surprising. What is very surprising, however, is that many of their lawyers also fail to appreciate the differences as well! Many think the terms are synonymous and thus use them interchangeably. They are not. So, for those of you tired of faking the funk, here is some (either fresh or refresher) “Contracts 101!”

DOJ Says IP Exchange Licensing Model is Pro-Innovation

IPXI is the first financial exchange that facilitates non-exclusive licensing and trading of intellectual property rights with market-based pricing and standardized terms. Earlier this week word came from the Intellectual Property Exchange International Inc. (IPXI) that the U.S. Department of Justice Antitrust Division issued its Business Review Letter (BRL) upon the culmination of its eight-month review. The DOJ believes that the IP Exchange business model proposed by IPXI is capable of producing market efficiencies in the patent licensing arena and is likely to be pro-innovation. Although no permission is required of the DOJ before IPXI opens its exchange, having this review of the DOJ Antitrust Division complete has to make IPXI and Exchange participants much more at ease as the move closer toward their attempt to revolutionize IP licensing.

Getting Your Innovation Story to Journalists Who Care

I spend a lot of time every day and my staff also spends time every day looking through press releases, looking for stories. And I can’t tell you how many times I have come across something that I knew was good but I couldn’t get any information on. I mean literally no information other than the self-congratulating, back slapping stuff that you see in two or three paragraphs in a press release. So that is one of the things I want to talk to you about today. How do you get your story to those journalists and reporters out there who care? Continually there are calls from detractors who want to change the technology transfer system regardless of how wildly successful it has been.

Supporting Proposed Rules on Disclosure of Real-Party-in-Interest

In the last five years, the patent market has undergone a change of seismic proportions. Patent rights are now regularly stripped from any underlying product and traded much like commodities in a largely unregulated market–the market for patent monetization. Regardless of what one thinks about the causes and implications of patent monetization, it is clear that this behavior is expanding at an explosive rate. In this rapidly shifting landscape, it will be critical for companies to be able to keep track, not only of simple ownership of patents, but also of actual control. With this new market for patent monetization, we currently have no way to accurately measure girth and no way to know what people are doing with the girth they have. This is why sunshine rules are so critical for grappling with the market and designing the rules that will ensure a competitive marketplace.