Matteo Sabattini is a Director of IP Policy for Ericsson. In addition to his duties with Ericsson, Sabattini also serves as Senior Vice President of Standards for the Licensing Executives Society (USA and Canada), is a Member of the Intellectual Property Committee of the IEEE-USA and is Technical Policy Coordinator for IEEE Region 2. Previously, Sabattini was the Chief Technology Officer for Sisvel Group and he also served as President and CEO of Sisvel technology. Sabattini holds an M.S. in Electrical Engineering from the University of Bologna, a Ph.D. in Communication Theory and Systems from the University of California, San Diego, and an MBA in Business Administration from The George Washington University. He has a broad expertise in intellectual property licensing and transactions.
Patent licensing and technology transfer are cornerstones of modern economies, where the efficiencies of collaboration and division of labor do not require firms to be vertically integrated. The Wright brothers did not build commercial aviation, and yet commercial aviation was born thanks to the Wright brothers’ invention. Similarly, a car manufacturer can simply rely on communication technologies developed by telecom experts outside the automotive ecosystem to guarantee connectivity to its fleet and the corresponding massive economic benefits. This short article focuses on how risk – in the economic and legal sense – changes over time, and what this implies for patent licensing dynamics. Licensing negotiations are not static snapshots in time, they often evolve and change according to developing circumstances, case law, parties’ conduct, and many other factors.
In recent years, several patent experts and commentators have claimed that there are too many “low-quality” patents being granted by patent offices around the world, or that a large percentage of patents are often found invalid by courts and judges. Until a patent is found to be invalid by a court or another tribunal, during licensing negotiations both licensor and licensee can only consider the likelihood that such patent is eventually found invalid based on the incomplete information available to them. Similarly, it has been claimed that a patent-by-patent analysis of a large patent portfolio could determine, without any uncertainty, whether a portfolio is infringed or standard essential. For example, several studies have been published or presented in courts that try to determine which patents in a portfolio are “truly” essential….. A better model, in the author’s opinion, is a probabilistic model that tries to estimate the likelihood of a portfolio to be infringed, valid and/or essential.
Never more than in this past year has reflection and introspection been important to cope with the isolation and stress brought by a raging pandemic. As I look back at World IP Day last year, I immediately recognize how much we have learned and evolved since the beginning of this aggressive and deadly disease. In little more than a year, the outlook is significantly more positive: vaccines are being rolled out in vast quantities, their effect in curbing infections and deaths starts to be recognized, the economy is showing signs of recovery, schools are reopening and there is finally more optimism.
Survival bias permeates today’s tech world, especially the Silicon Valley, in the celebration of failure as a sine qua non for success, almost as a virtue, a badge of honor. Praise, acclaim and visibility are given to companies that were started in a garage and are now multi-million-dollar public corporations. As if starting from a garage is some sort of a predictor of future success. Unfortunately, we often forget about the many more companies that started from a garage and are still in a garage, or do not exist anymore. The celebration of those “who made it” and how they made it (often praising their multiple failures) does not take into account those who failed and did not make it.
Today, for the 20th year in a row, we celebrate World IP Day. Today also marks the 80th birthday (after mine, another notable quarantine birthday) of a composer, songwriter, and record producer that has changed the history of music: Giorgio Moroder. Nicknamed the “Father of Disco”, he pioneered electronic music, produced numerous world hits – including some of Donna Summer’s major successes – and later composed film screenplays and scores (and won several awards for that work, including three Oscars). More recently, Moroder, a native of Ortisei, Italy, was honored with and contributed to a song named after him by the acclaimed EDM duo, Daft Punk. Similarly to Moroder, artists and creatives push the boundaries of ingenuity, create worlds for us to get lost in, imagine digital and analog alternative realities to soothe our senses and soul, and blur the lines between art, entertainment and technology. Innovators in all fields question the status quo and pursue a vision in creative art, technology, medicine, business, and all other areas of human knowledge. And while they do so, they touch many lives and, through their collective contribution, impact society as a whole. As our lives have been turned upside down by the COVID-19 pandemic, we recognize more than ever that investing in creativity, in innovation, and in the visionaries has allowed us as a society to cope and fight back with unprecedented tools.
The recent public discourse is purposely blurring the line between NPEs and trolls. Research labs and universities are all NPEs. But it would be not only incorrect but also ultimately ethically wrong to classify these entities as trolls. In fact, by taking away their right to technology monetization, we might undercut their ability to further investments in innovation, yet creating a vicious cycle. Ultimately, all companies – practicing or non-practicing – do R&D in areas where they will never bring a product to the market, and act as NPEs in specific market segments. Innovation requires multiple actors, including individual inventors. In times when R&D dollars are scarce, aggregators and patent licensing firms generate more resources to fuel innovation.