Posts Tagged: "patent portfolio"

Events along the prosecution process create multiple windows of opportunity for strengthening a portfolio. Decisions are based on indications of market adoption using evidence from specialized technical analysis and subject matter experts who examine products in the market that potentially use your teaching and proposed claims. There are four key factors to consider during the prosecution process that can identify strengthening opportunities

InterDigital will end up acquiring more than 21,000 global patent assets from Technicolor, more than doubling InterDigital’s current portfolio of 19,000 patent assets. This includes more than 2,500 Technicolor patents which cover video coding technologies… As part of this transaction, Technicolor and InterDigital will also enter into a perpetual grantback licensing agreement, which will give Technicolor freedom to operate its remaining businesses and benefit from existing and future patents.

International patent brokerage and Intellectual Property advisory firm Tangible IP is poised to announce that it has successfully brokered the sale of a patent portfolio of close to 150 patent assets previously owned by French Sovereign Patent fund (SPF) France Brevets. Financial details of the agreement will not be disclosed. A quick search on the U.S. patent database indicates that the buyer of these patent assets is Didi Chuxing, one of Uber’s major competitors in Chinese market.

Where is there currently value and opportunity in the patent industry? That is the question I asked a panel of experts recently. Not surprisingly, several of the experts who responded identified global markets as where opportunities currently exist, which is not surprising given the weakening of the U.S. patent system over recent years and a concerted effort by European and Chinese leaders to strengthen their respective patent regimes and marketplaces. Several others focus on opportunities that also exist for those companies that strategically view their patent portfolios and innovations as doorways to new markets as part of a growth strategy.

At first sight Amazon´s patent portfolio is indeed remarkable, with respect to its total value as well as its development over time: the total value of the company’s patent portfolio shows a strong over-proportional growth within the past six years. Starting 2010 with about 550 patent families and € 130m, the patents have reached a total value in September 2016 an impressive total sum of € 1,15b with 4,162 alive patent families. For a company being recognized as a retailer this is indeed remarkable and shows the trend of being more and more a high tech company. This can be seen within their strong increase of total patent portfolio value but also the technical analysis.

Your CEO: “Why are we spending so much on patents?” Your CFO: “Do we have a financial model for this spend?” The path forward isn’t clear. Now what? Using a model that examined both patent risk and expected risk reduction allowed the client’s IP department to put a number on the value of their efforts. In turn, this enabled the executive team to grasp the return on investment (ROI) from the patent strategy. Our client now had a tool to use for making decisions on how to mitigate patent risk and where to spend money to build their patent portfolio. The implications extend further into setting metrics and plan objectives to ensure that the patent strategy is on track.

Eventually Congress will recognize that all the changes enacted to address the overblown patent troll issue has resulted in far more damage to U.S. competitiveness. This revelation, unfortunately, will take time as the old patent troll narrative is still being cited on the Hill. In the interim, inventors and U.S. companies need to re-evaluate their IP protection strategy… Too often the reaction to losing portfolio value is to decrease investment in the portfolio. That is the wrong approach. More effort and investment need to be made to identify key assets, perform thorough prior art searches and draft applications/claims that can withstand an IPR petition. Keep a patent application family alive with very diverse claim strategies for these key assets.

When the corporate asserter arrived at our client’s door, the asserter wanted: (1) to obtain both a cross-license and revenue from a patent license and (2) to increase our client’s purchases of the asserter’s products. Our client had virtually no patents of its own. To shift the negotiation, the decision was made to purchase defensive patents (counter-assertion patents). The reasons were that invalidating the asserter’s 10,000+ patents would be expensive and would take too long. Also, putting revenue from the asserter’s products and services at risk would change the dynamic of the negotiations to our client’s benefit.

Patenting the distinctive technological features that drive demand for your products and services will make your patent portfolio more valuable by creating a link, or nexus, between your patent portfolio and your products. You can use this nexus to exploit your patents by preventing your competitors from including the most valuable features of your products in their own products without your permission; commanding a higher royalty if you license your patents; increasing your chances of getting an injunction if you need to enforce your patents;
increasing your damages base if you enforce your patents; and defending against an obviousness attack on your patents’ validity by showing that the patented features increased your market share.

We need to ask ourselves: what are the defining features of a “filler patent”? At least two things stand out. First, “filler patents” go through more rounds of prosecution than other patents. Secondly, the independent claims of “filler patents” are longer (have higher word counts) than other patents… A “round of prosecution” means an Office action from the USPTO and the applicant’s response. It is typical for “filler patents” to go through multiple rounds of prosecution, such as six or more rounds. At each round of prosecution, the claims are tailored, so that the scope of protection of the resulting patent is whittled down until essentially nothing is left. Then the application is allowed to issue.

The required number of patents in a given playbook varies based on both the size of company of concern and our exposure to it. The general goal of a playbook is to shift the licensing amount purportedly owed by LinkedIn by $20 million to $200 million in our favor. In order to achieve this, we have found that a good playbook should contain between three and 10 patent families, with evidence of use for key patents. The goal of each playbook is to show infringement by the asserter’s products and services exceeding $1 billion revenue. We set specific goals for each one and tested its contents against them.

In this post, we’ll analyze LinkedIn’s patent acquisition process and the results of its targeted buying program. While the increase in LinkedIn’s filings helped to grow the total patent portfolio, challenges remain. First, while organic filings tend to focus on LinkedIn’s core technology and therefore help a great deal with counter-assertion against potential competitors, they are less helpful when it comes to large corporate asserters further outside LinkedIn’s core technology area. Second, the priority dates on all the new filings are recent (after 2011). Earlier priority dates (old inventions) help the most in counter-assertion, but LinkedIn would have had to file for those patents in the 2000s. Fortunately, the market for buying and selling patents is robust and allows companies to fill in where they have weakness in their portfolios. Focused patent buying allowed us to build a counter-assertion portfolio to help bolster any negotiations.

LinkedIn was a rapidly growing company with only 22 patents in its portfolio in 2012, putting itself at high risk for patent assertion. With a revenue reaching nearly $1 billion and a growth of 86%, LinkedIn knew it had to develop a patent strategy to reduce its risk profile. So what was LinkedIn’s patent strategy and how did it increase its patent filings? Let’s start at the beginning… The opportunities for risk mitigation can be divided into two categories: increasing organic filings to address future assertion risk and patent acquisition to address present and near future risk.

Even though traditionally valuation professionals have used a combination of cost-based and market-based valuation, more and more practitioners are using income-based valuation in combination with market data.  The income-based model focuses on what potential monetization or potential impact on business a patent portfolio might have, and as such, it is much more dynamic and reliable… For patent portfolios of potential future value, technology risk is preferred over market risk and one could use current market data to benchmark future value while building an income-based valuation model.