Posts Tagged: "patent portfolios"

To keep pace with competitors, businesses must constantly monitor, adjust, and streamline their patent portfolios. Doing so ensures that portfolios deliver the maximum potential return on investment by staying aligned with corporate goals, industry and technology developments, and growth areas across industries and businesses. This process requires managers to adjust the makeup their portfolios to maintain effective coverage in specific areas and eliminate or reduce low-value patents to minimize maintenance… There are four goals that can be achieved through portfolio audits: streamlining portfolios; ensuring portfolios are well-positioned, positioning portfolios for optimal monetization, and ensuring the portfolio provides sufficient coverage without excess. Portfolio audits may help identify strengths and gaps.

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.

Patent monetization has become nearly impossible for middle-market technology companies without engaging in some level of legal action. Management teams have consequently shied away from pursuing licensing opportunities, even when the revenue potential of a company’s intellectual property is compelling. While traditional debt and equity investors have an aversion to patent monetization stories, there are specialized investors willing to underwrite capital raises aimed at financing licensing revenue initiatives. By structuring these financings in a way that isolates monetization risk to the patent investor, companies can pursue licensing initiatives that have the potential to generate significant residual value for all stakeholders in the capital stack. In addition to capital, patent investors bring monetization expertise that can play a critical role in the success of a licensing revenue strategy… In many contexts, licensing revenues will only persist so long as the underlying patents remain valid. Increasingly, however, licensees and strategic third parties seek to invalidate patents in Inter Partes Review, rather than continue to pay or renew patent licenses. The uncertainty of future revenue streams further justifies financing structures that ameliorate such risk.

The Supreme Court has agreed to hear a petition for Certiorari in Oil States Energy Services v. Greene’s Energy Group, which will result in the Court addressing the constitutionality of post grant proceedings… The impact of the resulting decision in this case may affect patent dispute outcomes not just moving forward, but possibly spanning 5 years into the past… At a (very) high level, there are three possible outcomes arising from the Supreme Court decision that is expected in 2018 that will impact the IPR process: no change, some change, major change.

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.

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.

When it comes to making strategic patent portfolio decisions, it is more important than ever to be informed, thorough and discriminating with your decision-making. In short, the number of strategic decisions available to those obtaining and maintaining a portfolio are greater than ever and, in fact, have only continued to explode in number. So many strategic decisions to consider throughout the innovation lifecycle, where should you start? Join me, Carlo Cotrone (GE Oil & Gas) and Edmund White (CPA Global) for a free webinar on Thursday, June 1 at 2PM ET.

When it comes to making patent portfolio decisions, it’s important to be strategic. But with so many strategic decisions to consider throughout the innovation lifecycle, where should you start? Join Gene Quinn, patent attorney and founder of IPWatchdog.com, and a panel of experts for a free webinar on Thursday, June 1 at 2PM ET.

While many, if not most, enterprises have instituted, and are executing, an IP strategy of some sort, an important question should be considered: Is the IP strategy optimal, such that its execution extracts maximum value from company technology? Some corporate IP strategies may seem sound in theory, but in practice they are (a) selectively or inconsistently applied within or across projects, (b) incompatible with how teams actually work, (c) relatively narrow in how they perceive innovation, and (d) distracting to innovators and IP practitioners while consuming enormous resources. Ultimately, the return on IP investment of such strategies may be questionable. However, enterprises that periodically take a step back to reflect on their current IP strategies, and recalibrate them if appropriate, are likely to derive the greatest possible value from IP.