LES Silicon Valley Webinar "Funding IP Enforcement to Support Licensing and Monetization"

The Silicon Valley Chapter of the Licensing Executives Society [LES] is hosting a webinar titled, “Funding IP Enforcement to Support Licensing and Monetization” on February 24 from noon to 1:30 pm [Pacific Standard Time].  Here are details concerning the event:

Program:
The LES Silicon Valley Chapter is pleased to present this webinar in which leading experts will provide insight into the funding of IP enforcement to support licensing and monetization. Whether you're trying to protect a product, license your IP or monetize, chances are that expensive litigation will be required.

The webinar will explore the various aspects of financing the litigation process, including:

• Realities of doing licensing without litigation
• Financing litigation from the point of view of funders and companies/attorneys seeking funding
• How litigation funding may influence royalty rates or asset valuation
• Examine various options that are available
• What kind of cases are most suitable for financing
• Typical deal structures
• Details of the process and how long it takes
• U.S./Non-U.S. IP assets
• Other important considerations/lessons learned

Panel:
Michael Gulliford, Founder/Managing Principal, Soryn IP Capital Management, LLC
Phil Hartstein, President and CEO, Finjan Holdings, Inc.
Jeremy Pitcock, Founder, The Pitcock Law Group
Ron Vaisbort, General Counsel & Corporate Secretary, Ivalua
Moderator: Dave Stevens, Stevens Law Group

​Panel Bios:
Michael Gulliford, Founder/Managing Principal, Soryn IP Capital Management, LLC
Michael is the Founder of the patent advisory firm Soryn IP Group, as well as its sister company Soryn Capital, which invests significant capital in a host of patent-centric opportunities.  Prior to founding Soryn, Michael was a partner in the IP Litigation group of Kirkland & Ellis LLP.  At Soryn, he is a trusted advisor and investor to a number of the world’s most prestigious universities, law firms, companies and inventors.  He guides the management of private and publicly traded companies with respect to patent strategy, and has been the name behind almost two hundred million dollars in patent related deals.  Michael has also repeatedly been recognized as one of the Leading IP Strategists in the World.

Phil Hartstein, President and CEO, Finjan Holdings, Inc.
Phil is President and Chief Executive Officer of Finjan Holdings, Inc. and oversees the direction and management of current assets and future investments as well as working with the company’s executive management team to execute the shareholders vision as a public technology company.  Phil has worked in a number of technology and intellectual property related roles for over a decade. He started with a boutique IP law firm, worked in an in-house IP function for a VC funded startup, spent time in IP consulting and IP brokerage firms, and prior to joining Finjan spent four years with two groups focused on bringing both private and public market capital, expertise, and credibility in licensing and enforcing patent rights on behalf of owners.

Jeremy Pitcock, Founder, The Pitcock Law Group
Jeremy's current practice involves counseling clients in all areas of intellectual property, with a particular emphasis on patent litigation.  He serves as lead counsel on a variety of patent matters, and has been involved in all aspects of trial and appellate practice before federal courts throughout the country.  He has successfully argued all phases of litigation including at trial and at various summary judgment and Markman hearings, in diverse fields such as, Internet and mobile technology, authentication and encryption, fiber optic networks and various optical components, network and microprocessor architecture, computer software, Ethernet routing and communications, semiconductor manufacturing and fabrication, pharmaceutical inventions and business methods. Jeremy Pitcock also has served as lead counsel in copyright (including computer-related matters), trademark and trade secret litigation.

Ron Vaisbort, General Counsel & Corporate Secretary, Ivalua
Ron is a serial general counsel to world-class software and services companies. Prior to Ivalua, Ron served as the chief legal officer to MemSQL, C3.ai, Good Technology and Trillium Digital Systems. A veteran of the technology, media, and entertainment industries, Ron has been at the forefront of numerous innovative business concepts -  as both an attorney and business leader for startups as well as Fortune 100 companies such as Intel and Toshiba. Ron’s expertise is building and leading global legal and business development teams, and spans IPO/M&A readiness, international IP creation, data privacy and protection, commercialization strategy, licensing, and technology alliances.

Moderator: Dave Stevens, Stevens Law Group
Dave’s IP practice includes patent prosecution, transactions, due diligence work, agreements, opinions (including validity, infringement, patentability, right-to-practice (RTP), and freedom-to-operate (FTO) opinions), counseling, offensive and defensive patent issues, licensing, and litigation.  The technical focus of his practice includes electronics, computer technology, automotive technology, communications, optical systems, green technologies, software, semiconductors, and mechanical devices.  He also serves as an expert witness in technical and intellectual property legal issues and has been called as a fact witness in enforcement actions involving the many patents he has written. He also is an expert in copyright (including software, publications, products and artworks, and other copyrightable forms) and open source issues. He works with foreign IP firms and foreign clients with respect to domestic and international patent prosecution, including Patent Cooperation Treaty (PCT) work.

Here is the link to register: Licensing Executives Society (LES) (lesusacanada.org).  The cost for non-LES members is $69.

U.S. Office of Special Counsel finds Misuse of Funding for Vaccine and Emergency Preparedness

The U.S. Office of Special Counsel has found that the U.S. Department of Health and Human Services has misused funding allocated for vaccine preparation and emergency preparedness over the course of many years.  The funding was intended for use by the Biomedical Advanced Research and Development Authority (BARDA).  The press release notes that some apparently referred to the “Bank of BARDA.”  The press release of the Special Counsel states:

The U.S. Office of Special Counsel (OSC) today sent letters to the President and Congress alerting them that, over the last decade, the U.S. Department of Health and Human Services (HHS) misappropriated millions of dollars Congress intended to fund vaccine research and emergency preparedness for public health threats like Ebola, Zika, and COVID-19. A whistleblower alerted OSC to the misuse of funds appropriated to the Biomedical Advanced Research and Development Authority (BARDA) within HHS. OSC referred the allegations for investigation by the agency, which was conducted by HHS's Office of Inspector General (OIG). The investigation substantiated many of the allegations, finding that since at least fiscal year (FY) 2010, the Office of Assistant Secretary for Preparedness and Response (ASPR) misused funds appropriated for BARDA and failed to accurately report this mismanagement to Congress.   

The report contains evidence that ASPR used BARDA's research funds to pay for myriad unrelated expenses, including the removal of office furniture, administrative expenses, news subscriptions, legal services, and the salaries of personnel who did not work for BARDA. The report reveals that the practice of using BARDA funds for non-BARDA purposes was so common, there was even a name for it within the agency: “Bank of BARDA." HHS OIG determined that ASPR had “violated the Purpose Statute" and “potentially violated the Antideficiency Act."

While the report does not contain a specific estimate for total funds misappropriated, it contains evidence that as recently as FY 2019, approximately $25 million was taken from BARDA's Advanced Research and Development (ARD) programs and improperly provided to ASPR. Moreover, from FY 2007 to 2016, ASPR's reporting to Congress failed to account for $517.8 million in administrative expenditures. The report found that “ASPR is unable to demonstrate that the[se] BARDA funds were used for their appropriated purposes."

In response to the findings, HHS's Assistant Secretary for Financial Resources and Office of General Counsel have initiated an internal review of the agency's use of ARD funding for FY 2015 through 2019 to identify potential Antideficiency Act violations. The agency has also hired an outside accounting firm to audit the agency's use of ARD funding, both of which are estimated to be completed by the summer of 2021.

“I am deeply concerned about ASPR's apparent misuse of millions of dollars in funding meant for public health emergencies like the one our country is currently facing with the COVID-19 pandemic," said Special Counsel Henry J. Kerner. “Equally concerning is how widespread and well-known this practice appeared to be for nearly a decade, even garnering the nickname 'Bank of BARDA.' I urge Congress and HHS to take immediate actions to ensure funding for public health emergencies can no longer be used as a slush-fund for unrelated expenses."

Senator Klobuchar Introduces Legislation to Strengthen Antitrust Enforcement in United States

Former Democrat Presidential Candidate and current Senator from Minnesota, Amy Klobuchar is the new chair of the antitrust subcommittee in the U.S. Senate.  She recently introduced new legislation designed to reign in technology companies and increase competition through antitrust law.  The Press Release from her office states:

WASHINGTON – U.S. Senator Amy Klobuchar (D-MN), the lead Democrat on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, introduced sweeping new legislation today to reinvigorate America’s antitrust laws and restore competition to American markets. The Competition and Antitrust Law Enforcement Reform Act will give federal enforcers the resources they need to do their jobs, strengthen prohibitions on anticompetitive conduct and mergers, and make additional reforms to improve enforcement.

“Competition and effective antitrust enforcement are critical to protecting workers and consumers, spurring innovation, and promoting economic equity. While the United States once had some of the most effective antitrust laws in the world, our economy today faces a massive competition problem. We can no longer sweep this issue under the rug and hope our existing laws are adequate,” said Senator Klobuchar. “The Competition and Antitrust Law Enforcement Reform Act is the first step to overhauling and modernizing our laws so we can effectively promote competition and protect American consumers.”

This bill is cosponsored by Judiciary Subcommittee on Antitrust and Commerce Committee members Richard Blumenthal (D-CT), Cory Booker (D-NJ), Ed Markey (D-MA), and Brian Schatz (D-HI).

Many industries are consolidating as large mergers and acquisitions increase and big companies buy out upstart rivals before they can become a competitive threat. Harmful exclusionary practices by dominant companies – such as refusals to deal with rivals, restrictive contracting, and predatory pricing – squelch competition. U.S. antitrust law enforcement against powerful firms has lagged efforts in other developed countries, particularly when it comes to enforcement against the dominant digital platforms and other large corporations. To remedy these longstanding issues, the Competition and Antitrust Law Enforcement Reform Act will:

1. Increase Enforcement Resources

For years, enforcement budgets at the Justice Department’s Antitrust Division and Federal Trade Commission have failed to keep pace with the growth of the economy, the steady increase in merger filings, and increasing demands on the agency's resources. To enable the agencies to fulfill their missions and protect competition by bringing enforcement actions against the richest, most sophisticated companies in the world, this bill would authorize increases to each agency’s annual budget.

2. Strengthen Prohibitions Against Anticompetitive Mergers

The bill would restore the original intent of Section 7 of the Clayton Act, which was designed to stop anticompetitive mergers in order to address competitive problems in their “incipiency” before they ripened and caused harm. As the law stands today due to court decisions, enforcers can block only the most egregious acquisitions, which has allowed many harmful mergers to escape scrutiny. To remedy this, the Competition and Antitrust Law Enforcement Reform Act will:

• Update the legal standard for permissible mergers. The bill amends the Clayton Act to forbid mergers that “create an appreciable risk of materially lessening competition” rather than mergers that “substantially lessen competition,” where “materially” is defined as “more than a de minimus amount.” By adding a risk-based standard and clarifying the amount of likely harm the government must prove, enforcers can more effectively stop anticompetitive mergers that currently slip through the cracks. The bill also clarifies that mergers that create a monopsony (the power to unfairly lower the prices a company it pays or wages it offers because of lack of competition among buyers or employers) violate the statute.
• Shift the burden to the merging parties to prove their merger will not violate the law. Certain categories of mergers pose significant risks to competition, but are still difficult and costly for the government to challenge in court. For those types of mergers, the bill shifts the legal burden from the government to the merging companies, which would have to prove that their mergers do not create an appreciable risk of materially lessening competition or tend to create a monopoly or monopsony. These categories include:

1.       Mergers that significantly increase market concentration

2.       Acquisitions of competitors or nascent competitors by a dominant firm (defined a 50% market share or possession of significant market power)

3.       Mega-mergers valued at more than $5 billion

3. Prevent Harmful Dominant Firm Conduct

Decades of flawed court decisions have weakened the effectiveness of Section 2 of the Sherman Antitrust Act to prevent anticompetitive conduct by dominant companies. The bill creates a new provision under the Clayton Act to prohibit “exclusionary conduct” (conduct that materially disadvantages competitors or limits their opportunity to compete) that presents an “appreciable risk of harming competition.”

4. The legislation would establish a new, independent FTC division to conduct market studies and merger retrospectives.

5. Implement Additional Reforms to Enhance Antitrust Enforcement

The Competition and Antitrust Law Enforcement Reform Act will also implement a series of reforms to seek civil fines for antitrust violations, study the effect of past mergers, strengthen whistleblower protections, and more.

“This bill will turbocharge antitrust enforcement,” said Charlotte Slaiman, Competition Policy Director at Public Knowledge. “Much-needed updates to the Clayton Act’s merger review and exclusionary conduct provisions, along with a new office at the Federal Trade Commission and more funds for antitrust enforcers, will help level the playing field for enforcers to better protect consumers from anticompetitive abuses. I’m looking forward to continuing to work with Senator Klobuchar on this and other competition policy proposals.”

"Consumer Reports appreciates Senator Klobuchar's steady leadership in working to strengthen our antitrust laws to equip them to protect a competitive marketplace and the benefits that consumers, small businesses, and workers receive from it. This legislation gives our antitrust laws an important re-set. It ensures that harmful merger trends and exclusionary conduct can be stopped before it is too late and the harm is locked in. It extends the reach of the law so that blocking others from a fair chance to compete is a violation, even before a monopoly results. And it gives our government the enforcement authority and resources needed for effective deterrence. We look forward to working with Senator Klobuchar and others to revive our antitrust laws for the marketplace of the 21st century,” said George Slover, Senior Policy Counsel, Consumer Reports.

“Senator Klobuchar’s bill puts us on a path toward tractable, actionable, achievable antitrust reform that will free consumers, workers, and businesses from the crushing economic impact of anticompetitive mergers and monopolies. This is exactly the kind of leadership we need at the moment we need it most,” said Diana L. Moss, President, American Antitrust Institute.

This legislation is endorsed by Professor Jonathan Baker of American University Washington College of Law, Professor Martin Gaynor of Carnegie Mellon University, Professor Nancy Rose of Massachusetts Institute of Technology, Professor Steven Salop of Georgetown University Law Center, Professor Fiona Scott Morton of the Yale University School of Management, and Professor Carl Shapiro of the University of California at Berkeley.

US DOJ Antitrust Division Releases Review Letter Concerning University Patent Pool

The United States Department of Justice, Antitrust Division, (DOJ) has recently released a statement concerning the potential anticompetitive impact of a patent pool involving universities concerning patents involving “autonomous vehicles, the “Internet of Things,” and “Big Data.”  The DOJ finds that the pool is “unlikely to harm competition.”  The Press Release states:

The Justice  Department’s Antitrust Division announced today that it has completed its review of a proposed joint patent licensing pool known as the University Technology Licensing Program (UTLP).  UTLP is a proposal by participating universities to offer licenses to their physical science patents relating to specified emerging technologies.

As part of its review, the division interviewed potential participants and considered its prior guidance on patent pools.  The department has concluded that, on balance, and based on the representations in UTLP’s letter request, the proposed joint patent licensing program is unlikely to harm competition. 

“University research is a key driver of innovation,” said Acting Principal Deputy Assistant Attorney General Michael Murray for the Antitrust Division.  “In the physical science area, however, some university research may never be commercialized due to the costs associated with negotiating multiple licenses and combining the complementary university patents that may be necessary for cutting-edge implementations.  To the extent that UTLP makes it easier for universities to commercialize inventions that may be currently unlicensed and under-utilized, industry participants, university researchers, and ultimately the public can benefit.” 

Currently 15 participating universities intend to cooperate in licensing certain complementary patents through UTLP, which will be organized into curated portfolios relating to specific technology applications for autonomous vehicles, the “Internet of Things,” and “Big Data.”  The overarching goal of UTLP is to centralize the administrative costs associated with commercializing university research and help participating universities to overcome the budget, institutional relationship, and other constraints that make licensing in these areas particularly challenging for them. 

UTLP has incorporated a number of safeguards into its program to help protect competition, including admitting only non-substitutable patents, with a “safety valve” if a patent to accomplish a particular task is inadvertently included in a portfolio with another, substitutable patent.  The program also will allow potential sublicensees to choose an individual patent, a group of patents, or UTLP’s entire portfolio, thereby mitigating the risk that a licensee will be required to license more technology than it needs.  The department’s letter notes that UTLP is a mechanism that is intended to address licensing inefficiencies and institutional challenges unique to universities in the physical science context, and makes no assessment about whether this mechanism if set up in another context would have similar procompetitive benefits.

Under the Department of Justice’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the Antitrust Division currently intends to challenge the action under the antitrust laws based on the information provided.  The department’s conclusions in this business review apply only to UTLP.  They are not applicable to any other agreements or initiatives relating to patent licensing by universities or other entities.  The department reserves the right to challenge the proposed action under the antitrust laws if the actual operation of the proposed conduct proves to be anticompetitive in purpose or effect.

Copies of the business review request and the department’s response are available on the Antitrust Division’s website at https://www.justice.gov/atr/business-review-letters-and-request-letters, as well as in a file maintained by the Antitrust Documents Group of the Antitrust Division. 

The DOJ Business Review Letter is available, here.  The universities' request letter for review is available, here.  

Regulatory Changes Coming to the Bayh-Dole Act Regs?: Free Webinar

UIDP is holding a free webinar at 9:00 am Pacific Standard Time on January 14, 2021.  The webinar is titled, “Implementation of the NIST ROI Green Paper Findings.”  The description states:

Based on input from thousands of organizations in the research community, the National Institute of Standards and Technology (NIST) has recommended legislative changes to dramatically increase the ROI from the billions in government investment in research and development. This webinar will showcase the pending changes and provide information on the new opportunities and streamlined processes for universities and businesses that interact with federal labs or receive federal funding. The implications of the changes for research organizations both in the U.S. and abroad are significant.

Background: In April 2019, the National Institute of Standards and Technology (NIST) announced the release of a final green paper from its Return on Investment (ROI) Initiative for Unleashing American Innovation. This national goal aims to dramatically increase returns from the more than $150 billion per year of U.S. federal government investment in research and development. The NIST ROI Green Paper provided a summary of private and public stakeholder inputs received from hundreds of experts and organizations representing thousands of companies, universities, federal laboratories and other institutions. The document identified 15 findings by NIST to help inform decision-making and implementing actions by the relevant departments and agencies that could further enhance the U.S. innovation engine at the public-private interface. A number of the findings noted that implementation would require revisions to the Stevenson-Wydler Technology Innovation Act of 1980 or the implementing regulations to the Bayh-Dole Act. In response, NIST has vetted through informal and formal interagency processes and delivered both a legislative proposal containing 10 findings for modernizing the Stevenson-Wydler Act, and a Notice of Proposed Rulemaking for updates to the Bayh-Dole Act regulations.

The speaker is Courtney Silverthorn, the Acting Director of the Technology Partnerships Office at the National Institutes of Standards.  The moderator is Jay Schrankler, the Associate Vice President and Head of Polsky Center for Entrepreneurship & Innovation, University of Chicago.  Registration information is available, here. 

Delta and United Securitization Deals

Fitch Ratings has a nice discussion of the securitization deal concerning Delta Airlines and its mileage program around September 2020.  Here is a description of the deal:

The transaction is backed by payments to be made to SMIP under a license agreement signed with Delta for the use of the SkyMiles Intellectual Property (IP) assets and backed by co-brand agreements with third parties for the purchase of SkyMiles. SMIP, as owner and licensor of the IP, licenses the IP to SMIF which then sublicenses the IP to Delta. Through the license agreements, SMIP grants a worldwide license to Delta and its subsidiaries to use the IP to operate the loyalty program, SkyMiles. The licensees then pay a monthly license fee equivalent to all the cash collections generated by sale of miles to Delta as governed through an Intercompany Agreement. Additionally, the third-party agreements will be assigned to SMIP and payment for the purchase of SkyMiles from third parties will be remitted directly to a collection account held at JP Morgan Chase Bank, N.A. in the name of SMIP. These agreements include the co-brand agreement and membership reward agreement with American Express, the largest third-party partner.

The senior secured financing will be guaranteed, on a joint and several basis by certain subsidiaries under Delta. Additionally, the issuers grant additional security to the lenders/bondholders, including a first priority perfected security interest in the cash flows from the SkyMiles program, a pledge of all rights under contracts/agreements related to the SkyMiles program, a pledge of the transaction accounts (including the collection, payment and reserve accounts) and a pledge over the equity interests in certain subsidiaries of Delta.

There’s also a very interesting discussion of Covid-19 and the creditworthiness of Delta Airlines.  Notably, United entered into a similar agreement earlier in the year.  Details concerning that deal are available, here. 

Trademark Royalty Securitization Deal with Vanderbilt University

In 2019, Global Capital gave Goldman Sachs an award for most innovative securitization deal.  The deal concerned the securitization of royalty payments from a license between Vanderbilt University and Vanderbilt University Medical School.  The deal apparently provided Vanderbilt University funding raising its endowment by 30%.  More details are available, here, in an article by Max Adams.  In 2018, Vanderbilt University had an endowment around US $4.6 billion. 

Copyright Parts of Covid-19 Relief Bill

Well, I guess because they could: The Hollywood Reporter has some of the details concerning 10 years in prison for illegally streaming and small claims copyright administrative bodies parts of the Covid-19 relief bill.  And, the immediate deduction for TV and movie production expenses gets extended.  Never let a crisis escape without taking advantage of it. 

Robust Funding for Regenerative Medicine in 2020

The Alliance for Regenerative Medicine has released data on financing for regenerative medicine and it is at a record pace for 2020.  In the first three quarters of 2020, worldwide financing has reached almost $16 billion and exceeded the top prior year of 2018 already ($13.5 billion).  The report includes a breakdown based on amounts for types of regenerative medicine as well as private, public and partnership funding. The report is a short two pages or so and available, here.