

"Where money issues meet IP rights". This weblog looks at financial issues for intellectual property rights: securitisation and collateral, IP valuation for acquisition and balance sheet purposes, tax and R&D breaks, film and product finance, calculating quantum of damages--anything that happens where IP meets money.
"Fuel consumption statistics are a key consideration when purchasing a car -- presumably because a driver wants to understand how much it will cost to make practical use of the car. Are such considerations made when a party is obtaining an intellectual property right? For example, how much it would cost to enforce a monopoly in the case of a patent or exploit and defend a reputation if a trade mark is obtained? How much protection do intellectual property rights provide? Without the ability to litigate are they a toothless lion?Comments, anyone?
It was suggested in Lord Justice Jackson’s Review of Civil Litigation Costs in England and Wales that SMEs could enjoy access to justice by subscribing to before-the-event (BTE) legal expenses; BTE was an active consideration in the impact assessment pertaining to the Patents County Court consultation.
There are a small number of providers of specialist IP legal expenses insurance. These policies can indemnify legal expenses if a party needs to pursue an infringer. Having BTE in place demonstrates that the custodians of a company have risk management strategies in place and obviates the need to hold large cash reserves or seek finance to pay legal fees.
If SMEs can litigate more easily by virtue of BTE, will this change behaviour and attitudes towards intellectual property rights? House prices are a frequent reference in some journalism. It is, however, interesting to consider that these prices are set by the > 1% of housing stock which may be on the market at any one time. Are there parallels with commercial behaviour and the extent to which IP strategies could be influenced by the small number of cases which are litigated or the likelihood of litigation?
In many income-based IP valuation models, litigation support is a factor. Measures could be taken of how well protected a market is and how difficult it is for competitors to encroach or the likelihood of damages being recovered if there is an infringement. Calculations made, allowing for different levels of litigation protection, could quantify the benefits of a legal protection policy in terms of the value of the company, much of which may vest in intangible assets secured by IPRs.
Insurance should allow SMEs to pool resources so that, when a potentially catastrophic event occurs, they can be afforded protection. This involves the insurer maintaining a reserve of funds that will be used to indemnify the legal expenses of whichever businesses’ IPRs are infringed. In order for a fund of appropriate size and containing appropriate risks to be maintained, membership of the pool, or purchase of a policy, must be attractive and commercially rational. To achieve this end it is important for underwriters to understand the views of IP owners and practitioners.
Burton Malkiel, in his book A Random Walk Down Wall Street, hypothesised that share prices follow a random walk. If an analogy can be supported between a share becoming popular and going up in price and an IPR becoming popular and then being infringed it may be erroneous to price a book of IP protection business on claims histories. We are, therefore, influenced in our underwriting approach by game theory.
It is interesting to note that game theory can be used to demonstrate that the chances of a response being posted to a blog article should diminish if there is an obvious response".
Technorati Tags:
European Union, Patent, Generic Pharmaceuticals
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Do you believe in retainers for IP legal work? |
"As I told you, more or less the international community thinks that the French court are not awarding damages ( obviously there is an assimilation between damages and big amounts);Thanks, Richard, for taking the effort to let us know.
The truth is:
(1) this is wrong
(2) if bigger damages are not awarded it is often due to the fact the plaintiff refuses to provide information which is (rightly or wrongly considered as business secrets) to the court, they do not understand that it is needed , they are to lazy to do the necessary work or their lawyer and /or trade mark agent does not do what it needs to do. ...
Be aware that often in France the amount awarded for unfair competition or parasitism could cover damages to well known marks since we had the habit of using tort law for this even before the CTM Regulation and the trade mark directive".
• Total Value ExtractionFor those who like to sink their teeth into something substantial, this seminar will be treating its European participants to the unveiling of the Patent Valuation Gauntlet. This reputedly consists of more than 400 issues which, the seminar's architects maintain, should be included in patent analysis. The categories to be discussed will include the "usual suspects" such as Citation Analysis, Prosecution History, Claims Analysis, Investor Profile and Sustainability in Opposition, and lots more besides.
• Probability Weighted Expected Return Method
• Monte Carlo Analysis
• Real Options
• Binomial Lattices
• Decision Trees
• Market Method
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SNCF: from chemin de fer to information highway |
* €10,000 for trade mark infringement;The authors of the source from which this note is taken add:
* €5,000 for violation of the SNCF's rights in the domain name sncf-usa.com and
* €5,000 for perpetrating a misleading commercial practice.
* Costs of €5,000.
"In terms of brand protection strategy, there is little doubt that the prospect of court action is a more powerful deterrent than a UDRP decision. The defendant in the present case is now in the position of having to find €25,000, a significant sum which will certainly make him and others think twice about such behaviour".Even apart from the deterrent factor, it seems to this blogger that, on the whole, damages in French trade mark infringement proceedings have in the past tended to be fairly low. While €25,000 is not exactly a king's ransom, it strikes him as indicating that, possibly since the coming into force of the EU's IP Enforcement Directive, French damages awards may have become a little more generous. IP Finance would be happy to hear from French readers as to whether this impression is correct.
"A substantial and growing body of work indicates that IPR reform is associated with an acceleration of industrial development. Earlier concerns that a shift to stronger IPR would freeze the industrial development of countries – or send it into reverse – now seem overblown.
However, it is important to keep in mind that the empirical results described above are focused on one type of effect of stronger IPR and the results may not generalize to all countries. For example, the poorest countries attract little FDI, and a change in the IPR regime may do relatively little to induce large FDI flows simply because the degree of IPR protection is only one of many determinants of inward FDI [This is an important caveat: the multiplicity of determinants includes elements that are difficult to build into mathematical models too, such as political and social stability].
Much remains to be done to extend recent research. Further empirical analyses could reveal what sorts of countries and industries obtain the greatest boost from IPR reform and whether increases in industrial development persist in the long run. Research that employs high quality price data in a way that allows analysts to conduct welfare calculations would be particularly informative. Additional work could also reveal the extent to which production shifting reshaped the Northern economies. Is the temporal coincidence of rising patent rates, higher R&D intensity, and accelerated productivity growth in the United States with the shift of production overseas a consequence of the mechanisms emphasized in these models described above? [I wonder whether the increasing use of the Patent Cooperation Treaty, and the larger number of countries which now belong to it, makes it difficult to compare patent rates as between the same and different categories of country]
You can access the full text here.
There is also a clear need for more theoretical work in this area. Under what circumstances is the acceleration of industrial development induced by stronger IPR truly welfare enhancing? Under what circumstances are the benefits of more rapid industrial development undercut by other effects of stronger IPR? [More work must be done on the effect of stronger IPR in terms of rights other than patents too. And unregistered rights regimes pose their own problems for economic analysts as well as for investors] The mathematical challenges that theorists confront in building models that could address these questions are clear, but so are the potential benefits for policymakers and empirical researchers. Given the number of questions for which we still lack complete answers, this domain is likely to be an area of active research in economics for some time to come".
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Royalty, Microsoft, Uniloc