Thursday 26 December 2013

Embryonic stem cell research: ALLEA calls for patent protection, increased funding

The European Federation of Academies of Sciences and Humanities, ALLEA, has made a clarion call for greater funding for patentability and research funding relating to embryonic stem cells.  According to its statement, reproduced in relevant part below:
"With its third statement on “Patentability and Research Funding relating to embryonic Stem Cells”, ALLEA follows up on two previous statements regarding this issue – released in May 2011 and September 2012 respectively – both closely linked to the case Brüstle v Greenpeace and the corresponding Judgment of the Court of European Union (CJEU) [noted on the IPKat here]. 
The statement, prepared by the ALLEA Permanent Working Group on Intellectual Property Rights under the chairmanship of Professor Joseph Straus, raises concerns against a possible acceptance of the above mentioned Judgment which would most seriously affect research of essential importance to citizens of the European Union. Therefore, the competent bodies of the European Union are urged “not to accept the proposed amendments and to continue the well balanced funding of the respective research at the Union level”. It is furthermore argued that basic research in this field would need more EU funding rather than less.

In its previous statements, ALLEA had explicitly underlined that a lack of patent protection in the area of embryonic stem cell research could negatively affect the investment in developing therapeutics based on human pluripotent embryonic stem cells. It was also stated that serious concerns of the European scientific community regarding the effects for research in this important area of medicine would need to be taken into account. ..."
ALLEA's previous statements, background documents and further information on this topic can be downloaded hereThe full text of this statement can be downloaded here.

ALLEA's credentials are impeccable and its arguments well-founded, but that is no guarantee that its voice will be heeded by a Europe in which decision-makers are frequently caught in the cross-fire of conflicting lobbying, strident campaigning and potent sound-bites.

Wednesday 25 December 2013

What the Index for Collaborative Innovation Partners Teaches (and What It Does Not)

The Patent Analytics Group on LinkedIn has brought to my attention a recent blog post by Alex Knapp, which appeared on the forbes.com site. Entitled “Canada, Israel and Switzerland are America’s Top Innovation Partners”, here, the article describes the findings set out in the “U.S.-Israel Innovation Index”, which is described as measuring “bilateral research and development between the U.S. and other countries, here. The study was carried out by the U.S. Israel Science & Technology Foundation. In the words of its Executive Director, Ann Liebschutz, “We picked 16 countries that were geographically diverse, had links to US and had strong innovative tech companies.”

The study examined various parameters of cooperation in R&D, most notably government-to-government connections, pool of human capital, spending on R&D and involvement of private industry. Based on these criteria for measuring which countries are the “largest” innovation partners with the U.S., Switzerland came out number one, followed by Canada and Israel. The reasons why each of these three countries is so highly ranked appear to be unique to each country. Thus what seems to drive US-Swiss innovation collaboration is the role of the pharmaceutical industry in Switzerland. Given the cost and complexity of bringing pharmaceutical products to market, collaboration seems to have become increasingly common in the mutual interest of the pharmaceutical interest in each country. The article does not explicitly address Canada, but one can surmise that the same general dynamics that integrated the US auto industry with the auto manufacturing industry in southern Ontario provided a ready platform for various other forms of collaboration in innovation as well. To all intents and purposes, this integrated region has been one large industrial ecosystem, despite the presence of an international boundary.

As for Israel, emphasis in the piece was placed on the strength of the country’s innovative human capital, fuelled in part by the wide net of military conscription for the country’s post-high school youth. While the post, quoting Ms Liebschutz, overstates this (“The technical training that every Israeli receives in the army produces a country of capable engineers”), there is truth in the observation that clusters of young talent in certain military units, especially in the Intelligence Corps, have created an environment for world class innovation after release from military service. However, set against the country’s strength in human capital are its relatively limited domestic resources for funding substantial R&D activity. In fact, it can be argued that Israel high tech only took off in the 1990s, in part due to the public-private program known as Yozma, here, which brought overseas capital and managerial know-how to the local Israel R&D market.

The centrality of the US role of providing the funding for its innovation partnerships was recognized by Ms Liebschutz herself. As she notes:
“In a time when budgets are lean, you hear a lot about cuts and priorities in terms of where the government should put its resources. International cooperation, when done correctly, is a way to leverage those resources. Israel is good at creating international cooperation for funding. We felt this bilateral innovation index serves not just [the] US-Israel relationship, but the scientific community as a whole where it shows a good ROI on international cooperation.”
One might however ask just how far the US-Israel relationship can be generalised in pointing to valuable forms of cross-border innovation partnerships. Perhaps most notably, unlike Switzerland or Canada, the Israeli hi tech model prefers an exit (as speedy as possible) by the founders and major investors of the local innovation company, usually in favour of an overseas purchaser or investor. The upshot is that the capital brought from the US side into the partnership largely redounds to the benefit of a small number of people connected with the Israel partner and far less (if at all) to the Israel overall labour market, which seems largely unaffected in the aggregate.

Perhaps the ultimate upshot of this study is that there is no “one size fits all” approach for cross-border innovation partnerships, in general, and innovation partnerships with the US, in particular. This means that there will necessarily need to be trial and error in the process as the US seeks to find successful forms of innovation partnership with various countries. Managing this process in a fiscally responsible manner, in the face of uncertain results, poses the greatest challenge for those seeking to obtain benefit from such efforts in innovation partnerships.

Monday 23 December 2013

The Debate about the U.S. Court of Appeals for the Federal Circuit Continues

Donald Dunner, one of the most respected advocates before the U.S. Court of Appeals for the Federal Circuit and partner at Finnegan Henderson, recently addressed Chief Judge Diane Wood’s (7th Circuit) criticism of the Federal Circuit.  His comments were recently published by the Federal Circuit Bar Association, here.  Dunner challenges Chief Judge Wood's arguments and states:

First, the specialist/generalist alternatives that she posits are reminiscent of the pre-Federal Circuit dialogue and the Rifkind comments to which the Meador proposal was expressly directed. While the Federal Circuit reviews almost all the patent appeals from the district courts and several other tribunals, and its judges develop meaningful expertise in patent law, it is by no means a specialist court. As I earlier noted, only four of the current active Federal Circuit judges had pre-judicial patent backgrounds and that has been true since the inception of the Court in 1982. It is also likely to continue to be true since even the patent bar is comfortable with the notion of having a limit on patent-trained judges on the Court. And the inclusion of many non-patent areas of review within the Court’s jurisdiction further minimizes the prospect that its judges will develop tunnel vision and become Egyptian Priest-like, as Judge Rifkind feared, or that they will never explain what the rules are or why one side or the other prevailed, as Chief Judge Wood fears.

Second, Judge Wood’s repeated focus on the complexity of patent appeals and on the fact that those appeals are no more complex than the non-patent appeals handled regularly by judges in the regional circuit courts is a strawman. The Federal Circuit was not established because it was felt that a special court was needed to deal with complex legal issues. If that was anyone’s concern, it was not vocalized loudly, and indeed I personally do not recall hearing of it -- and I was heavily involved in the events leading to the Court’s formation. On the contrary, the essential arguments in favor of the Court had to do with the widespread attitudinal differences between the circuit courts of appeals’ approach to patent law and the attendant lack of uniformity and predictability in their decision-making, leading to rampant forum shopping and the negative impact that had on corporate R&D decisions.

Third, Judge Wood’s concern about the need for percolation is understandable but not a reason to eliminate the Federal Circuit’s exclusive jurisdiction over patent appeals. For the fact is that the current Federal Circuit model generates a significant amount of percolation, not only in the not infrequent dissents from panel decisions but from the meaningful number of en banc decisions which generate their own meaningful number of dissents. These dissents, coupled with regularly filed amicus briefs and the not infrequent requests by the Supreme Court to the Solicitor General to provide recommendations as to whether Federal Circuit decisions should be reviewed by the Supreme Court, provide the diversity of views which Judge Wood feels is so important, without forfeiting the uniformity and predictability which was essentially non-existent before the establishment of the Federal Circuit.

Fourth, Chief Judge Wood’s observation that the lines between patent law and other areas of IP law are blurring and that there’s no reason why patent law should be singled out for special treatment ignores the fact that these other areas of IP  law were not faced with the problem of huge attitudinal differences between the regional circuits that led to massive forum shopping and a lack of predictability and uniformity in decision-making. As to the quality of Federal Circuit decision-making, which has been called into question by Judge Wood, it compares favorably to the quality of decision-making by the regional appellate courts. And that includes the two subject areas on which Judge Wood focuses: claim construction and obviousness. The Federal Circuit’s decision to make claim construction the province of the bench rather than the jury was affirmed by the Supreme Court in Markman. The Federal Circuit’s decision to adopt no deference appellate review of district court claim construction was adopted en banc in Cybor but has been subjected to an intra-court percolation process leading to the recently heard but yet undecided Lighting Ballast en banc review, providing exactly the percolation process with which Judge Wood is so concerned. As to obviousness, one can debate whether the Federal Circuit’s TSM (Teaching, Suggestion, Motivation) test was responsible for what Judge Wood characterizes as a “low” standard of obviousness resulting in “the thickets of patent rights on marginal improvements”, but I would suggest that the amorphous, ill-defined Supreme Court KSR framework is hardly conducive to generating a uniform and predictable body of law, the raison d’etre for the formation of the Federal Circuit. And the frequent Supreme Court review of Federal Circuit decisions has been the subject of multiple and varying explanations by Supreme Court experts, most of which have not focused on the lack of quality of Federal Circuit decisionmaking.

Which leads me to Judge Wood’s specific proposal for dealing with her concerns. Simply stated, it is in my view unworkable. Before the establishment of the Federal Circuit, the regional appellate courts were all over the lot in their attitudes toward patents, and because litigants had significant choices as between district courts in one or another circuit, subject only to venue and jurisdictional constraints, there not only was extensive forum shopping but little uniformity or predictability in litigation outcomes. Yet that is exactly what would happen under Chief Judge Wood’s proposed regime. While she provides a choice to litigants as between the Federal Circuit or the regional circuit in which their claim was first filed, there is little doubt that that choice would be made based on the same considerations applicable to the pre-Federal Circuit regime, namely which court is most favorable to the particular interests of the litigants. And the problem is compounded by the fact that at the district court level, before the choice of the appellate court is made, the district court would not know whose appellate jurisprudence to follow, not only on substantive but on procedural issues. As demonstrated by the pre-Federal Circuit experience, differences in jurisprudential approaches were often outcome-determinative. Nor is the problem alleviated by the JPML option which she provides for multiple pending appeals pertaining to a single patent in different circuits. For the dysfunctional system that predated the Federal Circuit was not keyed to multiple pending appeals pertaining to a single patent in different circuits. On the contrary, it was keyed to the fact that a patentee or accused infringer of a single patent had meaningful options to forum shop to select a favorable jurisdiction, an option which would also be available under Chief Judge Wood’s proposal. In short, not only are the problems Chief Judge Wood identifies not meaningful but her proposal to take us back to what she calls the “bad old days” is unworkable... It is accordingly my view and that of many of my colleagues in the bar that the appellate experiment that began 31 years ago has been a hugely successful one, for the reasons I have spelled out, and that it is not in need of a major fix of the type contemplated by Chief Judge Wood...

I find Mr. Dunner’s arguments persuasive.  What do you think?  Here is additional coverage of Mr. Dunner’s comments by Corporate Counsel, as well as additional discussion by Mr. Dunner. 

Wednesday 18 December 2013

Pay-for-delay: a new article and a couple of questions

"Pay-For-Delay Practices in the Pharmaceutical Sector: Lundbeck, Actavis, and Others" by William Choi, Bruce Den Uyl and Mat Hughes, has just been published in the Journal of European Competition Law & Practice (2014) 5 (1): 44-52. According to the abstract:
"It is straightforward to set out an economic model in which pay-for-delay settlements may lead to monopoly profit sharing, so as to prevent entry and to keep prices high; 
The U.S. Supreme Court's and the European Commission's guidance appears to differ in that regard, with the U.S. Supreme Court focusing primarily on the size of the payment and whether it has a legitimate justification; 
In some circumstances, banning pay-for-delay may reduce the scope for settlements to be agreed and, somewhat paradoxically, delay market entry by generics firms".
This blogger has long been fascinated by the concept of pay-for-delay and has wondered why, so far as he can tell, this phenomenon has not spread beyond the pharma patent sector and into markets that are less emotive and public policy-driven.  Also, given the relatively short life of patents, any harmful effects of such payments -- assuming that they are harmful -- are presumably going to be of pretty short duration anyway.  Can anyone explain

ICC focuses on IP management for innovative SMEs

From Sam Davies (ICC Online Communities Coordinator) comes the following information, which will certainly be of potential interest to many readers of this weblog:
As an IP blogger you may already be aware of the series of research papers into IP and Innovation that the International Chamber of Commerce (ICC) launched late in 2013. We are pleased today to release a video related to the first paper in this series.

The first paper -- Enhancing IP Management and Appropriation by Innovative SMEs 
--provides an overview of the various internal and external factors that may influence the approach SMEs take to IP management, presents the main types of strategies they adopt, discusses ways to improve their IP management, and articulates a number of recommendations for policy-makers.

In this Google Hangout recording, Daphne Yong-d'Hervé, ICC's Chief Intellectual Property Officer discusses with Omer Hiziroglu, General Manager of Inovent Innovative Ventures (Turkey), and Emil Pot, General Counsel at Actogenix (Belgium), the role that IP property management plays in the business strategies and operations of technologically innovative SMEs.

Please feel free to link to this video or use it to create discussion on your blog or online community. To see the video and find out more about the series, click here.

For further information, please contact Daphne Yong-d'Hervé,dye@iccwbo.org or follow @iccwbo_org on Twitter, or #ICCIP.
The role of the ICC is something that this blogger has never understood.  The organisation does indeed take an interest in intellectual property, as evidenced by the recent promotion of its Positive Innovation Agenda (see IPKat post here), but it doesn't seem to participate in all the usual international and regional forums for intellectual property debate.  Can anyone fill this blogger's knowledge gap?

Also, if there is any reader who would like to review the ICC paper for this weblog, please get in touch!

Tuesday 17 December 2013

Copyright's contribution to the US economy: rosy figures, this time round

Thanks to Chris Torrero, my attention has been drawn to "Copyright Industries in the U.S. Economy", a report prepared by the International Intellectual Property Alliance (IIPA) which has, since 1984, been working in partnership with the U.S. government to improve the ability of the copyright industries to do business in foreign markets. Quoting directly from the preface to this report:
"To quantify the contribution of the copyright industries, IIPA commenced a series of economic studies in 1990. Copyright Industries in the U.S. Economy: The 2013 Report, the fourteenth such report, by Stephen E. Siwek of Economists Incorporated, covers the period 2009-2012. This Report shows that the copyright industries make up an increasingly large percentage of value added to GDP; create more and better-paying jobs; grow faster than the rest of the U.S. economy; and contribute substantially to U.S. foreign sales and exports, outpacing many industry sectors. The specific findings of this year’s Report mark a milestone: for the first time, the contribution of the core copyright industries of the U.S. economy surpassed one trillion dollars in 2012".
The report can be accessed in full here.

This blogger is generally quite sceptical of reports and studies that purport to measure the value of copyright industries, partly because of the definitional issues involved and partly because of the risk of double-accounting.  However, where there is a series of reports as is the case here, comparisons between different editions can be quite meaningful.  The period 2009-2012 is perhaps one that should be treated carefully, since it coincides with the astonishing growth of online transactions concerning copyright works at the same time as many non-IP sectors contracted or stagnated in the wake of the US banking crises, sub-prime lending scandals and so on.  Now that a global recovery is gradually manifesting itself, the next set of figures from the IIPA report might show a handsome contribution of copyright industries to the US economy in dollars and cents but a far weaker showing in terms of percentage contributions.


Monday 9 December 2013

Rockstar and IP Governance

John veschiOver at the IP Summit in Paris, John Veschi - CEO of Rockstar - has provided a couple of fascinating insights in how IP is governed and should be included on balance sheets. One of John's thesis is that if Nortel had put the value of IP onto its balance sheet, then the company might not have been placed into bankruptcy. Rockstar - on the other hand - was able to value the IP at USD 4.5 billion because of the arm's length transaction in the form of the purchase by the Applie / Microsoft consortium. Clearly there is / was a mismatch between these two values. Rockstar Nortel Logo Currently it's considered to be too hard to place any value for IP normally onto a balance sheet. Historic costs - including preparation and prosecution costs - is clearly inaccurate because the value of IP changes over time. The difficulty on ascertaining value means that litigation concerns often result in a value of zero being placed on the balance sheet. To date there have been no shareholder suits arguing that the IP should be valued higher. Share analysts fail to understand the value of IP, as this author can confirm having been consulted many times on this subject. John drew an analogy with share options. Their value was originally not included on balance sheets. Today the Black-Scholes method enables at least a rough calculation to be made. The value of IP will also be an inaccurate calculation, because of unknown variable. Black Scholes John concluded that an IP rich company needs a different governance strategy in order to exploit its value. Few CEOs have any IP background and it's not surprising that they tend to be dismissive of IP, particularly when faced with an allegation of infringement. The discussion afterwards also illustrated different opinions. One speaker highlighted the risk of invalidation of IP risks. John pointed out that this risk can be built into calculations.

Thursday 5 December 2013

Security for costs and US litigants in Serbia

Back in November 2010, famous US shoe company Skechers sued Serbian company Safran, which imported and sold sneakers similar to Skechers’ Shape-Ups, for trade mark and copyright infringement and for unfair competition. Safran asked for Skechers to deposit security for litigation costs since, with Skechers not having a presence in Serbia, there was a risk that the company would not reimburse Safran’s litigation costs if it lost (the United States is not a member of the 1954 Hague Convention on Civil Procedure, which provides for free access to the courts). Skechers refused to deposit security for litigation costs and invoked an 1881 Treaty on Commerce between Serbia and the United States which provided, among other things, that citizens of Serbia and the US are to have full reciprocity and access to the courts. Safran objected that the treaty was no longer applicable, because there was no factual reciprocity.

The Court of First Instance refused Safran’s request. Safran appealed; the Appellate Court remitted the action to the Court of First Instance, asking it to seek the opinion of the Ministry of Justice. The Ministry responded that the 1881 treaty is was in force, but that there was no factual reciprocity between the US and Serbia, because Serbian citizens in the US had to deposit security for litigation costs when suing in a state in which they did not have residence.

After the Court of First Instance ordered Skechers to deposit security, Skechers appealed, arguing that Serbia and the US had to respect the 1881 treaty until it was revoked by a special procedure under the treaty itself. Skechers added that the US did comply with the treaty, citing a US Supreme Court decision in which the court explicitly held that the treaty must be respected. In light of this, the Appellate Court refused Safran's request that Skechers deposit security for litigation costs in a decision which is final.

Source: "US companies do not have to deposit security for litigation costs", article for World Trademark Review by Gordana Pavlovic and Maruska Bracic (Cabinet Pavlovic), Belgrade and Brussels, 25 November 2013

FRAND royalties: a new article

J. Gregory Sidak (Criterion Economics LLC) has just informed me that his latest article, "The Meaning of FRAND, Part I: Royalties", has now been published in the Journal of Competition Law & Economics, 9(4), 931–1055. It's 125 pages long and looks most impressive. According to the abstract:
"What does it mean for a patent holder to commit to a standard-setting organization (SSO) to license its standard-essential patents (SEPs) on fair, reasonable, and nondiscriminatory (FRAND) terms? When is a royalty FRAND? Drawing from both legal theory and economic theory, I propose an interpretation of FRAND that distinguishes and reconciles the conflicting definitions of FRAND and provides courts a practical approach to identifying FRAND royalties. A proper understanding of a FRAND royalty requires recognizing the combinatorial value of standard-essential patents. That recognition reveals the fallacy in attempting to apply the “ex ante incremental value” rule to the determination of a FRAND royalty. FRAND royalties divide the aggregate royalties generated by the standard among the holders of patents essential to the standard. Such a division should maximize the surplus resulting from the standard’s creation. It must also satisfy an individual-rationality constraint for the patent holder and the licensee, thereby encouraging continued participation in the setting and implementation of open standards, as opposed to greater reliance on proprietary standards".
Greg has kindly purchased "open access" to the article from Oxford University Press, so anyone may download the published version for free, by clicking here.

This blogger's appreciation of the subject is limited by his relative lack of sophistication in dealing with the economic side of it, but if any reader with the relevant expertise would like to review it, he'd be grateful.

Tuesday 3 December 2013

What are we to make of the Defensive Patent Licence?

Why has discussion on the patent troll phenomenon taken on a bit of a true-believer tone? A case in point is a recent posting on the Cyber-Prof listserv, which is captioned "Private-Ordering Approaches to Patent System Issues-and Defensive Patent License Launch - Conference". It is authored by Jennifer Urban, here, who is the Assistant Clinical Professor of Law and Co-Director, Samuelson Law, Technology & Public Policy Clinic at the University of California-Berkeley. Let me bring the readers material portions of the post accompanying this notice.
“The current patent system poses a growing threat to innovators. Broad patents of often suspect quality can cripple legitimate competitors and prevent new entrants’ access to the marketplace. Patent trolls buy these broad patents and use them to threaten everyone from large companies to start-ups to municipalities and non-profits.

The DPL Launch Conference will focus on innovative private-ordering solutions to address the patent threat issue. These solutions can go hand-in-hand with congressional or judicial reforms. … The conference will then feature and officially launch the Defensive Patent License (“DPL”). The DPL is a new legal mechanism designed to protect innovators by networking patents into powerful, mutually beneficial legal shields that are 100% committed to defending innovation and reducing patent litigation abuse....

Innovators who opt into the DPL network pledge to forgo any patent litigation against any other DPL user, except when asserting patents defensively. In return, they are eligible to receive royalty-free licenses from every other user’s portfolio. Anyone taking a license must promise to put all of her patents under the DPL. In the event that the patents are sold, DPL users must legally obligate the new owner to abide by prior DPLs. If one ceases offering one’s patents under the DPL, previous licensees keep their DPLs royalty-free, but the leaving user may have her licenses converted from royalty-free to fair, reasonable, and non-discriminatory terms (FRAND) at the discretion of the remaining licensors.

With a broad strong network of reliably defensive patents at their disposal, DPL users gain freedom to innovate. The DPL is also designed to help limit lawsuit risks from patent trolls, as trolls are unlikely to pursue acquisition and enforcement of patents that have been legally obligated to defensive use and licensed to DPL users on a royalty-free basis.”
Let’s assume that this summary represents a short-form manifesto of the current world-view that underlies the DPL initiative. On that basis, I have several questions and comments:

1. What is the empirical evidence for the assertion that “[t]he current patent system poses a growing threat to innovators”, which “cripple[s] legitimate competitors and prevent new entrants’ access to the marketplace.” Patents have always been exclusionary, which is inherent in the nature of a patent as a negative right. What is different this time? The claim seems to rest on the view that there has been a “decline” in innovation. Maybe yes, maybe no, depending upon how one defines innovation, develops a metric for measuring whether innovation is roughly increasing or decreasing, and then can successfully disentangle the ebb and flow of innovation within a normal statistical range from a statistically significant departure from this range. While there has been some empirical research in this regard, to conclude that the patent system is a “threat” to innovation seems at best premature and at worst a bit overwrought.

2. Public patent enemy number one is “broad patents of often suspect quality”, which are then exploited by the patent troll. Here, as well, I am not certain that the research is as clear as suggested. Indeed, I have encountered claims that patent trolls actually make use of patents of reasonable quality. This is assuming, of course, that it is even possible to measure patent quality objectively and point to a decline, at least in some areas, over time. The iconic words about the decline of the youth generation, as taken from the Broadway musical of a half a century ago, “Bye Bye Birdie”, here, merits attention. “Why can’t they be like we were, perfect in every way. What’s the matter with kids [read patents] today.” Perhaps we are imaging a patent past perfect that never was.

3. The connection between patents and innovation is highly nuanced and not entirely understood. As I recently suggested elsewhere, in “The Misplaced Patent Narrative”, here, there may be swathes of innovative activity for which the patent system is of limited relevance. But even if we are talking about inventions (after all, patents are about invention, which is a legal notion, and not about innovation, which is beyond the legal IP pale), something more profound may be taking place in the intellectual IP environment. Thus, if we are speaking of ebbs and flows, what may be occurring is a broader intellectual return to the anti-patent ethos that was present from the post-WWII era through the 1970s (though patents were then seen more as threats to competition to innovation). That patents fall in and out of intellectual favour may be cyclical and correspond to rises and declines in innovation (without any necessary causal connection between the two phenomena).

4. There is a sense that enforcing one’s patent borders on being an “illegitimate” use of the patent right (except for “defensive” purposes, whatever that precisely means). Indeed, the DPL seems to rest on the notion of patent altruism: that it's better to “pool” patents as a collective shield in the name of innovation than for a patentee to assert its patents against a competitor, or for an inventor to seek to monetize his invention by whatever legal means that are available. Whether such an altruistically communal view of the use of patents will in fact lead to “more” innovation” is hardly self-evident and may even be misplaced. I suggest that the DPL supporters take a close look at the kibbutz experience in Israel, here, for an illuminating example of the limits on any experiment resting on communal goodwill in the face of individual self-interest.

5. The ability of an arrangement for the defensive aggregation of patents, such as in the DPL framework, to reduce patent troll activity, also needs to be empirically established. The theory seems to be that such aggregation will serve to dry up the potential pool for patent troll-exploitable patents. Here, as well, maybe yes, maybe no. Ultimately, whether this will come to pass will depend upon whether the type of patent and patentee that seeks the services of a patent troll will be likely to enter into a DPL arrangement. Much more research is required on this point.
Don’t get me wrong. My critique is not directed at Professor Urban, who is affiliated with one of the great universities/law schools/centres of innovation in the world. My reservations rest on whether we really know enough about the connection between innovation, inventions, the patent system, altruism and collective behaviour to consider “innovative private-ordering solutions to address the patent threat issue … [that] can hand-in hand with congressional or judicial systems.” Perhaps a larger dose of humility, at least for the present, might be in order.

More on the Defensive Patent Licence and the February 2014 conference here

Saturday 30 November 2013

How the Government Can Save Money: Pirate Software

The Washington Post reported that the U.S. Army recently was sued for copyright infringement by breaching a license agreement for software—which the U.S. Army apparently did.  Okay, so that is government not at its best.  The silver lining for the U.S. Army is that the copyright owner settled for $50 million--$130 million less than it would have cost the government to license the software.   The silver lining for the copyright owner is an unexpected check for $50 million and, I would hope, a lot more business.  The nice message for the rest of us is that the U.S. government can hire folks that can create software that works well. 

Here is a portion of the complaint:

In March 2009, Apptricity inadvertently learned that the Army may have been using more Apptricity software than that for which it had procured licenses.   Apptricity employees attended a PD TIS Strategic Capabilities Planning Meeting held March 3-5, 2009 in Richmond, Virginia, where the U.S. Army Program Director stated that the Army was deploying thousands of devices with the Apptricity software.

Anyone need an auditor?

Friday 29 November 2013

WIPO GREEN marketplace open for business

If you are concerned about how to commercialise a green technology, or about what sort of impact someone else's green technology might have on your business, you may want to take a look at the World Intellectual Property Organization's WIPO GREEN database and online marketplace.  It won't solve any of your legal problems, but it will give you a better idea of what's going on in areas in which you (or your client) may be involved.  Details are available from yesterday's WIPO media release that reads as follows:
WIPO GREEN: New Online Marketplace Seeks Environmentally Sustainable Solutions for Climate Change 
Geneva, November 28, 2013: PR/2013/749 
WIPO launched today a new online marketplace connecting a wide variety of groups seeking shared innovation and environmentally friendly technologies to address climate change.
The WIPO GREEN database and network matches owners of new technologies with individuals or companies seeking to commercialize, license or otherwise distribute a green technology. Its objective is to accelerate innovation and diffusion of green technologies and contribute to the efforts of developing countries in addressing climate change. 

This blogger wonders how long it will be before the issues faced by the ICT sector with regard to standard-setting and FRAND licences are endemic in the green technology sector too.  A big difference there is that the perceived public interest in getting businesses to use green technologies may have an impact on both the rate of royalties that a court regards as reasonable and the exercise of discretion in granting injunctive relief.  Thoughts, anyone?

Wednesday 27 November 2013

Aspiration versus reality: a perspective on Scottish plans for business-friendliness

From the excellent Dr Andreas Rahmatian (Senior Lecturer, School of Law, University of Glasgow) comes the following observation:
I have started looking through the "White Paper" ("Scotland's Future. Your Guide to an Independent Scotland") on Scottish Independence which was published yesterday. It is, of course, not a White Paper, but a manifesto of the Scottish National Party (SNP) to promote independence of Scotland. Many sections are quite eerie for somebody with some knowledge of political philosophy and modern European history, not only because what it says, but also because what it leaves out.

In that document I have come across the following passage at page 102. It says:
"Intellectual property

We will ensure continuity of the legal framework for protecting intellectual property rights. Independence will also allow Scotland to offer a simpler and cheaper, more business-friendly model than the current UK system, which is bureaucratic and expensive, especially for small firms. The UK is one of the few EU countries which does not offer a scheme which covers the basics of protection. Scotland could follow, for example, the German model which protects technical innovations."
Can anybody explain to me what that means? Judicious answers are appreciated.
This blogger will start the debate.

On a simple level, the meaning of the words is clear: "Let's introduce a cheap system of second-tier legal protection for innovations that are technical because it is cheaper and more business-friendly than an IP system that lacks such a scheme". However, what it means is not just a question of parsing a verbal formula: there is a real-world dimension to it too.  What does this paragraph mean within the context of attracting innovative businesses to Scotland or inducing them not to leave that country? What does it mean in the context of a former manufacturing powerhouse that is now, like many of the first wave of industrially competent countries, now in a profoundly post-industrial phase?  What does "business-friendly" mean in a context in which, where one business is able to secure a right that is cheap to acquire and awkward to dislodge, any number of businesses that compete with it are deprived of part of their freedom to operate. The high aspirations contained in the quoted paragraph are laudable in themselves, but what they mean at ground level, to innovators, manufacturers, distributors and consumers, is what counts.

Liens over electronic data: Court of Appeal to rule

Via the PLC subscription service comes information concerning a 4 October 2013 ruling of the Court of Appeal, England and Wales, Your Response Ltd v Datateam Business Media Ltd [2013] EWCA Civ 1468, on an issue of considerable importance. The Court gave leave to appeal from a County Court judgment in which a counterclaim against a database maintenance service provider was dismissed and the defendant, a former customer, was ordered to pay money due to the provider under outstanding invoices. The proceedings were based on a service provision contract and arose partly from a dispute over the length of the notice period that had to be given to terminate the agreement.

Of particular interest is the comment of Lady Justice Arden that one issue that was worthy of further consideration by the court was whether a service provider can claim a lien over electronic data which it manages for a client. As yet there is no authority to the effect that a lien was exercisable over intangible property.

This blogger suspects that this issue will already have been considered in the United States, and wonders if our US readers can shed any light on the theory and practice of liens over electronic data.

Friday 22 November 2013

Film funding in Europe: a new Communication

If only ...
The European Commission has now adopted a new Communication on state aid for films and other audiovisual works, to replace the Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on certain legal aspects relating to cinematographic and other audiovisual works (here).

The 2013 version updates the 2001 Cinema Communication by extending the scope of activities which it covers, introducing a higher maximum aid intensity level for cross-border productions and providing for the protection of and access to film heritage. A more digital-friendly, document, it also revises the rules relating to the imposition of territorial spending obligations, while continuing to allow such obligations to be imposed. The new Communication is now in force, having been published in the Official Journal.

Source: European Commission press release here.

Monday 18 November 2013

Banking on IP? Full report now available

Thanks to Kelvin King (Valuation Consulting Co Ltd, London), we now have a link to the full and unexpurgated version of Banking on IP? The role of intellectual property and intangible assets in facilitating business finance. This is the Final report and it runs to just over 220 pages. You can check it out here. This very thorough and surprisingly readable report was commissioned from Kelvin King and Martin Brassell (Inngot) by the UK's Intellectual Property Office. The report concludes with 10 recommendations, which are worth reproducing below:
1. IP and intangibles must be identified during the financing process
If IP and intangibles are to be given any consideration within credit decision-making, tools to identify and describe the actual assets (not merely evidence of expenditure) need to be embedded within the lending process. Businesses must use them, and lenders must understand and take note of them.
This step will have the wider benefit of boosting IP awareness amongst the business community as a whole and will establish base data for the possible future use of IP as ‘full’ security.
The first steps are to provide a means for companies to identify the assets they own, and to build information on IP and intangibles into the templates companies use when presenting information to prospective funders.
2. The value in IP needs to be taken into account
Whilst immature markets mean that disposal of IP for value is not always straightforward, the most important step in harnessing IP is to acknowledge that its business value is not nil, and therefore requires active consideration within lending and investment decisions.
Robust approaches to determine the value of intangibles exist in the same way as for tangible property and are now included alongside them within the Royal Institute of Chartered Surveyors’ Red Book, regarded as a banking industry reference point.
The obstacle that must be addressed here is to demonstrate, reliably and repeatedly, how an SME’s ‘real’ IP and intangibles may deliver value which bears no relation to anything that may be called an intangible on their balance sheet; this generally only shows a sunk cost.
3. Due diligence guidelines can help to control costs
IP and intangibles that are worth something are, by definition, unique. Because the assets are not commodities, checks will be needed to create confidence that the ownership and quality of the IP and intangibles are understood, that they contribute to cashflow (particularly in the case of debt finance), and that their maturity is in line with what it would be reasonable to expect, given the development stage of the business.
These checks are unfamiliar to most lenders: investors are more practised at them, but it is clear that they too face challenges in obtaining and assessing appropriate data.
Guidelines will involve providing templates, training and/or access to professional advice at a cost lending margins can support, within a turnaround time that meets business requirements.
4. More effective charges should be part of the lending package
Once IP and intangibles are captured, assessed and verified, it becomes possible to create a proper and meaningful interest over them, beyond a simple floating charge. This is not happening at present; there is no real notice of these charges, leaving many lenders exposed to unnecessary risk.
Proper controls are an essential precondition if lenders are to place any reliance on the value inherent in IP and intangibles – which in turn benefits the borrower.
Legal templates and the resource toolkit will help lenders to achieve this at modest cost, firstly by providing appropriate wording for the instruments, and secondly by providing guidance on the procedures which must be followed when recording them to ensure their effectiveness.
5. IP markets and IP financing could be facilitated through infrastructure improvements
The development most likely to transform IP and intangibles as an asset class is the emergence of more transparent and accessible marketplaces where they can be traded. This is a domain where services must stand or fall on their commercial merits; however, the available infrastructure needs to support rather than impede their establishment. A parallel lies in the way value has been added, cost reduced and enforcement activity enhanced across a range of motoring-related services by facilitating access to data held by the Driver and Vehicle Licensing Agency.
As IP and intangibles become more clearly identified and are more freely licensed, bought and sold (together with or separate to the business), services available to register and track financial interests will need to be improved.
This is not a job for government - but solutions will require the co-operation of official registries and the establishment of administrative protocols.
6. On-going management of IP and intangibles should also be supported
IP does not stop being important once credit is granted. Despite being long established, the asset class is unfamiliar in the lending context. Businesses need to understand how to use and protect it so that risk is reduced. Financiers, too, will require assistance in motivating and monitoring appropriate activity; as examples, there could be a role for the introduction of ‘milestones’ within payment schedules (as commonly used in equity and venture debt) and periodic impairment tests.
The proposed toolkit needs to include measures to inform and encourage SMEs to adopt appropriate IP management practices.
7. Affordable risk mitigation strategies ae to be encouraged
Alongside certain guarantees, access to appropriate insurance policies to guard against unforeseen events could greatly increase banking confidence in adding further weight to IP and intangibles within the lending decision. Evidence provided to this report indicates there is private sector appetite to provide these solutions, if lenders are willing to create the demand.
More detailed dialogue on the requirements of both lenders and insurers is urgently required, to ensure that commercial sector activity is able to provide workable and affordable solutions.
8. Asset-based finance techniques should be adapted for IP and intangibles
Recent financial upheavals have triggered something of a return to first principles in lending and a greater emphasis on assets for business finance (reflected, for example, in ‘challenger’ bank activity). This greater emphasis on assets needs to be extended to include IP.
Alongside mainstream lending, where EFG is an obvious area of focus, asset-based and alternative financing methods should be prioritised for IP-backed finance interventions; these are the parts of the industry most accustomed to understanding and assessing individual assets and their value.
9. Steps to stimulate private investment need closer study
IP rights can be well suited to securitisation (patents, trade marks, registered designs and copyright portfolios). Given the successful track record of venture debt, more work is needed to understand onshore and offshore fund appetite to support investment in IP-rich companies, working with managers that have the necessary expertise.
This work fell outside the scope of the current IP and finance project, but is clearly desirable as a follow-up stage.
10. IP demands joined-up thinking
The Intellectual Property Office exists “to promote innovation by providing a clear, accessible and widely understood IP system, which enables the economy and society to benefit from knowledge and ideas”. It therefore has an important role to play in scrutinising Government and finance industry initiatives to boost lending, to ensure that the assets produced by knowledge receive appropriate consideration.
As usual, readers' thoughts and comments are warmly welcomed.

Saturday 16 November 2013

Eva Cassidy profits: another exercise in how not to do it?

The 1709 Blog has posted this note on Straw & Another v Jennings & Others [2013] EWHC 3290 (Ch), a long judgment (369 paragraph) from the Chancery Division of the High Court, England and Wales, by Mr Justice Warren, dating from the beginning of this month.

In this action the claimants, the exclusive licensees of musical recordings of the late American singer Eva Cassidy, claimed £1.6 million from four defendant companies, alleging that they had failed to account for distribution profits owed due under a distribution agreement. The defendants denied the claims and counterclaimed for copyright infringement.

Relatively little of this judgment is taken up by copyright law; the majority deals with the effect of an amended distribution agreement, the nature of the obligation to account for income, identifying the relevant accounting periods, the availability of deductions and sundry related issues.

This blogger continues to be surprised at the extent to which commercial contracts for the licensing of IP rights continue to lack key provisions, requiring one or other party to exercise a good deal of imagination, generally in vain, in trying to persuade a court to imply into it a term which the parties never stated and without which the contract still seems to make reasonable sense.

Friday 15 November 2013

Absurd (F)RAND licensing-rate determinations for SEPs

I have submitted many articles to IP Finance over the last couple of years as a "guest" contributor. I would like to thank Jeremy Phillips for inviting me to do so, and posting my articles for me with all the editing and production work entailed. This is my first IP Finance posting as a "resident" contributor.
Absurd (F)RAND licensing-rate determinations for SEPs

Judge James L. Robart's findings in the case between Microsoft and Motorola, which issued in April 2013, represent the first U.S. judicial attempt to determine reasonable and non-discriminatory licensing fees. Most recently, Judge James F. Holderman has also had a go in his royalty rate opinion in the Innovatio case. The judges’ rate setting applies only to standard-essential patent technologies in H.264 video and 802.11 WiFi. In my opinion, the rates set in both cases are defectively based and unreasonably low.


Rate-setting in SEP licensing
The judges’ decisions are both based on the faulty dictum that patentees are entitled only to a small proportion of standard-essential patent value. Valuation methods selected unsurprisingly reflect that predisposition. The judgements significantly rely on the defective notion that SEP-owners’ rewards should only reflect “intrinsic value” of technologies, and that they should be deprived a proportion of the value that comes through standardisation including “network effects.” Core technology developers deserve to share in the economic benefits of standardisation because of the significant costs and risks in developing, proposing and integrating their technologies. That has been the basis for investment and market success so far.

Patent pools and chipset profits used by Judges Robart and Holderman respectively provide biased and misleading benchmarks for (F)RAND royalties. The judges identify some major limitations in using patent pools while seeming oblivious to other pitfalls. Judge Robart ill-advisedly uses pools because participants are mainly implementers who tend to be most interested in keeping their royalty costs low. Those with the most valuable patents tend to steer clear. Judge Holderman latches onto an alternative approach, based on silicon chip component manufacturer profits, that is also deeply flawed, while taking comfort from choosing a reasonable royalty rate that falls within the range established for the same standard by Judge Robart. Licensing rates on ICT products commonly apply across the entire product because value is delivered and enjoyed on that basis. They have little to do with and should not be limited to profits on chips.

My full analysis is a rather lengthier 24 pages. Those with the interest and stomach for it can find it in full here as a PDF document.

Thursday 14 November 2013

WIPO report pins dollars and cents to brand spend, strategy

WIPO's latest media release, "New Report Explores Role of Branding in Global Economy & Within Innovation Ecosystem", has just been issued today. It reads:
"Companies around the globe have spent nearly a half-trillion US dollars (USD) annually on branding, exceeding outlays on research and development and design while accounting in some countries for up to a quarter of firms’ overall investments in intangible assets.

WIPO’s second “World Intellectual Property Report” entitled “Brands: Reputation and Image in the Global Marketplace” offers fresh data, analysis and insight into how companies use brands to differentiate their products from those of their rivals - and what the growing use of brands means for consumers, market competition, and innovation. ...

According to the report, companies invested some USD $466 billion globally on branding in 2011, the latest year for which there are reliable data. This figure would be even higher if spending on strategic marketing, corporate communications, other bought-in services that contribute to brand perception, as well as company-internal expenditures on branding were also considered [it's difficult to see why in principle these items should be excluded since they are inextricably woven into brand spend in so many sectors -- but it's equally difficult to apportion them clearly between brand- and non-brand functions]. Fuller data for the US, which accounts for all branding expenditures, show that investment in branding stands at USD $340 billion in 2010 for the US alone - twice as much as previous incomplete estimates. This exceeds US companies’ investments in R&D or design, and accounts for a quarter of their intangible asset investments.

While branding investments correlate closely with the level of economic development around the world, rapidly growing middle-income economies such as China and India today invest more in branding than high-income economies did when they were at a comparable development stage [What can we make of this comparison? There are now far more outlets for brand spend now than there were when high-income economies were at the same development stage, and China's and India's proportional spend on labour and tangible business assets is incomparably lower].

The report shows that the average brand value of companies based in middle-income economies has grown faster than that of companies in high-income economies. In fact, the share of middle-income economies in the total value of the top 500 brands increased from 6 percent to 9 percent between 2009 and 2013.

The report also explores the role of the trademark system in supporting the branding activities of firms. Trademarks are the most widely used form of registered intellectual property (IP) throughout the world. Many low- and middle-income countries see companies intensively file for trademarks, even if they make comparatively less use of other IP forms.

Trademark demand quadrupled between 1985 and 2011, from just under 1 million applications per year in 1985 to 4.2 million by 2011. While high-income economies for which data are available increased their trademark filing intensity relative to GDP by a factor of 1.6 between 1985 and 2011, middle-income economies increased it by a factor of 2.6 during this period. Indeed, in 2001, China’s trademark office had become the top recipient of trademark filings – a position China gained in patent filings ten years later, in 2011.

Looking at trademark institutions, the report argues for policies that promote accessibility to the trademark system, while balancing the interests of right holders and those of third parties. In addition, it highlights the risk of “trademark cluttering” – the registries of national trademark offices growing to the point where there’s a diminished availability of names and other signs for new trademarks.

The report looked at other other policy matters, including whether registration of a trademark should be conditional on the applicant usage of a trademark. Also, to what degree offices should examine whether new applications pose a conflict with earlier trademarks in different ownership.

In a wider perspective, the report explores how companies’ branding strategies interact with their overall innovation strategies. Through branding, companies can increase the demand for their products and enhance the willingness of consumers to pay for them. Evidence shows that branding is one of the most important mechanisms for firms to secure returns on product innovation.

Finally, the report looks at situations where strong brands create barriers to market entry, highlighting the role of brands in assessing the competitive effects of mergers and acquisitions, as well as “vertical” arrangements between manufacturers and distributors [this is the sting-in-the-tail bit which competition authorities and policy shapers will be avidly digging into.  Is is the brand that creates the barrier to market entry, or the consumer's choice ...?]".
You can download the report in its entirety via this link.

Wednesday 13 November 2013

National Council of Entrepreneurial Tech Transfer Free (!) Online Research Commercialization Course

The National Council of Entrepreneurial Tech Transfer (NCET2) is offering a free 10-lecture online course titled, “Research Commercialization Introductory Course.”  The course is co-sponsored by the U.S. Department of Homeland Security, National Institutes of Health, National Institute of Standards and Technology, National Academy of Inventors and the National Science Foundation. The course is “designed to help science and engineering researchers better understand how research commercialization works. Over 5000 students, faculty and researchers from across the US have taken this course since it's been offered.”  The course is further described as:

Research commercialization involves taking articles, documentation, know-how, patents, and copyrights, which are created during research activities and getting them to users and patients for real societal impacts. In some cases, commercialization involved taking patents based on the research and licensing them to a company. This usually involves also having the researchers consult to the company. In other cases, commercialization involves forming of creating a startup and applying to federally funded commercialization programs. In all cases, though, research commercialization typically involves defining the nature of the research being commercialized (e.g., in a patent or intellectual property agreement), establishing a commercial relationship with another party (e.g., employment, a sale or license), and negotiating a contract (e.g., compensation).

Areas covered in the course include intellectual property, patents, copyrights, trade secrets, trademarks, licensing agreements, employment agreements, consulting agreements, tech transfer, creating and funding companies, and federally funded Small Business Innovation Research (SBIR) programs

Each lecture is a live 90-minute online class with Q&A.

Here is the course schedule:

CLASS SCHEDULE
Lecture 1: Patents
Thursday, November 14, 2013 , 1:00 to 2:30 pm ET
Lecture 2: The Importance of Commercializing Research
Friday, November 15, 2013 , 1:00 to 2:30 pm ET
Lecture 3: Copyright, Trademarks and Trade Secrets
Tuesday, November 19, 2013 , 1:00 to 2:30 pm ET
Lecture 4: Employment and Consulting Agreements
Thursday, November 21, 2013 , 1:00 to 2:30 pm ET
Lecture 5: Tech Transfer and Licensing Agreements
Tuesday, November 26, 2013 , 1:00 to 2:30 pm ET
Lecture 6: Small Business Innovation Research (SBIR) Grants
Monday, December 2, 2013 , 1:00 to 2:30 pm ET
Lecture 7: Introduction to Early Stage Funding
Wednesday, December 4, 2013 , 1:00 to 2:30 pm ET
Lecture 8: Introduction to Structuring and Leading the Research-Intensive Company
Friday, December 6, 2013 , 1:00 to 2:30 pm ET
Lecture 9: Moving from R&D to Manufacturing
Monday, December 9, 2013 , 1:00 to 2:30 pm ET
Lecture 10: View from the Trenches: Applying what you have Learned
Thursday, December 12, 2013 , 1:00 to 2:30 pm ET


This looks like a great program and you can’t beat the price of “free.”  For more information about the course and to register, see here.  (Hat tip to Steven Ferguson at the National Institutes of Health).

Monday 11 November 2013

Generating value from patents: a conference report

The second session of today's  'From IP to NP'conference, organised by the Israel branch of the AIPPI, offered a break-out section on "Generating Value from Patents", convened by Ilan Cohn (Senior Partner, Reinhold Cohn Group, Israel) and Andrew Ramer (Co-Founder and Chief Executive Officer of Marqera).

First to speak was Eran Zur (Head of the Intellectual Property Finance Group, Fortress Investment [the firm supporting controversial European is-it-a-troll IPCom GmbH]), on "Leveraging your IP: An alternative to patent monetization".  Said Eran, the value of a patent is based on its enforceability; by selling one, you may receive cash but you lose the opportunities and flexibilities in changing the behaviour of competitors that patents offer.  For small companies, litigation is always risky and dangerous: Google bought Motorola for its patents: if a small operating patent owner sues Google, its obvious response is to turn its patents on the threatener.

Fortress does not take equity: it's a debt provider that furnishes a lifeline for small debt-heavy companies by taking a lien over their patents ahead of litigation. If the client company wins, it gets its patents back; if it doesn't, Fortress will seek to monetise the value of those patents and share the yield with the client company.  Said Eran, we help clients leverage their patents by mortgaging them, rather than by suing on them.  If an infringement claim is good and Fortress underwrites it, no contingency payments are incurred. He concluded by observing that Fortress has a pet peeve about patent brokers and patent contingency fee lawyers, who make so much money from other people's patents.

Andrew Ramer (Co-Founder and Chief Executive Officer of patent brokerage Marqera) spoke next, on "The evolution of patent commercialization options". He observed that, in the innovation finance ecosystem, there's very little innovation.  However, there are very large sums of money at stake when patent portfolios are at stake -- and patents are increasingly not seen as being tied to a particular product; they are now being viewed as assets in their own right.  The past eight years, in patent transaction terms, have seen a change from an inability to do almost anything to an ability to achieve a great deal.

Andrew listed the classic possibilities for each patents: sell, license, litigate or build a company. That's great, but each of these options is available for every patent owner.  In this context, trolls are no big deal: what's the problem? If there are no trolls, there's no market. And if you can't sue, why buy? Andrew then waxed lyrical on the US Supreme Court decisions in eBay v MercExchange and Medimmune v Genentech and the impact of those decisions on the value of patents and the development of the asset market. Now people are buying a few patents, putting them into a corporate shell, going public and making a fortune.

Barry Schindler (Greenberg Traurig, USA) then tackled "Building patent value from the start: global patent strategies". As a patent lawyer, he explained that it was important to consider patents as individual assets in order to understand their asset value, and that's what patent lawyers are for.  This means looking at the patent's claims: everything starts and ends with them. Also look at the extent to which that patent is cited and used as a reference in other patents.  What about patent types? Sectoral spin-off should be understood: for example, a software programme developed for use in the pharmaceutical sector may be applicable outside it too.  Within each patent too, the number of claims can be multiplied so as effectively to embrace several inventions in one go.

Barry then listed various offensive pre-grant strategies, taking account of expedited examination, non-publication requests in the US and the patent prosecution highway, it being important to avoid the worst-case scenario of publishing one's invention and then not getting a patent.  Defensive strategies include the submission of third-party statements that point to published prior art.  Post-grant strategies were reviewed too, bearing in mind that it's far more difficult to knock out a killer claim when it's spread across a number of patents, given the cost.

Even without paying for
SEPS, you can still make
telephones
Last to speak was Koenraad Wuyts (Head of the Intellectual Property Group, Royal KPN), on "The evolution of FRAND options". If you have a patent for a standard [ie a 'standard-essential patent', or SEP], Koenraad noted, you get business pretty well from the beginning -- which makes them highly attractive. They do however cause patent pools with stacked royalties [where a licensee pays aggregated royalties to lots of different patent owners], and patent owners are selling their SEPs to patent trolls.  Does this mean that profitable patenting will not exist from the 4G generation? Capping of royalties per product is one possible solution.

Koenraad then reviewed some case law from the Netherlands and Germany, in which it has been shown that injunctive relief may be available to a patent owner even when a patent has been offered for FRAND licensing -- and that interim relief may be obtained where there is no indication that the defendant was seriously intending to take a FRAND licence. The outcome of the reference to the Court of Justice of the European Union in the Orange Book case is keenly awaited.