IPBC Global 2015: Conference report III

For a conference session on IP and
business, held in the Gold Ballroom,
what could be a better symbol?

"Small, but perfectly formed" was the title of the first post-prandial breakout session of the IPBC Global 2015 event [for the two morning sessions, click here and here]. 

Moderator Jack Ellis, Asia editor, Intellectual Asset Management, opened the session by apologising for the loss of Erin-Michael Gill, CEO, Synthos Technologies, who was billed to speak, and then introducing Gerard Eldering (InnovateTech Ventures). Gerard's company has been involved in the launch of 17 start-up companies. Five have failed (three through lack of funding during the recession), while the other 12 are still going strong.  Less than one percent of high tech companies actually get venture capital support. Some don't need it or manage without it -- and almost all don't understand patents very well, he added. Most start-ups are "IP-ignorant" and don't think heavily about patents; even if they know about patents, the building of a patent/IP portfolio tends to lurk at the back of their minds.  Other start-ups are "IP-crazy" and are so focused on their patent filing that market research and product development get left behind and their capital is absorbed in patent filing. 

Speaking in general terms, Gerard indicated that the number of start-ups that successfully emerge from the university sector is relatively low when compared with the large number of patents filed, maybe around 250 start-ups a year. Few if any emerge with the profile of the "ideal start-up", with a good balance in terms of time, effort and commitment in furthering their research, developing products and protecting their IP. The emergence of a start-up creates a good opportunity space in which support can be offered.

Recruitment is still competitive, but a bit
less controversial than it used to be ...

Next up was Christopher Adamson (Managing partner, Adamson & Partners Ltd), an IP recruitment specialist who has taken an interest in recruiting not merely lawyers but all IP talent, including IP managers and development team members. Said Christopher, what's needed is a combination of the right team and the right strategy, which poses both commercial and other challenges for small companies. Skills that a small or medium sized business must be able to access include

• IP creation: technical skill, knowledge of the technical field of application
• IP commercialisation: business development and people skills
• Litigation: this does not exclude people skills
• IP policy and standards: this includes an ability to deal with regulatory issues.

IP professionals like stability and prefer it to change, which can make it difficult to recruit them. People who already have good and interesting jobs in secure niches can be hard to shift.  However, small companies offer attractions too: diversity of workload, the speed at which a business grows, more responsibility and a greater chance to own part of the company, and the satisfaction of feeling that you have really made an impact.

Promising to keep us all awake, Michael Gulliford (Founder and managing principal, Soryn IP Group) told us how he left legal practice to found an IP management company, implementing patent management strategies for the today's ever-changing world. What does it take to succeed today, he asked. The answers are as follows:

Alternative fee structures
are attractive for clients,
but not always for lawyers

• Sound portfolio construction: portfolios mustn't be allowed to take on a life of their own. It's important for businesses to make sure that their patents protect their own technology. Often a company's interesting IP doesn't fit its actual activity, but good tangential ideas from the technical staff should be monitored and evaluated. It's helpful to know where your IP lies in relation to your competitors' activities and how much you are spending on it. A realistic balance should be struck between quality and quantity in a patent portfolio;
• Sound portfolio management: selling, licensing and litigation are the three ways of gaining value from one's IP. 99% of patents on sale are of little interest to anyone, and friendly licensing is rarely an option for smaller entities. In today's environment it's very tough, especially for small software companies. Are there alternatives to sale, licensing and litigation? IP-based debt financing is one; royalty monetisation (ie selling royalty streams) is another;
• Building the right team: small companies will need the input of (i) IP strategists, (ii) entrepreneurial counsel [ie happy to accept contingency fees or "alternative fee structures", if "happy" is the right word ...] and (iiii) financial partners/litigation funders. The size of settlements is contentious here, since low settlements and licensing deals, bad litigation finance deals and poor lump-sum settlements can have long-term adverse consequences.

Filling in for Erin-Michael was Anders Arvidsson (GN Store Nord), who spoke on his own company's history as a telegraph cable laying company (going back to 1869) and strategy. The company has diversified into many communications-related markets, being the world's fourth-largest maker of hearing instruments. Anders outlined GNSN's strategy for innovation and sustainable growth, which has benefited from small, incremental innovative steps where there is less of an attempt to create new markets and more of a focus on better, cheaper manufacture. This approach is profitable but ultimately vulnerable to disruptive innovations which undermine a long-established product. This in turn suggests that a broader scope of technological focus is required, whether developed by the company or placed on its shopping list for acquisition from others.