Purdue Research Foundation receives US $100 Million in Pharma Deal

The Purdue (University) Research Foundation has received US $100 million in a royalty monetization deal.  The Press Release from the Research Foundation states:

WEST LAFAYETTE, Ind. and NEW YORK, April 26, 2023 (GLOBE NEWSWIRE) -- Purdue Research Foundation, a private not-for-profit institute to advance the research of Purdue University, has received more than $100 million from Owl Rock, a division of Blue Owl Capital, for a portion of its royalty interest in Pluvicto (Lutetium 177Lu vipivotide tetraxetan). Purdue Research Foundation secured rights to royalties from Pluvicto as a result of Purdue’s license agreement with Endocyte Corp., which was acquired by Novartis in 2018.

This transaction helps Purdue Research Foundation advance its mission of investing in Purdue University’s innovative technologies and supports the university’s advancement.

Pluvicto is a radioligand therapy indicated to treat patients with metastatic castration-resistant prostate cancer who have failed multiple prior therapies. The therapy is also in development to treat prostate cancer in earlier lines of therapy.

"We feel privileged that the agreement with Blue Owl further strengthens Purdue's ability to support Purdue researchers and alumni through enhanced commercialization programs and funding opportunities,” said Brooke Beier, Senior Vice President of Purdue Innovates. “Purdue University researchers discover and develop innovations improving the world, one of the key aspects of a land-grant university. Pluvicto is one example of successful intellectual property protection, licensing and, ultimately, commercialization that we hope will unlock the potential for many more Purdue technologies to make an impact."

Sandip Agarwala, Managing Director and Global Head of Life Sciences, Blue Owl, said: “We are excited to partner with Purdue Research Foundation to assist it in fulfilling its mission of advancing technologies developed at Purdue University. Royalty transactions are a key component of Blue Owl’s broad and flexible investment strategy in the life sciences, and we see Pluvicto as a paradigm-shifting therapy for the treatment of patients with metastatic castration-resistant prostate cancer with blockbuster potential. We are encouraged to see the FDA expeditiously approving Novartis’ Milburn facility to help get this much-needed therapy to more patients.”

SVB Securities acted as PRF’s exclusive financial advisor, Foley Hoag LLP served as special counsel to PRF, and Ricardo Moran of Schwegman Lundberg & Woessner, P.A., served as IP counsel to PRF for the royalty monetization. Ice Miller LLP and Cooley LLP acted as legal advisors to Blue Owl.

Purdue University President Mung Chiang said the royalty interest agreement with Blue Owl Capital strengthens the university’s global reputation in several ways.

“First, the income will add funds for leading-edge research and development of life-saving pharmaceuticals in units such as Department of Chemistry and Purdue Institute for Cancer Research,” he said. “Second, the agreement underscores the impact of the work of legendary Purdue innovator Philip Low, Purdue University’s Presidential Scholar for Drug Discovery and the Ralph C. Corley Distinguished Professor of Chemistry. The initial research into the precision targeted therapy began in his laboratory. And this latest success of Purdue invention demonstrates the promises of Purdue Innovates, the initiative that Purdue and PRF launched this month to further support Boilermaker inventors and entrepreneurs.”

IP Evolution: a chance to talk

This morning, in The Andaz Studio (a rather smart and revamped meeting room in what used at one time to be a station hotel next to London's Liverpool Street Station), a group of IP enthusiasts, administrators, owners, practitioners and monetisers came together at the invitation of AISTEMOS (on which, see earlier post here) to discuss the evolution of strategy for dealing with IP as an asset class while eating a sumptuous buffet breakfast.

With AISTEMOS CEO Nigel Swycher in the chair, Sir Robin Jacob (head of IBIL, UCL) opened the discussion by asking whether IP monetisation and its treatment as an asset class is actually such a new topic, adding some critical comments concerning the "toxic mixture" of factors that make not just patent litigation (a major driver of IP monetisation) but all litigation such big business in the United States. These comments triggered a variety of responses. Larry Cohen (Latham & Watkins) thought it easier now to raise money on the strength of ideas, though it's still true that those who need the money don't know where to go for it while those who have the money have too little idea as to how to evaluate the worth of an idea-based loan. This lack of knowledge of IP on the part of lenders, if excusable since the banking community has more to deal with than merely IP, was emphasised.

Tony Clayton (Chief Economist, UK Intellectual Property Office, which published its Banking on IP report last November) then spoke of the problem he had identified, which is not one of starting up new innovation-based businesses but one of scaling them up. In the Far East we've seen state-sponsored capital being made available, but the preference of the UK was for private sector finance. Topics raised here included the presentation of information at the point at which a loan was sought, the difference between one-patent-per-product industries and those which are more complex. The use of Big Data to unravel these complexities was advocated -- bearing in mind that machines can deal with data, but they can't understand it. Should people who make decision on the basis of data analytics be fired? That's an overstatement, but those self-same analytics can take away jobs by doing the unintelligent tasks and leaving only the intelligent tasks to IP decision-makers.

Following a short break for the purpose of replenishing empty plates and then not-so-empty stomachs, the discussion resumed, opened  again by Sir Robin.

Could we ever imagine a free market for IP, just like art, precious commodities or pork bellies? Businesses like Ocean Tomo were founded on the assumption that there could be, but the occasional auction sale or publicised transaction hasn't yet been scaled up?

Tony Clayton pointed out that this is already being done for the copyright industries with the Digital Copyright Exchange: so far, things have gone slowly [this blogger wonders whether there should be some reference to the Copyright Hub here], but the trick is to persuade people who own the copyright that there is a market for their copyright properties. By taking a non-transparent, short-term position, they are hampering the growth of the market.  Roger Burt added that there are two very different types of market for IP: one is for IP that people want to use, like essential technologies governed by FRAND terms, and one is for IP that people don't apparently want to use.

Risk: a game for some, but a matter
of life or death for an IP-owning business

The discussion then turned to the strategic use of patents in litigation, and the vulnerability of single-patent and one-patent-per-product businesses to legal threats to the validity of their registered right. The role of insurance was raised here, with some actual figures being bandied around in place of the usual generalisations about how cheap or expensive IP insurance is.  The insurance industry hasn't been reacting too well to IP, largely because of the lack of reliable data: when any IP insurance premium is calculated, much effort goes into enumerating and evaluating the many risk factors; added to this is the cost of running a due diligence exercise on an insurable prospect. With better data, insurance companies can offer better value in their policies.

Is there any catalyst that might spark a sudden IP revolution in terms of valuation and funding decisions? No, said Tony Clayton, the process will be evolutionary, as demonstrated examples of successful IP-backed loans and ventures will encourage more lenders to commit their funds.  Robert Sumroy (Slaughter and May) added that one of the problems is that we love complexity: our law is not unlike the Babylonian Talmud in its complexity, and it's enjoyable to discuss and analyse that complexity -- but that's something that has to be overcome when selling the notion of IP to those who need to know about it but do not practise it.

Tony Clayton next observed that banks are more interested in getting money back after they have lent it than in gaining a security which they can dispose of if the loan is not repaid. The quality of the patent and an understanding of it are not much use in this regard. Roger Burt supported this: the borrower's business plan is key and (as Larry Cohen observed) it's not merely the quality of the business plan but the quality of its execution that counts.

Sir Robin closed the breakfast by saying he'd never participated in a meeting quite like this. Neither had we, and a good time was had by all.

Who are the “Good” “Trolls”? Or, How to Monetize Well?

This blog, in the past, has discussed the merits of so-called “patent trolls” or patent assertion entities (PAEs), here, here and here.  For sure, some PAEs or "trolls" provide a helpful service for firms, universities and some inventors without the wherewithal to enforce their patents.  And, defining exactly what is a “troll” may be a difficult task.  But, are all PAEs and “trolls” the same?  Are there good PAEs and “trolls”, and bad PAEs and “trolls”?  How do you tell the difference?  Joe Beyers and Wayne P. Sobon (both of Inventergy) recently published an article on Corporate Counsel titled, “Do’s and Don’ts of Corporate Patent Monetization.”  The article helpfully explains why patent owners should beware the bad “trolls” or PAEs and should partner with the good “trolls” or PAEs.  Why should they be concerned?  The authors wisely state that protection of the brand is paramount.  Association with a “bad” PAE or “troll” could reflect negatively upon the patent owner.  The authors provide a list of criteria for choosing a “licensing partner”.  Here are the “Don’ts”:

1. DON’T choose a licensor with a reputation for acquiring poor-quality patents and quickly suing.

2. DON’T select a licensor with a history of settling claims for a lot less than the cost of litigation (i.e., “nuisance fees”).

3. DON’T work with a licensor that sends widespread demand letters to multiple companies with little or no evidence that its patents are being infringed.

4. DON’T use a licensor that’s been the subject of any state actions or consent decrees, or has been forced to pay an opposing party’s attorneys’ fees.

5. DON’T partner with a licensor that operates behind hidden shell companies or otherwise has a reputation for abusive patent assertion behavior.

Here are the Do’s:

1. DO select a licensor that has made a public commitment to transparency and ethical business practices—and then speak with its licensees to confirm that this commitment is genuine in deed as well as word.

2. DO work with a licensor that seeks licenses only from appropriate companies (rather than startups or small retail businesses), and that comes to negotiations with substantive claim charts and other evidence of use.

3. DO choose a licensor that selects, owns and manages high-quality patent assets developed by global operating companies with reputations for innovation, like you.

4. DO use a licensor that takes active steps and commits material resources to ensure the quality of its patents, and vets them prior to licensing.

5. DO ensure that members of the licensor’s executive team have product or service company experience, and understand the needs and concerns of companies like yours regarding patent value creation.

This brings me to my next question.  Well readers, who are the “good” “PAEs” or “trolls”?  Please name them.  

I suppose maybe there are no “trolls”--just naughty behavior. 

Best Practices in IP 2013: the monetisation session

Following Jonathan Taub's keynote speech, today's "Best Practices in IP 2013" conference continued with a panel session featuring Paul Lerner (WiLAN), Naftali Levy (Alvarion), Ilan Ben David (Genoa Color), Zvi Marom (BATM), Steven Steger (Global IP Law Group) and Naomi Assia (Naomi Assia Law Offices). Moderator Monte Silver handled this session as a Q and A as follows:

Q. Whatever happened to Nortel?
Steven Steger: after Nortel became bankrupt its only major asset was its IP portfolio -- and no portfolio of that magnitude had gone up for sale before. Nortel had the opportunity to become a licensing company or to sell up.  Given that the biggest players in the mobile technology sector were young, patent-naked companies, the option of selling Nortel's incredibly unencumbered portfolio was too good to miss. Once Google indicated that it was prepared to pay $900 million, that raised a great deal of interest in acquiring the patents -- which ultimately sold to $4.5 billion.

Q. What makes a patent valuable?
Paul Lerner: lots of things. It may be useful for litigating, exploiting or using defensively.  In each case its value will be different.  As a patent litigator, the value to me is what I expect to make by enforcing that patent.

Ilan Ben David: when people have a defensive or offensive marketing strategy, they will buy a technology rather than just the patents. However, once the objective is enforcement, all the interest is in an allegedly infringed patent -- you can't expect to sell an entire technology portfolio and perhaps not even its uninfringed patents.

Naftali Levy: the value of patents is not always apparent, even in the course of litigation. As an in-house manager, one has to know the status of each patent in standards-related technology.

Q. How do you decide what to do with your resources: when do you invest in R&D, litigation or just sell up?
Zvi Marom: there is always a limit to the amount one can invest in patents at the R&D stage, before patents for new products are filed. As a start-up, it's also useful to guard one's flow of revenue by getting the big guys to protect you against the risks and costs of patent litigation. Investment in protecting patent rights in countries that (at the mildest) have no respect for patent rights must also be taken into account. One has to put all possible expenses into a "witches' brew" and see what comes out.

Naomi Assia: it's good for start-ups to focus not just on the fact that they have a couple of patents but on the potential for monetisation in the future.

Q. What is a non-core asset and when do you sell it?
Zvi Marom: (i) an asset that is not capable of generating 10% of one's income and it's not so new; (iii) when you can sell it to someone other than a competitor.

Marathon Patent Group – The Hot Bet?

Apparently since around mid-November of last year, Marathon Patent Group (MPG) evolved from American Strategic Minerals and discarded its mineral and real estate assets in favor of an IP management and enforcement services business model.  MPG has been very, very active since then and has received quite a bit of (mostly positive) press (here, here, here and here).  MPG detailed some of its activities in an April 25, 2013 report:

·         Acquired CyberFone Systems and its patent portfolio which has generated 32 settlement and license agreements for a total of $15.5 million in revenue

·         Acquired US Patent 5,331,637 from MOSAID Technologies, one of the world's leading intellectual property management companies

·         Entered into a strategic relationship with IP Navigation (IPNav), the leader in full-service patent monetization

·         Completed the acquisition of Sampo IP LLC acquiring its patent portfolio consisting of three patents and one pending patent application

·         Commenced our first licensing campaign on March 20, 2013 by filing a patent infringement lawsuit in the United States District Court for the Eastern District of Texas against Sony Computer Entertainment America LLC, Siemens Energy, Inc., CB Apex Realtors, d/b/a Coldwell Banker Apex Realtors, Blue Cross and Blue Shield Association, Juniper Networks, Inc., Winn Dixie Stores, Inc., and Dell, Inc.

·         Established a new IP Research and Services Center at the University of Arizona Science & Technology Park in Tucson, Arizona . . . .

Since April 25, 2013, MPG has also, through its subsidiaries, filed patent infringement lawsuits against Ambit Energy Holdings LLC, BMC Software Inc., HomeAway Inc., Hoover's Inc. and Ristken Software in the Eastern District of Texas; Thompson Reuters in the District of Delaware; Sprint Nextel Corporation, Juniper Networks, Cisco Systems, Bloomberg L.P., Hitachi Cable America, D-Link Corporation, Avaya, Hewlett-Packard Company, Enterasys Networks, Extreme Networks, TIBCO Software, BT Group, SAVVIS Inc., Zhone Technologies, Huawei Technologies, Allied Telesis, and Adtran in the District of Delaware;  and E*Trade Financial Corporate Services Inc., Liberty Mutual Group Inc., Aetna Inc., Avon Products Inc., Starbucks Corporation, Yum! Brands Inc., Hewlett-Packard Company, and Alcatel-Lucent USA Inc. in the Eastern District of Texas. Like I mentioned before, MPG is getting a lot of press for its activity. 

Co-blogger Neil Wilkof recently raised the question about the interest of boards in questions concerning IP—and he expressly excluded an entity such as MPG.  An entity such as MPG, of course, is primarily concerned with IP and notably, patent expert Professor Craig Nard recently joined MPG's board of directors.  I think that the importance of IP will lead companies to move toward accessing the services of companies like MPG although presently MPG seems mostly (?) involved in the enforcement of its IP.   I also think more companies will seek to draw in more IP experts on their boards—including some professors.  Does anyone have a sense of whether companies are utilizing the valuation, auditing or related services of companies similar to MPG (although MPG may be a different breed according to Forbes)?  The Forbes article indicates that some companies may be doing just that with MPG.