IPVision Business Perspectives on Patents, Innovation, and Strategy

Incorporating IP into Corporate Decisions - IP Business Summit 2013

Info IPVision — Wed, 15 May 2013 20:03:00 GMT

IPVision executive Alex Butler leads a discussion on how IP can best be incorporated into corporate decisions at the Annual IP Business Summit coordinated by the Faber Center for Entrepreneurship at The USC Darla Moore School of Business and the National IP Taskforce.

Held outside of Charleston, SC May 30-31, the Summit also includes a unique 1/2-day work session focused upon the role of IP in creating value in the creative arts communities on May 29.

Advance Registration for the event is available at:

http://bit.ly/12v9rbN.

The IP Business Summit brings together senior corporate and economic leaders for a range of discussions focused upon the continuing emergence of intangible assets as a source of economic value and wealth across many sectors of industry.

Mr. Butler's discussion will focus on how leading companies are moving from thinking about IP as series of stand-alone legal rights to a portfolio of strategic corporate assets that can add value, mitigate risk (or introduce risk to others), and provide unique perspectives across supplier and customer value chains.

"Mapping and understanding the relationships between right holders in a field is a fundamental responsibility of management" indicates Mr. Butler. "Firms that do this well and on a proactive basis out-perform those who lag behind. Both in terms of competitive effectiveness and in the capital expended to address situations that arise and require immediate or after the fact attention."

Additional discussions on the central economic role that intellectual property rights play regionally, globally and at a company level will be led by Dr. Hildy Teegen Dean of the Moore School of Business, Dr. Steve Landefeld of the Bureau of Economic Advisors, Thomas Lundin, Principal IP Counsel of Phiips Intellectual Property & Standards, Florin Paun the Industrial Innovation Deputy Director at ONERA (often referred to as the French Aerospace Lab), amongst others.

The Darla Moore School of Business has a unique perspective both in supporting this event as it continues to expand upon its leadership role in incorporating intellectual property perspectives and strategy into its academic offerings. The local business and government communities recognize the importance of this trend and have joined in supporting this unique event. IPVision is pleased to support these efforts.

Additional information on the Moore School and its traditional academic, professional, executive and international programs is available at http://mooreschool.sc.edu/.

How Companies Value IP and Use it to Raise & Optimize Capital

Info IPVision — Mon, 13 May 2013 14:20:00 GMT

Capital Insights' Q2, 2013 issue interviewed IPVision executive Joe Hadzima for the article "Capturing the Imagination" which explores the increasing use of IP as a source of wealth and as a mechanism for companies to raise and optimize capital.

In the article, Capital Insights, a publication of Ernst & Young's Transaction Advisory Practice, explores key insights related to how:

Access the full Capital Insights Article

IP transactions will continue to elevate as a source of capital as more firms learn from the example of other companies, for example Alcatel-Lucent using IP to partly secure a US$2.7b refinancing package and large IP-driven transactions including patent sales and patent-centric M&A transactions such as Real Media's US$100m+ patent sale to Intel, AOL's $US$1b+ patent sale to Microsoft, or Google's US$12.5b acquisition of Motorola Mobility.

In addition to identifying three common valuation methods, the article describes five common methods used to generate cash through IP monetization: sale, license, litigation, corporate 'separation', and security for a loan. Each method has a unique risk and timing profile, one which IPVision routinely assists clients in evaluating during IP strategy support and portfolio assessments.

The article concludes with the telling perspective from Simon Pearson of Ernst & Young that "it's often difficult for a business to demonstrate the value of its IP to others when it's trying to make an informed decision... an external perspective can help you form an objective view about how IP may be valued and exploited."

IPVision's analytics and evidence-based IP portfolio assessments are a proven method to assist businesses in this process.

Art of the Deal: IP in Strategic Investments & Corporate Venture

Info IPVision — Mon, 06 May 2013 20:00:00 GMT

"Art of the Deal: IP in Strategic Investments and Corporate Venture" a recent web-based presentation and discussion by IPVision's Alex Butler and MIT's Dr. Val Livada is now available online.

In this engaging conversation, Val and Alex share high value perspectives on how organizations making strategic investments often miss the mark in their strategic due diligence. Drawing upon specific examples, the presentation illustrates that while financial discussions have improved over time. Strategic considerations and due diligence processes often are:

"Too Little"
"Too Late"
"Too Narrow"

In addition to helping strategic investors diagnose their current approach, Val and Alex offer specific recommendations on how to utilize analytics and data-supported decisions in technology investment processes and IP due diligence. These include, for example, a more sophisticated understanding of technology adoption cycles, how to better evaluate a technology (or market) value chain and the role that IP plays in shaping future value over time.

Moving from establishing a good transaction, the presentation shows how improved pre-transaction discussions and IP plans lay a solid-foundation upon which organizations can effectively manage investments over time to maximize value.

This recorded presentation is highly recommended for corporate strategy and venture executives and the legal and finance teams supporting those transactions.

Upcoming Webinar: Disruptive Technologies & Patent Strategy: Graphene Case Study

Info IPVision — Wed, 10 Apr 2013 16:15:00 GMT

Please join Fitch, Even, Tabin & Flannery LLP and IPVision for a complimentary webinar, "Disruptive Technologies and Patents: A Case Study of Graphene," presented by Steven G. Parmelee and Alex Butler.

The webinar will take place on Thursday, April 25, 2013, at 9:00 am PDT / 10:00 am MDT / 11:00 am CDT / 12:00 noon EDT.

A one-atom-thick sheet of carbon atoms arranged in a regular hexagonal pattern, graphene has earned headlines (e.g., "Graphene: Wonder Material of the 21st Century") as frequent and breathless as normally staid scientific reporters ever permit. The 2010 Nobel Prize in Physics, enormous government and private sector investments, and countless articles, research papers, and grants have sparked an avalanche of patent filings. Published U.S. patent filings, for example, increased tenfold over a short five-year window.

This webinar will address the following topics:

Patenting behaviors that anticipated room-temperature superconductors
A deep dive into the statistics of graphene patenting to date
Patenting options available to those currently working in the graphene field
What those not (yet) working in the graphene field need to know

CLE credit is pending in California and Illinois and has been approved for Nebraska. Other states may also award CLE credit. There is no fee to attend, but please note registration is required.

Our speakers will be Fitch Even partner Steven G. Parmelee and Alex Butler, Executive Vice President of IPVision.

Steve Parmelee is a patent attorney with over 30 years of experience and is a published author on white-space inventing. Alex Butler is an experienced executive and has spent over 15 years advising organizations in creating unique IP strategies across numerous technology areas.

IP Investment Conference, 2013 - IP Centric M&A

Info IPVision — Tue, 26 Mar 2013 14:01:00 GMT

IPVision's Alex Butler and executives from Goldman Sachs and Ropes & Gray will discuss Wall Street's view of IP and IP due diligence in patent centric M&A transactions. The event is hosted by Deal Flow Media on 4 April 2013 at the Westin Times Square in New York City.

The full agenda and registration is available at:

http://www.dealflowmedia.com/conferences/ip_investment_conference_2013/agenda.cfm

Key perspectives in the discussion will include "tactical" patent due diligence vs. "strategic" due diligence, the perspective of activist stakeholders, and how IP strategy and corporate strategy intersect when IP and patents are included.

http://www.dealflowmedia.com/conferences/ip_investment_conference_2013/agenda.cfm

Earlier (no cost) perspectives from Alex Butler and other panelists is available in a recorded webinar at: http://www.dealflowmedia.com/webinars/IP_Monetization.cfm

Graphene - Advanced Materials Patent Landscape Case Study

Info IPVision — Tue, 26 Mar 2013 03:30:00 GMT

Disruptive Technologies and Patents: A Case Study of Graphene

Please join IPVision and Fitch, Even, Tabin & Flannery LLP for a complimentary webinar, “Disruptive Technologies and Patents: A Case Study of Graphene,” presented by Steven G. Parmelee and Alex Butler. The webinar will take place on Thursday, April 25, 2013, at 9:00 am PDT / 10:00 am MDT / 11:00 am CDT / 12:00 noon EDT.

A one-atom-thick sheet of carbon atoms arranged in a regular hexagonal pattern, graphene has earned headlines (e.g., “Graphene: Wonder Material of the 21st Century”) as frequent and breathless as normally staid scientific reporters ever permit. The 2010 Nobel Prize in Physics, enormous government and private sector investments, and countless articles, research papers, and grants have sparked an avalanche of patent filings. Published U.S. filings, for example, increased tenfold over a short five-year window.

This webinar will address the following topics:

• Patenting behaviors that anticipated room-temperature superconductors
• A deep dive into the statistics of graphene patenting to date
• Patenting options available to those currently working in the graphene field
• What those not (yet) working in the graphene field need to know

Our speakers will be Fitch Even partner Steven G. Parmelee and Alex Butler, Executive Vice President of IPVision. Steve is a patent attorney with over 30 years of experience and is a published author on white-space inventing. Alex has spent over 15 years advising organizations in creating unique patent strategies across numerous technology areas.

CLE credit is pending in California, Illinois, and Nebraska. Other states may also award CLE credit.

There is no fee to attend, but please note registration is required. To reserve your seat, please REGISTER HERE.

Stephen Quake is the 2012 Lemelson-MIT Prize Winner

Joe Hadzima — Mon, 04 Jun 2012 11:37:00 GMT

The Lemelson-MIT Awards Committee today announced that Stephen Quake of Stanford University's Department of Bioengineering is the 2012 Winner of the $500,000 Lemelson-MIT Prize.

According to The Lemelson-MIT Program the Prize "recognizes individuals who translate their ideas into inventions and innovations that improve the world in which we live....Dubbed the "Oscar for Inventors," the Lemelson-MIT Prize is awarded to outstanding mid-career inventors who have developed a patented product or process of significant value to society, which has been adopted for practical use, or has a high probability of being adopted."

Professor Quake's group has pursued two main avenues of technology development in order to improve biological measurement techniques. The first has been the development of the biological equivalent of the integrated circuit: microfluidic large scale integration (LSI). The second technology avenue it has pursued for precision measurement is the development and application of ultra high throughput DNA sequencing technology."

Patent Portfolio Interconnection Map of Quake Patents

As of June 2012 Professor Quake was listed as an inventor on 86 issued U.S. patents and 79 published pending U.S. patent applications.

This IPVision Patent Portfolio Interconnection Map shows the U.S. patents and applications of Stephen Quake and the citation relationships within the portfolio. Note: Click on the Patent Map Image to View an Interactive Patent Map

The Quake patents have been cited by 647 other U.S. patents owned by over 200 companies and universities. These include 43 patents owned by Fluidigm Corporation (co-founded by Dr. Quake), 32 owned by Intel and 27 owned by The Invention Science Fund, managed by Intellectual Ventures LLC .

IPVision Report Provided to Lemelson-MIT Prize Committee

IPVision provided the Lemelson-MIT Prize Committee with patent analysis reports on each of the semi-finalist and finalist nominees for the 2012 Lemelson-MIT Prize. Obtain a free copy of the IPVision Patent Analysis Report on Stephen Quake.

Author: Joseph G. Hadzima, Jr. | Senior Lecturer, MIT Sloan School of Management | President of IPVision, Inc.

Patent Due Diligence in Patent Driven M&A - Perspectives from Google, JDS Uniphase and IPVision

Info IPVision — Tue, 06 Mar 2012 15:05:00 GMT

The forecasted development of intellectual property and patents as an asset class has arrived in the high technology sector. Increasingly, patent due diligence is now at the front end of M&A transactions.

On Tuesday, March 6, IPVision's Dr. Hoo-min Toong will join leading corporate IP counsel and seasoned professionals from Apple, Cisco, Google, Kodak, Intel, JDSU, Nortel and Yahoo, to discuss this trend in San Francisco at the PLI Seminar "IP-Driven M&A: The Revolution Has Arrived."

The core message of the session, as explained by Dr. Toong, is "don't waste time and money - use analytics and automation to gather the information needed." Panelists concurred that by "doing the basic analysis up front, you can remove much of the chaff and noise, so that expert (expensive) time can be spent on what matters most..."

From the broader program, key themes of to be discussed include:

The historical evolution of IP-driven M&A
The factors responsible for the recent shift in IP-driven M&A
The importance of market context
How traditional investment bankers look at IP-centric deals
The challenges of estimating risk-adjusted patent value
Best practices in diligence quality and the impact of large patent portfolios
What lays ahead: IP gold rush or patent bubble?

In respect to patent due diligence, key leaders from JDS Uniphase and Google will join IPVision's Dr. Toong to share insights and best practices, including

How to assess patent quality and risk: the use (and misuse) of software-based analytics.
Best practices in evaluating patent quality, impact and value?
How does a prospective patent buyer efficiently diligence a very large portfolio (i.e., thousand of patents)?
What should prospective buyers look for in an analytics platform?
How should buyers integrate automated and human patent analysis?

Specific examples to be reviewed during the panel include patent holdings of Motorola Mobility, Microsoft, Nortel (now owned by the Rockstar Bidco consortium), RIM and Apple.

Additional information on these examples and best practices is available upon request. These example documents and earlier IPVision blog articles on M&A, patent portfolio assessment and patent due diligence provide initial insights - let IPVision know if additional specific information or insights would be useful.

Intellectual Ventures Starts Its Patent Litigation Engine

Joe Hadzima — Thu, 14 Jul 2011 16:10:00 GMT

As reported by Robin Wauters in TechCrunch, Intellectual Ventures has filed suit against over a dozen companies, for patent infringement. The lawsuit was filed on July 11, 2011 in the U.S. District Court for the Western District of Washington state. Lawrence D. Graham of Black Lowe & Graham and Elliot Brown of Irell & Manella, LLP are listed as counsel for Intellectual Ventures.

Intellectual Ventures brought suit against the following companies: Hynix Semiconductor Inc.; Hynix Semiconductor America Inc.; Elpida Memory, Inc.; Elpida Memory (USA) Inc.; Acer, Inc.; Acer America Corp.; Adata Technology Co., Ltd.; Adata Technology (U.S.A.) Co., Ltd.; Asustek Computer Inc.; Asus Computer International Inc.; Dell, Inc.; Hewlett-Packard Company; Kingston Technology Co., Inc.; Logitech International S.A.; Logitech, Inc.; Pantech Co., Ltd.; Pantech Wireless, Inc.; Best Buy Co., Inc.; and Wal-Mart Stores, Inc

The IV Patents: Acquired from Cirrus Logic and Enhanced Memory Systems

Four of the five U.S. patents in these lawsuits were originally owned by Cirrus Logic and the fifth was originally owned by Enhanced Memory Systems, Inc. of Colorado Springs:

5982696	Memories with programmable address decoding and systems and methods using the same	Cirrus Logic
5963481	Embedded enhanced DRAM, and associated method	Enhanced Memory Systems, Inc.
5687132	Multiple-bank memory architecture and systems and methods using the same	Cirrus Logic
5654932	Memory devices with selectable access type and methods using the same	Cirrus Logic
5500819	Circuits, systems and methods for improving page accesses and block transfers in a memory system	Cirrus Logic

Patent Landscape Map of Lawsuit Patents

This Multi-Patent Landscape Map shows the 5 U.S. Patents that IV alleges are infringed.

Note: Click on the Patent Map Image on the Left to View an Interactive Patent Landscape Map.

The boxes with the Green Stars are the IV patents in this lawsuit.

To the right of each Green Star are the patents that cite the IV patents. These include 23 Micron Technology (red top boxes) patents.

Click to View a Citation Analysis of the companies and patents that appear on this map.

Patents Acquired by Intellectual Ventures from Cirrus Logic

The 4 Cirrus Logic patents in the IV lawsuit are part of a group of 61 patents that Intellectual Ventures acquired in 2010.

The 4 Cirrus Logic patents in the lawsuit are marked with Red Stars on this IPVision Patent Citation Interconnection Map, which shows the patent citations within this group of 61 patents. Note: Click on the Patent Map Image on the Right to View the Map Interactively.

These 61 patents have been cited by 843 other U.S. patents owned by 150 companies.

See a Patent Citation Analysis showing the companies and patents citing and cited by these 61 former Cirrus Logic patents.

License Agreement with Micron Technology

In addition to the 23 Micron Technology patents that cite the 5 patents in this lawsuit, the Patent Citation Analysis mentioned above shows that there are 183 total Micron Technology patents that cite one or more of the 61 patents that Intellectual Ventures acquired from Cirrus Logic. The large number of Micron Technology patents that cite these patents now owned by Intellectual Ventures may explain why Micron Technology entered into a License Agreement with IV in May 2011. This may have been in lieu of or in settlement of a threatened infringement suit.

According to the Intellectual Ventures Press Release: "The agreement provides Micron with access to IV’s patent portfolio of more than 30,000 IP assets. In addition, the companies have the option to buy patents from each other. Micron can acquire patents from IV to help defend against companies that may assert patents against them, and IV has the opportunity to acquire patents from Micron to expand and supplement its growing portfolio of IP assets."

This sounds a bit like a patent troll/robber agreeing to share guns with his robbery victim....

Author: Joseph G. Hadzima, Jr. | Senior Lecturer, MIT Sloan School of Management | President of IPVision, Inc.

IP Strategy – IPVision Leaders Recognized in IAM Strategy 250

Info IPVision — Sun, 19 Jun 2011 14:00:00 GMT

IP Strategy is recognized as an important component that supports corporate strategy. Each year, Intellectual Asset Management (IAM) Magazine identifies and recognizes those individuals who are the best of the best in terms of offering IP owners and executive leadership world-class strategic IP business advice.

In 2011, IPVision leaders Joe Hadzima and Alex Butler were included in this unique publication. IPVision’s analytics-driven approach helps innovative companies to improve performance significantly through superior perspectives into strategic considerations and tactical decisions.

“Over the past decade, we have worked with leading companies to help them address complex decisions – whether M&A transactions, corporate planning, market entry decisions, or more routine technology landscape analytics for business/competitive intelligence… we thank IAM for recognizing the value of our efforts and the unique approach that the IPVision provides” commented Joe Hadzima, co-founder of IPVision and Senior Lecturer of the MIT Sloan School of Management.

Colleague, Alex Butler, further noted that clients view IPVision as the leading firm focused upon the use of patent analytics in a business and strategy-oriented discussion. “The investments we have made in platform-enabled patent analytics and consulting provide superior results – whether supporting a deep-dive technical analysis or structuring an ongoing, data-driven corporate planning and decision-making process.”

IPVision reports and services provide significant insights into patent portfolio quality, patent portfolio strength and position analysis, and patent strategy/investment indicators -- bridging gaps often found between legal, technical and financial perspectives. Partnered with IPVision’s patent claims analytics, executives and experts are able to quickly focus legal and technical analysis in timely, cost-effective manners.

IAM Magazine and the IAM 250 are recognized as an impartial source of reference building upon primary research by IAM editors including multiple source nominations, industry interviews and iterative due diligence discussions.

Additional information on the IP Strategy 250 selection process is available from IAM Magazine.

"Fast Company" and "Great Again" Reference IPVision Research

Info IPVision — Fri, 17 Jun 2011 13:30:00 GMT

In "Why the US Patent Office is a National Problem" Fast Company published an excerpt from the recently published book “Great Again” on June 9, 2010.

This Fast Company Leadership briefing focuses upon the importance of a well-functioning patent office and patent systems for entrepreneurs, technology companies (and their investors) and economic development. "It is the intellectual property that [provides] the basis for investors to place their resources at risk," wrote Mario Cardullo, counselor for technology and entrepreneurship within the International Trade Administration of the U.S. Department of Commerce.”

The article further discusses the difference between merely having IP and developing well-positioned, strong, high-quality IP rights, including references to IPVision’s analytics into the correlation between patent quality and patent positions and venture capital success.

With the U.S. patent office seeking to reduce patent pendency (the time it takes for a patent to issue), concern remains on the quality of patents received by companies. Two measures dominate this analysis, the breadth of a claim (IE, how “much” rights are provided to the patent holder) and the structural quality of a claim. Historically, these measures required expert analysis and could only be received on a targeted basis. IPVision worked with Fortune 100 patent holders and legal experts to create an expert system that provides these insights at a fraction of the time and cost of manual review – thus, enabling patent counsel and technical experts with data-driven access to these critical insights.

In bench-mark studies, IPVision has demonstrated across multiple large patent portfolios that often less than 5% of patent claims provide “A1” results – namely, those patent claims that are both broad and structurally well-written per case law. IPVision’s Joe Hadzima, who counsels senior corporate leaders, draws upon the analogy of patents as building blocks. “You can have a large pile of blocks (the historical “large patent portfolio / war-chest”) or a castle/fortress constructed from strategic assets (a well-developed, strategically-aligned patent portfolio).”

IPVision routinely assists clients incorporate patent claims analytics (as an indicator of patent quality) into strategy, competitive intelligence and risk-management processes.

Download a complimentary (summary) patent metrics report: patent quality assessment for Microsoft Corporation patents from 2000-2009 for one example of how IPVision helps overcome the data overload problem faced by historical expert-based and more-recent outsourced-based labor-driven approaches.

Dolby Sues Research-in-Motion for Patent Infringement

Joe Hadzima — Thu, 16 Jun 2011 22:28:00 GMT

As reported in TechCrunch, Dolby Laboratories has sued Research-in-Motion, the maker of the Blackberry, for patent infringement.

According to a Dolby press release "...RIM infringes Dolby patents covering highly efficient digital audio compression technologies which allow manufacturers and consumers to provide and enjoy high quality audio while using extremely limited amounts of transmission and/or storage space for such audio. RIM employs Dolby’s patented technologies in its Blackberry smart phones and Playbook tablet devices, without having obtained licenses from Dolby ....[a]ll other major smart phone makers have agreed to license the Dolby technologies which are the subject of this litigation." The lawsuit was filed on June 14, 2011 in the U.S. District Court for the Northern District of California. Sullivan & Cromwell LLP is counsel for Dolby.

The Dolby Patents: Acquisition of Coding Technologies AB

The 5 U.S. patents in these lawsuits are actually owned of record by Coding Technologies AB, a Swedish company that was acquired by Dolby Laboratories in November 2007 for US$250 million. Surprisingly as of the date of the lawsuit Coding Technologies owned of record 30 U.S. patents. These 5 patents asserted in the lawsuit are:

6978236	Efficient spectral envelope coding using variable time/frequency resolution and time/frequency switching
7003451	Apparatus and method applying adaptive spectral whitening in a high-frequency reconstruction coding system
7382886	Efficient and scalable parametric stereo coding for low bitrate audio coding applications
7469206	Methods for improving high frequency reconstruction
7590543	Method for reduction of aliasing introduced by spectral envelope adjustment in real-valued filterbanks

Patent Landscape Map of Lawsuit Patents

This Patent Landscape Map shows the 5 U.S. Patents that Dolby alleges are infringed.

Note: Click on the Patent Map Image to View an Interactive Patent Landscape Map.

The boxes with the Red Stars are the Dolby patents in this lawsuit.

To the right of each Red Star are the patents that cite the Dolby patents. These include Agere Systems (blue top boxes) and LS Electronics (green top boxes). Most of these patents are so new that they haven't been cited by other patents... it will be interesting to see how this patent landscape develops over time.

Dolby Labs' Patent Ammunition

As mentioned above, only 5 of the 30 Coding Technologies U.S. patents were asserted against RIM. The full Coding Technologies patent portfolio is shown in the following IPVision Patent Portfolio Interconnection Map:

An IPVision Patent Interconnection Map shows the citation relationships between a group of patents - here the Coding Technologies Portfolio.

The patents with the purple stars on them are the 5 patents that have been asserted against Research-in-Motion.

The Coding Technologies Portfolio has been cited by 102 other U.S. patents as of June 2011. The Top Owners of these patents are:

Owner	#patents
Microsoft	13
LG Electronics	11
Agere Systems	8
Dolby Laboratories	6
Panasonic Corporation	6
Philips NV	5
Samsung Electronics	4
Sony Corporation	4
Matsushita Electric	3

Are these the next targets for Dolby Laboratories?

John A. Rogers - 2011 Winner of the $500,000 Lemelson-MIT Prize

Joe Hadzima — Mon, 13 Jun 2011 17:50:00 GMT

The Lemelson-MIT Awards Committee today announced that John A. Rogers of the Department of Material Science and Engineering of the University of Illinois at Urbana-Champaign is the 2011 Winner of the $500,000 Lemelson-MIT Prize.

Professor Roger's group seeks "to understand and exploit interesting characteristics of 'soft' materials, such as polymers, liquid crystals, and biological tissues as well as hybrid combinations with unusual classes of micro/nanomaterials, in the form of ribbons, wires, membranes, tubes or related.....[their] current research focuses on soft materials for flexible ‘macroelectronic’ circuits, nanophotonic structures, microfluidic devices, and microelectromechanical systems. These efforts are highly multidisciplinary, and combine expertise from nearly every traditional field of technical study."

Patent Portfolio Interconnection Map of Rogers Patents

As of June 2011 Professor Rogers was listed as an inventor on 73 issued U.S. patents and 23 published pending U.S. patent applications.

This IPVision Patent Portfolio Interconnection Map shows the U.S. patents and applications of John Rogers and the citation relationships within the portfolio. Note: Click on the Patent Map Image to View an Interactive Patent Map

The Rogers patents have been cited by 780 other U.S. patents owned by over 200 companies or universities. These include 46 patents owned by SiPix Imaging, 40 owned by Semiconductor Energy Lab and 27 owned by KLA-Tencor.

IPVision Report Provided to Lemelson-MIT Prize Committee

IPVision provided the Lemelson-MIT Prize Committee with patent analysis reports on each of the semi-finalist and finalist nominees for the 2011 Lemelson-MIT Prize. Obtain a free copy of the IPVision Patent Analysis Report on John Rogers.

Author: Joseph G. Hadzima, Jr. | Senior Lecturer, MIT Sloan School of Management | President of IPVision, Inc.

NSF SBIR - Technology Commercialization Strategy and Patent Data

Joe Hadzima — Thu, 02 Jun 2011 12:30:00 GMT

I have been working with the National Science Foundation Small Business Innovation Research (SBIR) Program for a number of years now. This past January I organized an all day Technology Commercialization Workship at MIT. A few weeks ago I followed up on that workshop and gave a talk on Intellectual Property Strategy at the NSF SBIR Phase 2 Conference in Baltimore. The two hundred Phase 2 SBIR Grantee companies in attendance are selected through a rigorous NSF review process that looks at technical merit and commercial potential. Each receives $500,000 over a 2 year period. The takeaway: these are high potential companies seeking to commercialize new technologies.

One of the approaches that I encourage innovators to use in forming their technology commercialization strategies is to make use of patent data. The patent system is a social contract in which society grants a limited time monopoly to an inventor in exchange for the disclosure of his or her invention. For a society that is very much "anti-monopoly" this is a big deal and it has long been part of the American landscape - it appears in the Constitution itself. The theory is that the patent system increases our useful knowledge and helps propel our inventions and innovations. The reality is that this knowledge has been difficult to access practically because of the detailed text-based nature of patents. Fortunately data visualization technologies such as those used by IPVision has changed this.

Oil Fields and Medical Devices

An example I gave to the NSF SBIR Grantees comes from a project done by a MIT Sloan Fellow student of mine in 2003. Sloan Fellows are sent by their companies to the MIT Sloan School of Management for an intensive one year MBA.

This student from a South American Oil Field Products and Services Company was considering a relatively new technology known as “Expandable Tubes” which it was thought might cause a drastic change in the architecture of oil drilling and wells.
He wanted to investigate the patent landscape as part of his technology and opportunity assessment.
He and his patent lawyer had identified 4 patents of interest to be investigated.

In 2003 the 4 patents ("Starting Set") were cited by 9 other patents. Eight of them had "oil field" type of titles but one of them was a bit different: "Removable gripping set screw". A Forward Patent Landscape Map of these 4 patents showed that this then recently issued patent had cited 64 other patents as prior art (shown as the "64" in the (64,0) label in the green patent box):

To identify these 64 patents we produced a Backward Citation Map for this "set screw patent":

We noticed that most of these 64 prior art patents were medical device patents, specifically spinal implant related.

The Sloan Fellow student found this quite exciting because the technical issues involved in this oil field application and the medical device area were similar in many ways, although the environments are radically different. As the saying goes: "We are all victims of our own experience". In his paper he stated: "[For this particular patent] most of the innovations fall within the medical equipment industry. This interesting characteristic of the IP landscaping techniques forces managers to do what is otherwise considered awkward and is often avoided: to look around and into different industries and study how their solution to problems could represent a possible alternative for innovations. In this case, the technology of wells drilling and completion (Oil & Gas industry) tangentially contacts the Medical Equipment industry."

In using this example in my NSF presentation I looked to see what had happened to the landscape of these 4 Starting Set patents since 2003. In 2003 there were 9 forward citation patents citing the 4 Starting Set patents - today there are 166. On the left below is what a Landscape Map looked liked in May 2011 (the red vertical line is 2003). The map on the right is the Set Screw Landscape Map showing the 30 patents that now cite this patent:

As the Sloan Fellow noted: "This systematic exercise provides the company with a powerful tool to constantly assess its position from a technological stand point, gives direction of new technology development avoiding further encroachment either by competitors or to competitors patents, and finally helps identifying opportunities for merging, acquisitions, alliances and license agreements."

Isn't this exactly what Technology Commercialization is all about? Based on the questions I received following my presentation it is clear that these NSF SBIR Innovators "get it".

Note: To see this and other papers on Intellectual Property Strategy go to patents.mit.edu.

PATENT METRICS: Patent Benchmarks to Transform Your Organization

Alex Butler — Mon, 17 Jan 2011 18:04:00 GMT

As we approach annual performance reviews and strategic planning milestones, we invariably focus upon management systems and metrics.

One of the most important themes that we observe in R&D and patent departments is that leading organizations are shifting from measures of patent “throughput” to measures of patent quality.

How often do you hear the phrase “if we cannot measure it we cannot manage it”? Or, think about how your organizations (or your clients) consider IP issues too late in their processes?

Is it perhaps that we fall into the trap of experts seeking a fundamental answer (I.E., is this patent valid and infringed) while the better question is to find directional indicators and measurements that support focused review, collaborative inquiry, and the advantage of unique insights and perspectives into broader business processes and decisions.

We have spent many years working with leading organizations to help them move patent considerations forward and into decision-making processes and business functions for R&D program management, corporate strategy, business development (particularly M&A), and risk management.

The common theme encountered is similar to a New Year’s fitness resolution – we know that we need to do this; however, we do not know how, we start (briefly), or we start and then fail to make our daily/weekly trip to the gym productive and useful.

It needn’t be:

Start with your corporate strategy and existing core processes that drive innovation, current earnings and future revenue streams
Look at your corporate calendar and find time to include a periodic review of key measurements and metrics that focus upon your qualitative position vs. bench-mark peers – and avoid the trap of thinking that quantity is the best measurement. (Although quantity is perhaps the easiest measure to obtain; recall that a "pile of bricks" is simply a pile of bricks and not a castle or well-constructed portfolio.)
Think about measurements that focus upon generating insights into what you may not know.

The results can transform your organization through improved decision-making.

Following are a few basic bench-mark metrics that we find useful in a scheduled cross-functional patent planning:

Patent portfolio position rating in comparison to peers (for larger firms, this should be broken down into core technology portfolios / sub-portfolios)
Pace and range of inventiveness (note, we distinguish between “invention” and “innovation” which may or may not be correlated to one another depending upon the situation)
The quality of newly granted patents (a first-level assessment of breadth and structure)
Alerts for 'potential breakthrough' or ‘future seminal’ patents
Identification of new references or citations to your existing portfolio, which may signal competitive developments or extension of your technology across a value chain

These programs provide meaningful returns including future revenue growth, increased productivity / returns from existing programs, and nearly certain cost savings by stimulating discussions around where corporate resources and budgets are applied.

A typical measure and review process includes the following schedule:

Initial baseline bench-mark and assessment (1/2 day to full day)
Quarterly update report with scheduled review session including legal and business representatives (1 - 4 hours)
Annual update to baseline assessment (1/2 day to full day)
Periodic interim alerts and discussions as developments merit or needs arise

The above image is one-page of a typical quarterly review. You can download a full-size PDF copy of this sample patent bench-mark report page or request a patent bench-mark review for your firm. The payback includes tangible economic results and increased efficiency in moving towards your goals.

Patent Due Diligence: Strategic Patents & Acquired Liability in M&A

Joe Hadzima — Tue, 28 Dec 2010 14:47:00 GMT

In an earlier post we discussed the top level patent due diligence issues that should be considered by a multi-function Due Diligence Team in the acquisition of a “Target Company. We identified four major areas of patent due diligence:

Ownership and Control of Target Company Intellectual Property
The Structure of the Proposed Transaction
Identify Strategic Value of the Target Company’s IP
Target (and Acquiring) Company Exposure to Liability from Intellectual Property of Others

In the second article in this series we dug into the details of due diligence relating to the Ownership and Control of Intellectual Property. In this current article we discuss the last three topics:

Structure of the Proposed Transaction

If the acquisition will be structured as an asset purchase then it is particulary important to make sure that the patent property listing is complete. In this case identification of any “missing” patent family members is key.

Other due diligence items for an asset purchase transaction include (1) review of foreign patent properties to ascertain whether assignments to the Target Company were properly drafted, executed and filed and (2) review of license agreements to ascertain whether they are assignable with or without consent of the other parties.

Identify Strategic Value of the Target Company's IP

An important goal of the acquisition due diligence process is to assess the strategic value of the patent portfolio to the Target Company’s business, including the extent of the exclusivity in the marketplace that these assets provide.

Ideally the Target Company has already mapped its patent portfolio to its products and services, showing which parts of the patent portfolio protect what lines of business. Unfortunately many companies have not done this basic analysis and because it can be time consuming it might not be practical to do in the short calendar time in which acquisition due diligence takes place.

Fortunately there are ways of obtaining a high level assessment of the strategic value of Target Company's portfolio. Specific areas to investigate include:

Are there the Seminal Patents in the Portfolio? Research has shown that highly cited patents are more likely to be valuable and strategic than lesser cited patents. The Acquirer’s Due Diligence Team should identify the most highly cited patents and make an assessment of their relevancy to the various products, services and lines of business of the Target Company. Often this can be done quickly by looking at the Titles and Abstracts of the Seminal Patents.

Identify Seminal Patents

What is the Quality of the Portfolio’s Claims? The relative breath and structural integrity of the Seminal Patents in the portfolio should be examined. If the quality of the Claims in the Seminal Patents is low then the overall strategic value of the portfolio might be limited. This can be completed through manual review alone, or with larger portfolios, by leveraging portfolio claims assessments driven by expert systems.

Is There Evidence that the Target Company’s Portfolio Has Strength? Ultimately the value of a patent portfolio is determined by the ability of the Target Company to exclude others from selling similar products or services. This is a function of the strength of the individual patents (i.e., the “bricks”) and the collective strength of the portfolio (i.e. how the bricks are assembled to create a wall.) A high level view of the “wall” can be had be looking at:

Self-Citation Clustering. A portfolio where the individual patents cross cite other patents in the portfolio as prior art evidences a cohesive patenting strategy in which new features and extensions to a core invention are protected over time, creating a “patent ticket” against competitors. Patent mapping software can be used to visualize the extent of clustering.
Patent Family Size Another view of potential strength can be inferred from the Patent Families in the Portfolio. How large is the largest Patent Family and what technologies/products does it cover? What percentage of the Portfolio are in Patent Families that contain more than 2 members. The answers to these and related questions can provide an insight to how well the Portfolio has been structured and managed.

Expired Patents. Don’t forget the potential residual value in expired patents. A patent that has expired has little going-forward strategic value to a company because it can not be used to exclude others from using the invention(s) disclosed in the patent. However, one can still sue on an expired patent for damages accrued through expiration, subject to the six-year statute of limitations and equitable defenses. So patents that have expired less than six years ago may still have some interest.

Target Company Exposure to Liability from Intellectual Property of Others

Examining the strategic value of a patent portfolio provides insights into the potential “upside” that the portfolio may provide. Equally, if not more important from a due diligence perspective, is determining the extent to which the Target Company is at risk due to intellectual property rights of third parties – i.e., determining whether there is potential infringement liability in the Target Company’s current activities and in the anticipated post-acquistion activities.

Conducting a full infringement analysis of a Target Company can be a very time consuming activity but it may be warrented in specific circumstances. A more practical approach is for the Acquirer’s Due Diligence Team to investigate any “infringement letters” that the Target Company has received.

Another quick way to prioritize review and identify infringement potential is to find the patents that have been cited by the Target Company’s patents (“Backward Citation Patents”) that have also been highly cited by others – these patents should be investigated as potential “dominating patents” – i.e., a highly cited patent represents important prior patent art that may have relevancy to the business of the Target Company.

M&A Patent Due Diligence: Ownership and Control of Patent Assets

Joe Hadzima — Mon, 20 Dec 2010 14:52:00 GMT

In an earlier post we discussed the top level patent due diligence issues that should be considered in the acquisition of a “Target Company”. We emphasized the importance of assembling a multi-function Due Diligence Team, including financial, marketing and technical experts in addition to legal experts, in order to achieve the goal of Identifying and Allocating the IP-Related Risks.

We identified four major areas of patent due diligence:

Ownership and Control of Target Company Intellectual Property
The Structure of the Proposed Transaction
Identification of Strategic Value of the Target Company’s IP
Target (and Acquiring) Company Exposure to Liability from Intellectual Property of Others

In this article we dig into the details of how to assess the first of these areas:

Ownership And Control Of Intellectual Property

What intellectual property assets does the Target Company own and what is its ability to control those assets? To answer these questions the Due Diligence team should take the following steps:

Assemble the Patent Portfolio
Examine the Record Ownership of the Portfolio
Review Chain of Title
Consider Patent Licenses

Assemble the Patent Portfolio

Obtain Patent Inventory Ask the Target Company for a listing of all patent applications (including those in the process of being drafted), published applications and issued patents that the Target Company considers part of its portfolio. This could include patents assigned to the Target Company, a subsidiary of the Target Company or an affiliated IP Holding Company.
Build Your Own Patent Inventory The Due Diligence Team should conduct its own searches of public or commercial databases as a cross check on the Target Company list.
Understand the Full Corporate Tree. A full search will consider all members of the Target Company’s corporate ownership tree.
Document and Map Patent Families. Verify that all members of the patent families in the Portfolio are included in the Portfolio listing.
Patent Process. Ask the Target Company to describe its patent decision making and management process and to provide copies of any invention disclosures that have been submitted, but not yet filed.

Patent Portfolio Map

Patent Family Map

Examine the Record Ownership of the Portfolio

The current ownership of each of the patent properties identified should be checked. The following situations may be encountered:

Unspecified Owners. Patent properties with no assignment shown in the USPTO Assignment database should be manually reviewed to determine whether there are errors at the USPTO or whether there was never an assignment of the rights from the inventor(s) to the Target Company or others.
Other Owners. If the current ownership of patents in the Portfolio includes entities other than the Target Company, this could mean one of many things; for example:
- Subsidiary or Holding Company: The patent asset(s) may be owned by a subsidiary or holding company that is part of the corporate family of the Target Company.
- Joint Ownership: The patent asset(s) may be jointly owned. In this case, the circumstances of the joint ownership should be reviewed with the Target Company and the scope of the jointly owned rights should be ascertained.
- Security Interests: Often security interest filings are made with the U.S. Patent and Trademark Office and appear in the Assignment Database. The existence of such filings can often be determined by looking at the Current Assignee listing on the Portfolio – if a bank or financial institution is listed that is a likely sign of a security interest or encumbrance.

Review Chain of Title

Ideally the Chain of Title on all patent asset(s) should be confirmed as complete such that ownership is clearly with the Target Company. This is a time consuming process especially where the number of patents involved is large. As an alternative the Due Diligence team should consider confirming the Chain of Title on the “most valuable” patents such as those with that are broad in scope with high claims ratings, are in core portfolio clusters or seminal patents in the field.

Consider Licensed Rights

Any intellectual property licenses either granted by or granted to the Target Company should be investigated. Close consideration should be given to:

the scope of the licensed rights: are they exclusive or non-exclusive?
territorial and field of use restrictions and expansion ability of the licensee
transferability of the licence to new owners
the ability to grant sub-licences
duration of the licensed rights
Economic and non-economic obligations of licensee and licensor

Where the Target Company has disclosed an in-bound license, the Due Diligence Team should compile a listing of the patent family members related to the license and identify those patent properties, if any, that were not listed by the Target Company but are in the relevant patent family. The inclusion or exclusion of these additional properties should be investigated by the Due Diligence Team.

Next Time: Identifying Strategic Value

In our next article we will discuss how to assess the strategic value of the patent portfolio to the Target Company’s business, including the extent of the exclusivity in the marketplace that these patent assets provide.

Patent Maps of Paul Allen's Interval Research Lawsuit Patents

Joe Hadzima — Mon, 20 Dec 2010 14:36:00 GMT

The Wall Street Journal reported on December 13, 2010 that U.S. District Judge Marsha Pechman in Seattle dismissed Paul Allen's patent lawsuit against many of the leading companies in Silicon Valley including Google, Apple, Facebook and Yahoo. Judge Pechman dismissed the complaint for not describing its allegations specifically enough. Paul Allen has until December 28 to amend the complaint.

This case was front page news in all of the major newspapers when these patent infringement suits were filed on August 28, 2010. What do we know about the four patents in these suits?

Interval Research Corporation and Vulcan Patents

These patents came out of the Interval Research Corporation, a Palo Alto think tank founded in 1992 by Paul Allen and David Liddle. IRC, which closed active operations in 2000, focused on broadband applications and technologies.

According to the Wall Street Journal, Interval Research was issued "about 300 patents" during its existence. A quick search of the U.S. Patent and Trademark Office databases shows 131 U.S. patents originally issued in the name of Interval Research. Current ownership records show that many of these are now owned by Vulcan Patents LLC.

The 4 U.S. patents in these lawsuits are:

6034652	Attention manager for occupying the peripheral attention of a person in the vicinity of a display device
6263507	Browser for use in navigating a body of information, with particular application to browsing information represented by audiovisual data
6757682	Alerting users to items of current interest
6788314	Attention manager for occupying the peripheral attention of a person in the vicinity of a display device

Patent Landscape Map of Lawsuit Patents

This Patent Interconnection Map shows the 4 U.S. Patents that Paul Allen alleges are infringed.

Note: Click on the Patent Map Image to View an Interactive Patent Landscape Map.

The large "fan" at the top of the map is U.S. 6,263,507 "Browser for use in navigating a body of information, with particular application to browsing information represented by audiovisual data".

The alleged infringers include: AOL, Apple, eBay, Google, Netflix, Office Depot, OfficeMax, Staples, Yahoo and YouTube.

The next "fan" is the '652 patent, followed by the '314 patent. The small fan at the bottom is the '682 patent.

IPVision Patent Family Map of Lawsuit Patents

This is an IPVision Patent Family Map showing the 4 patents in the Paul Allen lawsuits (shaded in yellow) and their associated U.S. "patent family members" in the top portion of the map. Click on the Map Image to view the Interactive Map online.

Lawyers defending against these suits will want to investigate the patent prosecution history of these patents.

The foreign patents relating to the 4 U.S. patents (source = INPADOC) are shown toward the bottom of the map.

Patent Due Diligence in Mergers & Acquisition Transactions-Overview

Alex Butler — Fri, 17 Dec 2010 14:21:00 GMT

Wall Street Journal recently reported on Federal Reserve data showing that at the end of September 2010 non-financial companies in the U.S. were sitting on $1.93 trillion in cash and other liquid assets representing 7.4% of the companies' total assets—the largest share since 1959.

At some point these companies are likely to use this cash horde to purchase growth or technology by acquiring other companies. We have seen this in the Technology Sector in recent months with deals such as EMC’s acquisition of Isilon for $2.25 billion and Oracle’s acquisition of Art Technology Group for $1B. As the value of companies becomes driven more highly by intangible assets it is appropriate to think about how best to conduct “due diligence” of intangibles, starting with intellectual property.

There are a number of patent due diligence issues that should be covered when investigating the intellectual property of a company to be acquired (the “Target Company”).

Due Diligence Team

Typically the review of a Target Company’s patents is handed to the lawyers due to the potential complexity of the legal issues involved in prosecuting and enforcing patents. However more than legal analysis is required to achieve the goal of a due diligence investigation of a Target Company, namely the Identification and Allocation of IP-Related Risks. To achieve this goal a Due Diligence Team should be assembled consisting of technical, business and legal experts.

Areas for Due Diligence Review

The high level areas that need to be addressed in Patent Due Diligence include:

Ownership and Control of Target Company Intellectual Property
The Structure of the Proposed Transaction
Identification of Strategic Value of the Target Company’s IP
Target (and Acquiring) Company Exposure to Liability from Intellectual Property of Others

Intellectual Property Ownership And Control

What intellectual property assets does the Target Company own and what is its ability to control those assets? To answer these questions the Due Diligence team should take the following steps:

Assemble the Patent Portfolio
Examine the Recorded Ownership of the Portfolio
Review Chain of Title
Consider Licensed Rights

In a future post we will dig into these topics in more detail.

Asset Purchase: Are All Patent Assets Present?

If the acquisition will be structured as an asset purchase then it is particularly important to make sure that the patent property listing is complete. In this case identification of any “missing” patent family members is key.

Identify Strategic Value of the Target Company’s Patents

Acquired Patent Risk: Exposure to Acquired Patent Infringement Risk

In other words, if you purchase a business to scale through your stronger resources, capital or marketing, you may present a "better target" in the eyes of IP owners.

Conducting a full infringement analysis of a Target Company can be a very time consuming activity but it may be warranted in specific circumstances. A more practical approach is for the Acquirer’s Due Diligence Team to investigate any “infringement letters” that the Target Company has received.

Arm Yourself With Information in Advance of M&A Activity

If you have been building your cash reserves in advance of expected M&A activity when prices and timing are right, now is the time to prepare by researching and understanding the general intellectual property landscape in the sectors you are or expect to be play in. As mentioned in an earlier post many benefits arise from Moving IP Considerations to the Front End of the M&A Process.

Move IP Considerations to Front of M&A Process Or Suffer Consequences

Joe Hadzima — Mon, 25 Oct 2010 13:15:00 GMT

This is a real story but the names have been changed to protect the vulnerable.

Recently a public company contacted IPVision and inquired about our ability to support their activities in mergers and acquisitions. They were surprised by the answer.

Background

The company’s historic business was a “cash cow” whose activities take place in the “physical world.” Steady and reliable growth in an industry that is continuing to expand.

Senior Management of the company realized that the company’s physical world activities were starting to migrate to the “electronic online world.” The company needed to think strategically about using its historic business franchise strength and cash flow to position itself in this emerging growth market. The following factors were favorable for the company:

Cash. Sufficient cash on hand and debt capacity to make “all cash” acquisitions
Stock. Its stock price strength was well positioned for stock based acquisitions
Target Rich Environment. A reasonable set of venture backed companies developing product and technology in the target space
Customer Acceptance. Its historic business customer base was already looking for “electronic space” solutions due to some underlying industry and legal trends.
Prior Good Experience. A prior acquisition in a related space had proved to be very successful from a product, profitability and growth potential prospective.

Senior Management committed sufficient resources to develop and implement this new strategy initiative. The company hired in three experienced consultants from big name consulting firms and beefed up the general counsel’s office with a M&A attorney from a major law firm. This new M&A Group working with Senior Management identified a sector of the “electronic space” to explore. They assembled a list of 10 target companies for acquisition ranging from a company with $200M+ in revenue to a startup with no revenue but interesting technology. They conducted extensive traditional first pass M&A analysis and identified the $200M revenue company (“Big Target”) as the best strategic target for the following reasons, among other:

Revenue Level. Big Target’s $200M in trailing 12 month revenue would “move the needle” as a short run increment to the company’s $2B revenue.
Rapid Revenue Growth. Big Target’s revenue has increased at a 35% compound rate over the past 3 years and was projected to accelerate.
Customers. Some overlap with the company’s existing customer base but significant new customer opportunities.
Solid Management. Big Target’s management team had worked together effectively for over 5 years and could be incented to continue on
Accretive. The projected EPS of the combined entity was immediately accretive.

Enter IPVision

Following traditional M&A approaches it was only after the M&A Group had done its first pass due diligence that it decided to check out the intellectual property. The M&A Group contacted IPVision because one of the newly hired consultants knew of our ability to provide rapid analyses of multiple target opportunities. They did not inform us about the results of their due diligence and their interest in the $200M+ revenue company.

Two days later we met with the company and recommended from an IP viewpoint that they acquire a different one of the 10 targets - a $20m revenue company (“Smaller Target”). As identified in patent position assessment screens (IPVision’s Level 1 and Level II assessments). This company held key patents in this emerging space and had built a strategic patent portfolio. Their pending patent filings suggested significant existing and potential innovation.

The M&A Group asked “what about Big Target – there are all of these great financial and synergy aspects we identified?” We said “that may be but if you acquire Big Target now you are setting yourself up for a high risk of patent litigation that will be disruptive and in which you may not prevail at all or at an acceptable price. Consider acquiring Smaller Target first to lock up the IP rights in this space and then use that as a consideration in pricing the acquisition of Big Target”.

Morale of Story: Bring IP Considerations to the Front End of M&A

Fortunately the company had not made an offer to acquire Big Target before checking on the IP, however that happens more times that you would think. Patent analytic tools have evolved such that more extensive, time sensitive and cost effective reviews can be moved to the front end of the mergers and acquisition process. This enables a consistent, repeatable review of alternatives. You would never think about an acquisition before considering EBITDA and accretion impact – these are metrics that help a company make consistent evidence based decisions. The time has come to apply appropriate metrics to IP to identify opportunities and avoid problems.

Patent Litigation Risk Continues to Increase - Gain Control

Joe Hadzima — Tue, 12 Oct 2010 21:45:00 GMT

A recent Wall Street Journal article discussed the recent multi-year increase in patent infringement lawsuits and corporate risk. Although this trend is most prevalent in the high-technology sector, economic and strategic realities are forcing corporate and outside counsel to find new methods to control the time and expense allocated to patent risk management.

Learn how one high technology company gained control over patent assertions and forged new case management processes by deploying an early case assessment process.

First, following are some insights into the current state of affairs.

In the WSJ article “Tech Firms Intensify Patent Spats” Dan Clark and Shayndi Raice discuss the 2.5k + patent cases filed in the U.S. federal court system annually – with more detailed discussions of the mobile device, wireless and software industries. With increasingly rapid product cycles (often building upon improvements to older technologies) and the introduction of new standards – it is perhaps inevitable that some patent gamesmanship will arise.

Adding to this froth is the increasing level of cash on corporate balance sheets – this makes certain firms, such as Apple, Google, etc. richer targets for non-practicing entities seeking to earn a return from patent assets purchased from others. Many of these NPE’s are built upon hedge fund, and some institutional investments, seeking increased returns over the stagnant traditional markets.

Ironically, the very cash accumulation that makes many technology firms defensive targets also provides budgetary freedom to institute patent litigation offensively; particularly if a strategic advantage appears within reach.

With substantial sums invested in patent litigation and those amounts increasing quickly, the need to deploy a cost-effective litigation response business process into your legal department will not go away.

Best Practices

Here is one best practice IPVision designed with a leading technology firm facing dozens of patent infringement lawsuits:

Monitor court dockets for new complaints

Provide an early case assessment report within 48-72 hours (a sample of IPVision’s early case assessment is available here). The early case assessment includes three categories of critical information:

Demographic details
Patent assessments
Checks for common defenses and common plaintiff errors

Demographic details include a review of the attorneys and plaintiff’s litigation history, financial backing (where available), and a review of related disputes (for example, ITC filings) and the patent prosecution history and patent file wrapper.

Patent assessments leverage IPVision’s patent analytics and expert systems approach to quickly and accurately provide insights into the patents in the case, the broader patent family and plaintiff patent portfolio, inventors, and an initial patent landscape analysis. IPVision further extends this component of the case assessment process to include delivery of patent family maps and patent claims analysis reviewing claims for their relative scope and for language and construction pursuant to relevant case law. Finally, IPVision incorporates an initial prior art search to help guide technical review and develop an understanding of potential patent invalidity defenses.

In the third section, common defenses and plaintiff errors, we work with the client to review common defenses that may assist in case resolution – examples include consistency of inventor listings in the family/portfolio, chain of title deficiencies, improper back citation, government interests, etc.

Previously, this information was gathered over the course of several weeks (generally 4-5) and at a cost of around $100,000 per case. More importantly, critical time was lost in developing litigation response, defense and potential counter claims and the legal and business team did not have an early understanding of an appropriate level of resources to apply to the dispute.

The early case assessment process produces real economic savings with such assessments costing far less than $25,000-$35,000 per case - a 65-75% savings! Buttressed with new insights and control in the early days, litigation strategy and corporate communications have also remarkably improved.

Note: For additional insights on this topic and a game theory approach to managing patent risk, see the IPVisions blog post Patent Risk Management and Controlling Patent Litigation Costs.

M&A UPTURN: High-Quality IP Informs Strategic Investments & Acquisition Programs

Alex Butler — Tue, 12 Oct 2010 21:30:00 GMT

As cash continues to accumulate on corporate balance sheets, pressures are rising to increase returns. Given the correlation between high-quality IP holdings and successful exit from venture capital funds, learn how leading strategy practitioners, investors, and business development functions gain from including patent portfolio analytics in their tool-kit.

With increasing cash balances, and growth imperatives, it is not surprising that the M&A market continues to expand. Thomson Reuters and the National Venture Capital Association report that fund exits by acquisition in 2010 are at a level on par with 2006 and 2007 – when the economy was in a far different state.

Leading strategy practitioners and business development executives charged with corporate growth intuitively “know” that patent rights contribute immensely to the value received in an acquisition – however, they traditionally have not fared well in assessing the relative quality and position of those components of value. IPVision’s patent portfolio analytics, as discussed in a recent Intellectual Asset Management Magazine article, provide a consistent, evidence-based approach to obtain key insights into the relative strength and quality of a firm’s IP holdings – and of the management team’s investment in those rights.

We observe three best practices adopted by clients charged with these decisions:

Investment analysis
Acquisition pipeline analysis
Acquisition due diligence and integration planning

In investment analysis VC funds (either traditional or corporate venture) and private equity are able to quickly obtain a consistent view of multiple potential investment candidates’ patent positions. These ratings and the underlying details available in reports and in the IPVision Advantage™ online platform, provide insights into the development of patent portfolios, insights into the company’s strategy and management caliber, and the relative position of the company amongst its direct competitors and potential acquirers seeking platforms for future growth.

Acquisition targeting and pipeline analysis provides corporations with a method to identify those firms that may add high value to their organization through partnership or acquisition. Whether developing core technology extensions or future platforms – assessing the broader landscape to identify desirable technology leaders, understand their financial backing and estimated burn rate provides critical insights to focus relationship building and corporate intelligence efforts. In this role, we see leading firms utilizing acquisition candidate dashboards that monitor and track changes to target companies IP assessments and watch for important developments – generally through quarterly updates.

Acquisition due diligence and integration planning builds upon portfolio assessments to help the combined firm understand how to build out a strategic patent position that embraces the combined elements of both legacy portfolios. Further, this planning process and analytics-driven insights can lead to patent monetization (or sale) and the reduction in patent maintenance expense by identifying non-core assets that might best be divested.

One additional tip: patent portfolio analytics and due diligence helps identify key inventors that the management and HR team should treat with care during the integration process to avoid losing valuable talent and intellectual capital to eager competitors and recruiters watching the combined company for potential new hires.

YEAR-END PLANNING: Bring SMART IP objectives into your organization

Joe Hadzima — Tue, 12 Oct 2010 20:54:00 GMT

In recent years, the use of S.M.A.R.T. objectives has moved from the domain of project management into corporate performance and personal development. S.M.A.R.T. criteria and objectives are built upon a sound foundation and provide corporate managers and leaders with actionable criteria to identify and craft personal performance objectives and to set and measure progress towards strategic goals and tactical milestones.

Do you know if your R&D, Legal and Strategy functions have S.M.A.R.T. IP objectives and criteria included in their management processes?

To recap, S.M.A.R.T. objectives are:

Specific
Measurable
Attainable
Relevant
Time-bound

S.M.A.R.T. objectives should include a range of data-driven attributes (I.E. are measurable) that are relevant to your function and strategic objectives. For example, one objective might be to incorporate front-end IP landscape analysis into your R&D programs as a precursor to releasing R&D funds and budgets. The gains from these early insights are substantial and can save untold millions in lost productivity and misdirected research dollars.

Another may be to work within your strategy to incorporate IP Portfolio Assessments of pipeline acquisition candidates or to include IP analytics benchmarks in your competitive review cycles. Acquiring a market leader (or scaling a platform business) while not controlling the relevant IP rights is an expensive way to “buy-into” increased risk. Smart companies seeking competitive advantage through IP positions use this knowledge to build value and reduce the cost of control premiums.

Legal functions may find great value in applying patent claims ‘assessments’ for quality drafting or to assess and improve the value received from outside counsel.

Here is a specific example from an R&D best practice:

Budget and complete a patent and technology landscape analysis report for all R&D program requests greater than $1,000,000 in net present value in the business case submission.

Following is an example from a Legal and risk management best practice:

Obtain patent claims analysis for the corporate patent portfolio within Q1 to identify those patents that have broad and narrow claims and those patents that are potentially weakened by drafting errors or case law directives. Map the portfolio patent claim assessment to product and revenue streams by the end of Q3 to identify shifts in patent maintenance expense, patent monetization potential and corporate risk management programs.

In the end, craft a specific S.M.A.R.T. IP objective, make it actionable through your project management or performance management programs and you will see results.

$7.7 billion update to Patent Perspectives Report

Joe Hadzima — Thu, 19 Aug 2010 14:03:00 GMT

Intel (INTC) announced early on Thursday, August 19th, that is purchasing security firm McAfee (MFE) for $7.68 billion in a cash transaction.

This represents a 60% premium to McAfee's closing share price on August 18th and fundamentally changes the information security landscape.

MIT's Technology Review magazine and IPVision recently issued a report Patent Perspectives: On Security providing information on patent holdings in the security field -- including a focus on McAfee's portfolio. The original report is available for download with a supplemental update planned.

Additional information on this subject is also available in the IPVisions article of June 22nd, including patent portfolio demographics and assessments of 20 firms identified by Technology Review editors.

Patent Litigation: Google Android Claimed to Infringe Java Patents

Alex Butler — Fri, 13 Aug 2010 19:54:00 GMT

On August 12, 2010, Oracle America, Inc. (Oracle) filed suit against Google, Inc. in the Northern District of California claiming that Google's Android operating system infringes 7 "Java" patents owned by Oracle America, a subsidiary of Oracle Corporation. These Java patents are owned by Sun Microsystems which was acquired by Oracle in January 2010.

Oracle's Patent Infringement Filing

According to the Complaint "Google’s Android competes with Oracle's Java, acquired with Sun Microsystems, as an operating system software platform for cellular telephones and other mobile devices. The Android operating system software “stack” consists of Java applications running on a Java-based object-oriented application framework, and core libraries running on a “Dalvik” virtual machine (VM) that features just-in-time (JIT) compilation Google actively distributes Android (including without limitation the Dalvik VM and the Android software development kit) and promotes its use by manufacturers of products and applications."

IPVision Patent Map of the Java Patents

This IPVision Patent Landscape Map shows these 7 Java Patents (center of the "fans"), the 75 patents they cite (Backward Citation Patents) and the 210 patents (Forward Citation Patents) that cite the 7 Java Patents. Microsoft owns 44 Forward Citation Patents and IBM owns 40. View a Live Interactive Version of this Map on the See-the-Forest.com patent analysis website.

The large "fan" is US Patent 5,966,702 "Method and apparatus for pre-processing and packaging class files". It has been cited by 124 other patents, including 32 patents owned by Oracle and 16 owned by Sun Microsystems/Oracle.

The patents are also available for download by right-clicking on them in the patent map.

Learn More About Reading IPVision Patent Maps.

Oracle Has Abundant Patent Ammunition for This Fight

The inventors on the 7 Java Patents have 120 other issued U.S. patents that are owned by Sun Microsystems/Oracle . Although Oracle chose to assert only 7 of the 127 patents, the other 120 may prove to be valuable ammunition in the negotiations around this suit and the emerging smartphone hand held device industry.

This IPVision Patent Interconnection Map shows the 127 issued U.S. Patents by the same inventors that are on the 7 Java Patents in the Google Suit. The 7 Java Patents are highlighted in yellow on this Map.

A Patent Interconnection Map shows the patent citation relationships among a group of patents. Multiple patents citing each other are a "patent citation cluster" and usually represent a strategic patenting process to protect a product or business. On an Interconnection Map a crossing pattern of lines connecting the patent boxes is a visual representation of a citation cluster. Three of the 7 Java Patents are located in the cross-citation cluster of patents at the top of the Map.

This lawsuit also illustrates how companies, such as Google, should proactively monitor changes in their patent landscape. As we have written about before, patent risks change and evolve as companies organically grow their patent positions and, as in this instance, acquire patent rights through M&A.

This perspective is further illustrated by the perspective shared by Silicon Valley litigator Edward Reines in Reuters initial article on the lawsuit: "Sun's corporate philosophy was obviously very different from Oracle's in terms of enforcing the Java patents."