IP Market Updates
September 5, 2017
The last weeks of August are normally fairly quiet when it comes to the intellectual property world and marketplace. This year was not the case, with several major announcements that I will review and discuss below. But before I do, we recently released to the market a few very intriguing patent portfolios around technologies such as self-driving and collision avoidance, automotive telematics, mobile payments, etc. that are already attracting interest from buyers. You can review those and others here and write me if you would like to receive more details.
After months of suspense and drama like only the Trump Whitehouse can seemingly create, we finally have an official nomination for a new UPSTO director, Mr. Andrei Iancu, in replacement of the controversial Michelle Lee who resigned, un-resigned and finally resigned again from her post a few months ago. The nominee, should he be confirmed by the US Senate (which is expected), is largely viewed as a very competent patent litigator familiar with the ins and outs of the system. However, he remains largely an unknown quantity when it comes to his views surrounding the current patent system. He represented patent owner TiVo in court against some of the largest tech companies (Microsoft, Cisco, Verizon, etc.), but also sided with a defendant in a landmark biotech case that has left the life science industry reeling about the damages done to the patent system. He has no direct industry background and has not written on policy. Being mainly a litigator for most of his career, his loyalties have been to his clients and he has maintained a fairly low public profile perhaps saving himself the embarrassment of having to explain away some past inconsistent statements. This leaves us, as with many US agencies, with a new director who comes to the job not only with a clean slate, but also as a blank canvas. This makes any predictions quite risky. If and once confirmed, he will have to tackle with matters such as patent quality, the constitutionality of IPRs, fee diversion and accusations laid against its own PTAB for abuse of discretion (by the Federal Circuit) and anti-patent bias (by pretty much everyone in the community). Incidentally and apparently unfazed by such widening criticism, that very PTAB was so brazen as to recently admitting to “stacking” its panel of judges to conform with its views! Let’s hope the new director will retake control of what looks increasingly like a runaway train.
On the transaction side, we heard that Finnish giant Nokia recently transferred 6000 of its own patents to AWA licensing, which will now be tasked to monetize this large portfolio, and publicly traded NPE Finjan bought a discrete group (about 40) of cyber security patents from IBM that will complement its aging portfolio in the same area. Finjan is one of the few NPEs that has been relatively successful enforcing its patents recently. Finally, Chinese Huawei bought a small group of patents from Hitachi, which is somewhat newsworthy since the two behemoths are currently engaged in a patent war.
Meanwhile and a bit lost in the background was a massive transaction involving the sale of IP service provider CPA Global, a powerhouse in the IP community, for a whopping $3.1 billion dollars, just 5 years after an original purchase price of slightly over $1 billion. The new owner is US based PE firm Leonard Green & Partners.
On the Who’s Who list, we saw a couple of interesting moves with Google’s Chief IP Counsel Allen Lo leaving to take a similar position with Facebook (replacing Sam O’Rourke), while John Lindgren, the former CEO of large Canadian based NPE Conversant (formerly MOSAID), took on a similar role with another privately owned (by Vector Capital) NPE, IPValue, after a discrete executive search that went on for many months. IPValue’s departing CEO and veteran (since 2002) Murali Dharan, will remain on the board. Finally, well-known figure Brian Hinman will step down after 4 years as Phillips’ Chief IP Officer.
I often contrast the situation between the US and China as it has offered a textbook lesson over the past year as to what to do (and not to do) if you want to improve IP rights and, as a result, attract new investments.
It is well accepted that China has made great strides in building a patent system that many pundits now saying it does a better job than the one in the US of protecting patent owners. With this context in mind, it was quite interesting to learn that President Trump authorized US Trade Representative Robert Lighthizer to initiate a Section 301 investigation on August 15th to review China’s practices in regard to intellectual property and US-based companies. Although many of the claims laid against China are not new and many have been well documented over the years, the Trump Administration has a credibility problem on this front and it did not take long for China to call that kettle black, pointing to the poor job the US has done in recent years at protecting its own IP. Maybe this is what was needed to give Congress a good wakeup call that things are not as they used to be. This will be interesting to follow. In the meantime, China has become very agile at playing the system both ways; on one hand, it has built a robust patent enforcement system that tends to favors all patent owners (not just Chinese companies). On the other hand, it has taken a page off the US old book and is starting to support antitrust arguments raised by Chinese companies when fighting large entrenched multinational tech companies. We saw this in China with Qualcomm and – more recently with Apple. And Chinese companies have apparently become comfortable enough to bring their fight onto US territory: last week we saw Chinese appliance maker Haier file an antitrust lawsuit in the Northern District of New York against MPEG LA and the licensors that are part of its ATSC patent pool, namely Phillips, LG Electronics, Panasonic, Samsung Electronics, Columbia University and Zenith Electronics (an LG subsidiary).
I have been writing for years about the long-term consequences of inflicting damage to the US patent system while China, Europe and some emerging countries were doing exactly the opposite; we are starting to see how this plays out on a global scale and the margin for error has become very thin for the US to get its act together before it is too late on this front.
Other news and recently announced deals below…
A better US patent system will spur innovation
But if you are a researcher in the US, you may very well not get a patent for your game changing discovery, because recent shifts in the system mean (more ...)
Justices Told AIA Reviews Cripple Patents, Harm Innovation
Law360, New York (September 1, 2017, 8:46 PM EDT) -- Dozens of inventors, patent owners, life sciences companies and conservative groups urged (more ...)
Stronger Patents Act: 5 Significant Proposed Changes to Inter Partes Reviews
Recently, Senator Christopher Coons (D-Del) introduced the STRONGER Patents Act of 2017. So far, this is the only legislation introduced in this (more ...)
China and intellectual property: Patents and Trumpism finally intersect
American Enterprise Institute
“Tariffs!” President Trump reportedly thundered at his aides earlier this year in the Oval Office. “I want tariffs. And what do they do? They bring me IP. (more ...)
Finjan (FNJN) Buys IBM Cybersecurity Patents to Monetize
Zacks Small Cap Research
Finjan announced that its new wholly owned subsidiary, Finjan Blue (NASDAQ:FNJN), entered into a patent assignment and support agreement with (more ...)
CPA Global sold for £2.4 billion
CPA Global was recently granted a contract with the US Patent and Trademark Office, allowing it to provide full classification services to support the (more ...)
Nokia Offloading Over 6000 Patents Related to 4G, 5G, SDN, VR, and More
Telecom equipment giant Nokia is offloading more than 6,000 patents related to 4G, 5G, SDN, VR, and more in the wake of its recent merger deal with (more ...)
Patent reform is critical to protecting American inventors
Throughout American history, patents have been key to making the United States the world's leader in innovation. They have spurred the development (more ...)
IP lawyer who represented TiVo is Trump's pick as USPTO chief
President Donald Trump has selected Andrei Iancu, the managing partner of a major Los Angeles law firm, to be the next head of the US Patent and (more ...)
IP Strategy is a Tricky Balancing Act for Pharmaceuticals
The 20 years of protection afforded by a patent is intended to promote innovation by allowing inventors a chance to recoup development costs and (more ...)
Trade Secrets v Patents: trade secrets increasingly used to protect innovations
The EUIPO published a study in July 2017 on Protecting Innovation Through Trade Secrets and Patents, based on a survey of around 200,000 (more ...)
Samsung, LG, Others Hit With Antitrust Suit Over TV Patents
Haier America Trading LLC, which is claiming violations to the Sherman Act and state law, says that MPEG LA LLC, a patent licensing company that (more ...)
EIT acquires 22 patents from spine surgeon Dr. Morgan LorioBecker's Orthopedic & Spine
Emerging Implant Technologies acquired a portfolio of patents from Morgan P. Lorio, MD, of Nashville, Tenn.-based Hughston Clinic Orthopaedics. (more ...)
Building a Portfolio in a Depressed Patent Market
“Eventually Congress will recognize that all the changes enacted to address the overblown patent troll issue has resulted in far more damage to U.S. (more ...)
The Problem of Patent Valuation
The anti-patent narrative views patent quality as the major nexus that distinguishes bad patents from good patents. This article has argued that notions (more ...)