IP Market Updates
August 8, 2017
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While everyone has hopefully been enjoying their summer vacation, something interesting has happened in the past few weeks in the IP market. More in a minute… But first, we recently sent to prospective buyers 3 very interesting patent portfolios that are among the best we’ve had for a few years. You can read a high-level summary of each of those (and others) here and can inquire at firstname.lastname@example.org if you would like to receive the full executive summary.
Okay, let’s start with the never ending USPTO director saga. As of today, we still do not have a new director despite some continued candidate vetting. This continues to undermine the agency that has been working with either a lame duck director, an “acting” one or none at all since November 2016. Meanwhile, the Trump administration (always keen to avoid any perceptions of having ties with Russia) did not manage to stay off the radar; and has officially named Vishal Amin as their new… “IP Czar” after he had been confirmed by the Senate. To be fair, although the “Czar” title is customary, his real title will “Intellectual Property Enforcement Coordinator” and his role is to help coordinate anti-piracy efforts between various federal agencies.
The same week, President Trump apparently not happy with China’s feeble objections over the North Korea nuclear program, announced that he plans to open a probe against China’s IP theft and for making it difficult for US companies to access the vast Chinese market. For those who have been reading this newsletter, the irony won’t be lost on the fact that it is the US that is currently suffering from a pro-infringer syndrome, while China has been beefing up its IP enforcement system over the past years. Just a couple of week ago, Chinese President Xi Jinping “called for strengthened intellectual property rights protection and more stringent punishment for infringement” and declared that “IP infringers will pay a heavy price”. In parallel, the Chinese patent office (SIPO) announced that it was going to prioritize patent applications (and re-examination) “of patents on energy saving, environmental protection, new-generation information technology, high-end equipment manufacturing, new energy, intelligent manufacturing”, etc. And finally, China’s Higher People’s Court released new guidelines to clarify the availability of injunctive relief, even for Standard Essential Patents (SEP). For those resigned to the fact that it has been almost impossible for well over a decade for patent owners use the threat of an injunction to keep infringers honest, let alone for SEP, this is a major shift in trying to reestablish the full strength of patent rights; the only twist is this is actually happening in China… If you need more evidence that this is more than smoke and mirrors: a large US based NPE, GPNE Corp., is banking on these developments and currently suing Apple for $130M in China (of all places) for the alleged infringement of SEPs they own. In contrast, Japan is taking a diametrically opposite view and has threatened to subject SEP to a compulsory licensing scheme, which is pretty much the current de facto situation in the US.
Okay, you’ve made it this far; so here it is what REALLY grabbed my attention the past few weeks and may indicate that we are entering a new phase in the IP marketplace.
First, remember that for any market to be vibrant and sustainable, you need i) a certain equilibrium between supply and demand; ii) a reasonable level of clarity over what is being transacted and; iii) a mutual understanding as to what the goods being transacted are general worth. This is not where we have been the past 3-5 years, as we have seen a lot more sellers than buyers, a substantial majority of patents being challenged have been deemed invalid and there has been no real consensus on patent valuations, except that they were down significantly from a few years ago.
Well, here are a few signs that now point in the right direction for those of you, like me, who want to see their glass of Sangria half full. These are still embryonic, but nonetheless encouraging cues. First, we are starting to see new assertion based buyers coming in who are willing to pay cash upfront for patents. We recently wrote about a few of those just formed IP funds who claim to have tens of millions available to acquire patents. The latest in this group is well known NPE Dominion Harbor who just announced the creation of a new $50M investment fund to that end. When NPEs announce new investments of this nature, they either see things other don’t or are just wrong. Given DH’s track record historically, we will give them the benefit of the doubt that they know what they are doing. (They also profit from NOT being a Public IP company (PIPCO), which was never a good model to start with if your opponents can know any day how much cash you have in the bank).
Second, we are starting to see some Fortune 500 companies jumping into the fray and become more actively involved in the market but this time… as sellers. We will be able to report more on this soon. But one can easily appreciate that once large tech companies start exploring monetization of their own patents (and arguably get a fair price for those), they will have to tone down some of their own rhetoric that has been so detrimental to patent rights lately. We also saw an interesting announcement a few days ago whereby AT&T, Lenovo and Rambus have pooled resources to offer patents to startups against equity. This is a clever way to obviate the current uncertainty about patent valuations and rather trade in an uncertain asset class for an equally uncertain good of somewhat speculative value, shares from a startup… Regarding the uncertainty over the validity of patents, we also noted several decisions in the past weeks where the Federal Court circuit overturned PTAB findings where a given patent was found invalid, hopefully sending a clear signal that the tribunal is too often too dismissive of patent rights It is interesting to note also that new IPR petitions before the PTAB have gone down from a historical high 548 in Q1 2017 to only 287 in Q2 according to a recent Lex Machina report (see table below).
Most explain this sudden fall to the fact that the US Supreme Court has recently accepted to hear a case (Oil Sands) that could make IPRs unconstitutional. Time will tell.
On the other hand, actual patent lawsuits in the US were up almost 20% in Q2 over Q1 according to the same report, which one can interpret two ways: 1) we still have a patent troll problem or; 2) we have an efficient infringer problem Based on our own discussions with several agents in the IP ecosystem, our belief is that it is by far the latter, as suing infringers is still the only safe way in the US to get their proper attention and engage in a dialogue over what should have been a normal discussion around licensing, but for the infringer refusing to even sit at the table before it is sued. Maybe the recent announcement whereby Apple agreed to pay Nokia a whopping 2 billion dollars in IP royalties for access to the Nokia portfolio will send a message to the IP community that intellectual property rights ARE indeed valuable and must be compensated accordingly. One only wishes they will hear the call.
Other news and recently announced deals below…
Mobile esports outfit Skillz acquires patents for mobile streaming and tournaments technology
U.S. Patent 9,479,602 relates to the technology powering Skillz Arena, the company's event platform for organising, hosting and broadcasting mobile (more ...)
MPEG LA Announces Call for Patents Essential to ATSC 3.0
DENVER–(BUSINESS WIRE)–World licensing leader MPEG LA, LLC announced today a call for patents essential to ATSC 3.0 standards in order to (more ...)
Nobody wins patents like IBM, but Amazon and Facebook are picking up their pace
As has been the case for the last six years, IBM is leading in technology-patent-hoarding this year, averaging roughly 27.2 patents awarded each day (more ...)
How the Supreme Court could strengthen the patent system
Last month, the U.S. House Subcommittee on Courts, Intellectual Property and the Internet held a hearing titled “The Impact of Bad Patents on (more ...)
Patent Losers Piggyback on Supreme Court Constitutionality Review
Four companies that lost patent rights in America Invents Act challenges have bet their final appeals solely on a possible Supreme Court decision that (more ...)
World Intellectual Property Indicators 2016: Design Patent Highlights
The 2016 report dissects the macro trends associated with filing activity and registrations for 2015 in the following intellectual property areas: patents, (more ...)
AT&T, Lenovo To Offer Startups Patents For Equity
"Many early-stage startups raise venture capital on the promise of patentable technology, yet when they begin to scale, patent defense becomes. (more ...)
What To Expect in the Future with the STRONGER Patents Act of 2017
Motivation for the STRONGER Patents Act can be tied to the consequences of recent Supreme Court decisions and new administrative proceedings at (more ...)
China to prioritize patent examination in certain fields
BEIJING - China will prioritize the examination of patents in certain fields to improve patent licensing efficiency, the State Intellectual Property Office of (more ...)
Camtek Pays Rudolph $13M To End Patent Litigation War
Under the deal, the companies agreed not to take action against each other over three patents at the heart of multiple suits. Israel-based Camtek and (more ...)
Nokia Receives €1.7 Billion Upfront Payment From Apple
As per Nokia's July 27, 2017, Q2 earnings call transcript, the company got €1.7 billion upfront payment from Apple related to patents/technology (more ...)
In 2015 China overtook the US in the number of Artificial Intelligence Patents Filed, with Korea ...
Japanese research firm Astamuse and Nikkei Asian Review released data on the number of patents filed by 10 ten top countries regarding AI from (more ...)
Why are these people giving testimony to Congress on patent reform?
Why does Mapbox's viewpoint on patent litigation echo in the halls of Congress given the fact that it doesn't appear that it has faced abusive patent (more ...)
A Boston firm labeled a 'patent troll' by some says it is actually performing a service
The Boston Globe
Wendy Verlander is either a righteous avenger for ripped off inventors, or the new face of an old menace, the patent troll. Three years ago, Verlander (more ...)
HMD Global grabs 500 Nokia Design Patents including the 'Lumia Camera UI' From Microsoft
According to the latest document from European Union Intellectual Property Office (EUIPO), the global tech giant Microsoft has transferred around 500 (more ...)
America's Patent System: An amazingly resilient philosophy and entity
“Put simply, America's formula for economic success has always been STARTUPS + PATENTS = JOB CREATION AND ECONOMIC GROWTH.”. (more ...)
The future of patent protections
American innovation is at a crossroads today — and the future of invention in our country will be determined by our resolve to enforce patent (more ...)
Unmanned Aerial Vehicle Patents: A Survey
Given the broad range of countries deploying UAVs and the large number of applications for UAVs, we took a look at patent data from the last 20 years (more ...)
Patent Quality Relies on a Fictitious Narrative
The main tenets of patent critics have been that patents are poor quality, that patents hold up manufacturers and that patent “trolls” have unfairly (more ...)
Pantech Left with 3000 Patents Only in 2 Years after New Owner's Takeover
The local mobile phone industry has been concerned about a possibility that Solid will sell off Pantech's patents for money as it nears a shutdown of (more ...)
A Call for Enacting Urgent Patent Reform: A New Patent System for Securing US Technological ...
Capitol Building The U.S. patent system is the primary contributor for the U.S. economy. Since the foundering of the nation, the patent system has (more ...)
Oxbo Wins Patent Infringement Case Against H&S Mfg.
Seven Year Suit Settled: Philips wins $10.4M but fined $3.3M in defibrillator patent suit
Mylan, Aurobindo End Litigation Over Imaging Agent
Inventergy Enters Into a Licensing Program for Solar Panel Mounting Tech
Helinox’s …camping chair patent violation leads to rare small biz win over corp titans