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IP Market Updates
Read by over 12,000 professionals in the IP, business, and investment community.
 

June 26, 2017

Last week was IPBC Global. This annual gathering attracts the who’s who in the IP business community with over 500 of the C-suite representatives of most organizations that matter in the IP space, including operating companies, NPEs (both publicly and privately owned), IP boutique law firms, investors, service providers who specialize in patent analytics and reverse engineering of complex products for the purpose of establishing infringement, and the very few intermediaries like us who are still alive and kicking …

I won’t bother you with a detailed summary of the two-day conference, as the IAM reporting staff, as always, did a great job distilling the substance of Day 1 and Day 2.

What should be interesting for this audience is that such gathering is always a great venue to feel the pulse of where things are going and measure the overall level of optimism (or the absence thereof) toward the IP market in general. On this aspect and if you are to believe a certain consensus that was emerging, many appear – for the first time maybe in 3 years- cautiously optimistic about the overall health of the market. Some of this cautious optimism results from seeing that the discourse is finally changing after several years of almost uninterrupted bashing of patent enforcement activities, which in turn has led to a significant erosion of patent rights in the US.  Indeed, and just as the IPBC Global was wrapping up, the STRONGER Patent Act – a rare bipartisan bill, was introduced into the US Senate on June 21st by 4 US Senators. 

While such a bill is not likely to become law (not unlike the 6 other related patent bills introduced so far), it is nonetheless the first one introduced under the new Congress and a barometer that things may be changing. It would appear that several elected officials have finally become convinced the current state of affairs is doing structural damage to the economy by creating uncertainty over the patent system as a whole, which discourages innovation and its funding. It is not every day that you read a quote like the following from a US senator: “We must work together to ensure that the patent laws keep up with the innovators, so their ideas and businesses can fuel the American economy for generations to come. This means working to ensure that a patent continues to play its historic role in enabling inventors and small businesses to get funding and protect their ideas from being copied by larger corporate infringers.”  Among other things, the new bill calls for measures to make injunctive relief against infringers easier to obtain (currently, it is practically impossible to obtain one), and to harmonize the PTAB and Federal Court tests for determining whether a patent is valid, something the Supreme Court refused to do a few months ago when it had the chance. The bill has garnered some important support so far from several organizations, while the anti-patent lobby didn’t take long to voice its concerns

At the very least, this should help continue to provide a much-needed balance in the rhetoric and let the facts speak, for a change. In this regard, a recent and still little-known report from some Harvard and U of Chicago professors “found a strong positive relationship between patent activity and GDP growth at the state level. They [authors] predict that a state with four times as many patents as a less innovative state would become 30 percent richer in terms of GDP per capita from 1900 to 2000”.  We need more academic papers like this to inform people of both sides of the narrative so that we can finally move beyond the type of bogeyman arguments that we have been hearing for years. Innovation simply cannot be sustained over time if there is no corresponding protection to reward the inventors. One must not confuse abusive behaviors by a very few with IP rights themselves, which all patent owners should be able to rely on. It is as simple as that. 

This hint of optimism is also supported by the most recent 2017 benchmarking survey conducted by IAM among the IP community at large and received over 800 detailed responses from various leaders.  Below are some of the salient points from the results collated by IAM:

* 34% of operating company respondents report that their organization has been purchasing patents this year, compared to 32% last year.
*  Last year, 48% of operating company respondents stated that prices had fallen; this year, 36% are reporting further falls, with 51% of NPEs saying the same (compared to 71% in 2016).
*  According to both operating company and NPE respondents, the three major contributing factors to these low prices, in order of importance, are:
* the inter partes review system in the United States;
* the US Supreme Court’s Alice 
decision; and, 
* a greater availability of patents on the transactions market.
*  Nevertheless, operating companies and NPEs alike see US-issued patents as being the most valuable assets in their portfolios. Operating companies rate UK and Korean patents as the next most important, while NPEs go for German and Korean.
*  When it comes to IP licensing, 8% of operating company respondents say that royalty rates have fallen, compared to 16% last year. However, the number reporting that royalty rates have risen has also decreased – and that from an already low percentage (4% in 2016 to 2% in 2017).
*  Fewer operating company respondents say they are seeking licensing opportunities outside the United States this year (9%, compared to last year’s 13%). The decline on the NPE side has been even more dramatic: 30% told IAM last year that looking beyond the United States was part of their licensing strategy, falling to 17% this year. This might be explained by uncertainty over the Unified Patent Court and Brexit, or a lack of resources that is making it more difficult to enter overseas markets. 


While none of the above is cause for great joy in isolation, it marks what we think is the bottoming out of the market and we can attest that prices for quality patents have already started to rise slightly since the survey was conducted this past February and March. Our own deal flow (we see 3-5 portfolios per day and talk to hundreds of buyers on a regular basis) and recent offers received for the portfolios we have under brokerage indicate that, although there are more sellers than ever, there are also several new buyers coming to the table, many of which are willing to pay a fair (or at least “fairer”) price for patents. We have even started to see again NPEs making offers with a non-trivial upfront cash component! We also foresee a potential temporary bump in prices (which could become permanent) while the market awaits for the US Supreme Court to hear the case of Oil Sands (which we discussed in more details last week). Some players may indeed want to hedge their risks should the Supreme Court rule PTABs IPR proceedings to be unconstitutional. Since IPRs have been suggested as the first culprit for the current market conditions (see above), it does make sense to acquire assets at today’s valuation in case they go up significantly in a few months. One thing is sure; they can’t go any lower!

Finally, one last piece of news for our European friends, albeit not a positive one: the German court has put the implementation of the Unified Patent System (UPC) on hold while it is preparing to hear a challenge to its constitutionality.  Since there were also already some trepidations about the fate of the UPC as a result of Brexit, Europe now needs Germany and France, the two largest beneficiaries of the new system, to put all their weight behind it if it stands a chance to pass.

Talking about France, I am taking an apparently overdue one week vacation in the middle of the Hexagone, where I have been promised to find fresh baguettes and cheese, spotted cows and…spotty wi-fi!  So our next column will likely be in a couple of weeks. Meanwhile, thanks for reading this and for all the supportive comments I keep receiving from people who tell me they find it informative and (mostly) easy to digest.  You make my day each time and I’ll try to keep it this way! :-)

Other news and recently announced deals below…


 

NEWS


 Indian PM Modi urged to remain committed to affordable drugs during meeting with Trump 
Times of India 
India's existing law sets the bar higher than most countries, including US, for which medicines deserve patents, allowing people to gain access to (more…)
    
 Supreme Court to Decide the Constitutionality of Inter Partes Review 
The National Law Review 
In a move that could drastically change the patent law landscape, the United States Supreme Court recently granted certiorari in Oil States Energy (more…)
    
 Intellectual Ventures Didn't Own ITC Probe Patents: Car Cos. 
Law360
Patent holding company Intellectual Ventures II LLC said in its March ITC complaint that the car companies had imported cars incorporating five (more…)
    
 Novel Idea: Pick a Pro-Patent Patent Office Chief 
Morning Consult 
Following five months of intrigue, the last Obama-appointed head of the patent office, Michelle Lee, has resigned. President Donald Trump will now (more…)
    
 In Fintech, Trade Secrets May Be Replacing Patent Applications 
Corporate Counsel
Recent reports indicate that financial technology patents are on the rise. Some attorneys believe the reason is simply that there are more entrants into (more…)
    
 The bipartisan Stronger Patents Act will protect America's perpetual motion machine: innovation 
Washington Examiner 
Patents are the lifeblood of innovation. They give developers the assurance that the time and effort they put into a project can be monetized. Patents (more…)

 Apple ups the stakes on patent royalties battle with Qualcomm 
The Register 
Apple is expanding its legal war with Qualcomm to include an attempt at having the chip designer's patents thrown out. The Cupertino giant filed an (more…)
    
 IPR Victory over Unified Patents Strengthens Sisvel Paten
Business Wire
NONE, Italy--(BUSINESS WIRE)--Sisvel has successfully defended institution of Inter Parties Review (Patent Board Case Number IPR2017-00565) (more…)
    
 Supreme Court and top patent court rarely see eye to eye 
Reuters 
Tellingly, Monday's decision related to trademarks, not patents. ... all six patent-related decisions by the U.S. Court of Appeals for the Federal Circuit, (more…)
    
 Academic Patent Licensing Helps Drive the US Economy 
IPWatchdog.com 
During this twenty year period, academic patent licensing contributed as much as $1.33 trillion to U.S. gross industry output, $591 million to the gross (more…)
    
 End of Laches Might Increase Declaratory Judgement Actions 
IPWatchdog.com 
21, 2017) eliminated the equitable defense of laches in patent cases. While time will reveal the impact of the SCA decision, elimination of laches, (more…)

 Trump can finally make American patents great again 
The Hill
Patent rights – a subsidiary of the property right – ensure that inventors, entrepreneurs, and even corporations have an incentive to engage in (more…)
    
 REVEALED: Russia abruptly approved long dormant Trump patents on Election Day 
Raw Story 
According to the New York Times, the abrupt renewal of unused and decades-old patents belonging to President Donald Trump in Russia are further (more…)
 

RECENT DEALS


 IP Bridge Enters into New Patent License Agreement for IP Bridge’s Wireless Telecom Standard-Essential Patents
TOKYO, JAPAN, June 23, 2017 – – Godo Kaisha IP Bridge 1, a wholly-owned subsidiary of IP Bridge, Inc. (more…)

 How Cisco’s IP Strategy to Stop Arista Went Bust
Scott Graham, The Recorder Two and a half years ago, Cisco Systems Inc. declared IP war on networking rival Arista (more…)

 Cipla, Roche Settle Cancer Drug Patent Case
by Arpan Chaturvedi Drug manufacturer Cipla Ltd. on Thursday informed the Supreme Court that it had reached a settlement in (more…)

 Toshiba, Intellectual Ventures To Settle Chip Patent Case
Law360, New York (June 21, 2017, 8:52 PM EDT) -- Toshiba and Intellectual Ventures stipulated Tuesday that they have settled (more…)

 
Louis Carbonneau, Founder & CEO
(
IAM World's Leading IP Strategists since 2012


Tangible IP is a strategic IP advisory firm and the global leader in the sale and acquisition of high-quality patents, with a proven track record of over 2000 patents successfully brokered. If you are looking for strategic IP advice or have patents that could be monetized to raise capital or reinvest into your R&D, please contact us at info@tangibleip.biz.
 
Recent Events
Mr. Carbonneau attended the annual IP Business Conference in Ottawa, Canada on June 18-20, 2017. 
***
On April 26, 2017, Mr. Carbonneau was a keynote speaker at the 9th bi-annual edition of FORPIQ conference in Montreal where he talked about Embracing the New IP Reality.  
***
On May 3, 2017, Mr. Carbonneau spoke at the 2nd Annual Cleantech Summit of Sustainable Development Technology Canada (SDTC) in Ottawa. SDTC is an independent national public entity that funds Canadian cleantech projects and coaches the companies that lead them as they move their ground-breaking technologies to market. Mr. Carbonneau moderated a panel discussing a national IP strategy for the clean tech industry.  
New Patent Sale Completed
Tangible IP recently closed a patent sale in the field of Critical Notification and Information Management Systems. We have closed on 4 new portfolio sales since the beginning of the year and have more transactions in closing. Look for more public announcements shortly.

New Portfolios for Sale
We have several patent portfolios for sale, most of them with detailed evidence of use (EoU). To see all available portfolios, or to submit patents for a free evaluation, visit our website.
 
Our services are designed to form the building blocks of a complete IP ecosystem, from due diligence to sophisticated strategic advisory, from valuation to complex sales and IP licensing program. Most services can be procured separately or combined to better fit your needs and minimize duplicate costs. In most cases, you will get valuable insights and strategic tools to create and maintain a sustainable competitive advantage for much less than the price of filing a single patent application.
Patent Monetization Services Strategic Advisory Services
Past Newsletters

June 19, 2017
June 6, 2017
May 15, 2017
April 30, 2017
April 24, 2017
April 10, 2017
March 31, 2017
March 23, 2017
February 24, 2017
February 21, 2017
February 3, 2017
December 6, 2016
November 29, 2016
November 22, 2016
November 15, 2016
November 7, 2016
October 27, 2016
October 17, 2016
October 9, 2016
October 3, 2016
August 15, 2016
July 29, 2016
July 11, 2016
July 1, 2016
June 20, 2016
May 31, 2016
May 17, 2016
April 22, 2016
April 11, 2016
March 17, 2016
March 7, 2016
February 29, 2016
February 22, 2016

 

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