Posts Tagged: "license"

In the case of product sales, 58 institutions (31 percent of the 186 respondents) reported that 2,821 of their licenses paid $662 million in running royalties based on $37 billion in product sales, implying an average royalty rate of 1.8 percent. In the case of startups, 66 institutions (35 percent of the 186 respondents) reported employment of 24,653 by 1,731 operational startups, an average of 14 employees per startup. Assuming all 3,927 startups still operational averaged 14 employees, total employment would have been 55,929.

When the media paints images of all patents being bad they are doing a disservice to the industry and ignoring the good that has come from patented innovation and the sharing of such innovation via patent pools and other cross-licensing arrangements. Patent pooling is one example of a proven, effective tool that is helping industry better manage its licensing programs. By “pooling” patents from many license holders, licensors generally are able to lower transaction costs and administrative overhead, and benefit from a centralized model that encourages patent bundling and fair play. Licensees likewise enjoy advantages in the form of lower royalty fees and a single point of contact that eliminates the need to negotiate separately with multiple license holders.

Several public interest groups recently filed a march in petition under the Bayh-Dole Act asking NIH to force Abbott Laboratories to license its competitors for the production of Ritonavir, a drug used to treat AIDS.  Drug developers face a daunting task. For every 5,000 drugs tested, about five proceed to clinical trials. Perhaps one is eventually approved.  That one must not only pay for itself, but for all the company’s other drugs that died along the way. This grim math eludes the petitioners.

The theme of the annual meeting of the AIPF this year is “intellectual property as a corporate asset.” There are indeed presentations sprinkled across the two days of this meeting that relate specifically to this topic. Another recurring and equally treated topic is the use of the Internet in practice in a variety of contexts — attracting clients, networking generally and use of the Internet for investigations. Topics of particular interest included: (1) The Invisible Hand: Models for Monetizing Patents in the 21st Century; (2) Lies, Damn Lies, and Lawyers; (3) Contingent Fee Arrangements in Enforcing IP Rights; and (4) Economic Effect of Non Practicing Entities.

Last month, both the U.S. Senate and U.S. House of Representatives held hearings related to patent disputes, the ITC, SSOs and FRAND licensing – no doubt precipitated by the smart phone patent wars. On July 11, 2012, the full Senate Judiciary Committee held a hearing entitled “Oversight of the Impact on Competition of Exclusion Orders to Enforce Standard-Essential Patents.” Witnesses at the Senate hearing included the Acting Assistant Attorney General, Antitrust Division, U.S. Department of Justice, and the Commissioner of the Federal Trade Commission (FTC). A week later, on July 18, 2012, the House Judiciary Committee’s Subcommittee on Intellectual Property, Competition and the Internet held a hearing entitled “The International Trade Commission and Patent Disputes.” Witnesses at the House hearing included Professor Colleen Chien of Santa Clara University School of Law, IP Counsel for Ford, VP of Litigation for Cisco, the General Counsel of Tessera Technologies, and the President of The American Antitrust Institute (AAI).

By SENATOR BIRCH BAYH — What should we say about a steward that manages billions of dollars in public research funds not aimed at finding commercial products and turns them in to hundreds of billions of dollars in economic impact while supporting millions of jobs? You would think that a sincere “thank you” was in order. But many are saying that the system producing such riches is broken. Remarkable. The Bayh-Dole Act created no new bureaucracy, costs taxpayers nothing, and decentralized technology management out of Washington. It’s widely touted as a key in turning the U.S. economy around.

This deal will give GSK exclusive rights to BENLYSTA, which is a human monoclonal antibody that inhibits B-cell activating factor (BAFF) approved for treatment of systemic lupus erythematosus. It is believed that BENLYSTA has blockbuster potential. According to Human Genome Sciences, the principle patents covering BENLYSTA will generally expire between 2016 and 2023 in the United States and between 2016 and 2021 in the rest of the world. For 2011 sales of BENYLYSTA were approximately $52 million, but there is great optimism that the drug will become a blockbuster as it continues to gain market share and as it may ultimately be approved for treatment of other autoimmune diseases.

Licensing U.S. intellectual property strengthens the economy and improves our trade balance. Section 337, the statute that regulates unfair practices in import trade, is a key element of the nation’s trade laws and ensures that American innovators, including licensing companies, will not be harmed by the importation of goods that infringe valid and enforceable U.S. patents. Importers of foreign made products – both U.S. based and foreign companies – have appealed to Congress for several changes to Section 337 that would, in effect, limit access to the ITC and/or weaken the powers of the ITC to deal with cases of unfair trade practices. Weakening the ITC’s jurisdiction would benefit foreign economies, foreign competitors, and other foreign manufacturers to the detriment of the U.S. economy.

This is an interesting development, and one that seems to make sense from both perspectives. When giant corporations are suing each other it is because they are in immature markets, such as we see with the enormous patent litigation surrounding various smart phones, tablet devices and the operating systems that power them. Lawsuits are the mark of an immature market because in the end no one really ever wins, that is except for the lawyers. The patent litigators make out handsomely, and there is absolutely nothing wrong with that. My patent attorney brethren thank you immensely I’m sure, and I am hardly going to take issue with capitalism at work. If you want to sue someone and you have the funds to hire an attorney then have at it!

Earlier in the week BIO also unveiled another report it commissioned and which was authored by Lori Pressman, David Roessner, Jennifer Bond, Sumiye Okubo, and Mark Planting. This report, titled Taking Stock: How Global Biotechnology Benefits from Intellectual Property Rights, discusses the role of intellectual property rights in encouraging upstream research and development as well as downstream commercialization of biotechnology. More specifically, the report outlines how intellectual property rights and technology transfer mechanisms encourage collaboration and lead to the research and development of new biotechnologies, particularly in emerging and developing economies.

It is also probably correct to say that the current business model for licensing technologies is extremely inefficient, not only because of the lack of a central clearinghouse, but because many of those who would be most interested in acquiring rights to exciting new technologies are really too small to attract the interest of patent owners. Even if they are large enough to attract interest from patent owners it take real time and real money to acquire rights. You don’t simply walk into a neighborhood bodega and order the rights to X technology for Y dollars, put it into your knapsack and walk away. Negotiations are hardly standard, must take into account multiple unique scenarios and are like any other business deal — unique. That requires attorneys to get involved and we all know what happens then, right? Too frequently attorneys get in the way of doing a deal rather than facilitate one.

Preventing artificial supply-side constraints? Now my spidey-senses are activated. That sure has a familiar ring to it, doesn’t it? I am skeptical about the desire to eliminate market inefficiencies when combined with simultaneous attempts to drive down royalty payments, thereby compensating innovators only for some perceived benefit to the ultimate consumer. The goal of the first, to reduce inefficiencies in a bilateral licensing negotiation is laudable, but minimizing the “artificial supply side constraints” based on the market as viewed by the ultimate consumer is a recipe for undervaluing innovative value-adds. And let’s not forget that some (perhaps many) of these value-adds mean the difference between having desirable functionality or not, and having a viable product or not.

Ray Niro responds — There is nothing disingenuous about the licensing and enforcement of the Innovatio IP patent portfolio. Nor is this effort about “forcing quick licensing agreements” on questionable patents. The earliest of the Innovatio patents resulted from the pioneering work of Ronald Mahany and Robert Meier of Cedar Rapids, Iowa, in the early 1990s. Mahany and Meier are widely considered to be the “Fathers of Radio Frequency Local Area Networking Technology” – commonly referred to as wireless local area networking (“WLAN”) or “Wi-Fi.”

What’s troubling is that Hewlett Packard itself, the original startup headquartered in a garage, was one of the earliest and most-respected leaders of the 20th Century high-tech revolution that had its epicenter in Silicon Valley. It was William Hewlett who gave a 13-year-old Steve Jobs spare parts for a device Jobs was building — and a summer job as well. And it was Mr. Hewlett and his executive heirs who insisted that HP conscientiously patent its breakthrough innovations and fight against those that infringed those patents. HP today earns hundreds of millions of dollars annually by licensing its patent rights to others — according to IAM magazine, “at any one time, HP has about 150 licensing transactions in process.” And as the court dockets show, it certainly isn’t shy about filing suit against infringers who refuse to take a license.

In short, today’s smartphone patent wars are simply “back to the future” when it comes to how disruptive new industries are developed. Every major technological and industrial breakthrough in U.S. history — from the Industrial Revolution to the birth of the automobile and aircraft industries on up to today’s Internet and mobile communications revolutions — has been accompanied by exactly the same surge in patenting, patent trading, and patent litigation that we see today in the smartphone business. This is how the rights to breakthrough new technologies have always been distributed to those best positioned to commercialize them — to the benefit of the whole nation in terms of new jobs, new medical advances, and new products and services.