Posts Tagged: "investment"

With summer underway in the United States, we want to believe the global pandemic is ending. In many cities, restaurants are at near-full capacity, scaled-back festivals are taking place, and companies are preparing to gradually welcome workers back into the office. Meanwhile, other cities around the world haven’t been as lucky. Flashpoints across India continue to fuel that country’s spike in COVID-19 cases while residents of Tokyo, with their low vaccination rates, nervously await the Summer Olympic Games this August. The African continent is experiencing a multi-variant and potentially devastating resurgence of cases.

The business world has fundamentally changed, but most business people seem not to have noticed. Intangible assets and investments are increasingly dominating the leading economies. The world’s largest retailer holds no inventory; the world’s largest taxi service owns no cars; and the world’s largest hotel chain has no rooms. Property, plant, and equipment are no longer a company’s most vital assets. Intangible assets are swallowing the collective balance sheets of the strongest and most successful economies throughout the world—and are increasingly dominating investment and growth in such economies. Because the intangible revolution is only a few decades old, many companies have yet to develop or otherwise obtain robust intellectual capital management capabilities, including effective risk management of their intangible assets. Though virtually no mature businesses would consider operating without the protection of property and casualty insurance, very few companies effectively insure their intangible assets, despite such “assets that cannot be touched” often representing the most critical components of companies’ success and survival. This is partly because traditional IP insurance solutions have generally failed to meet the needs of corporate buyers.

Protecting IP means securing a portion of a $1.2 trillion industry and the 29 million jobs created directly and indirectly by the mobile connectivity ecosystem. As companies like InterDigital contribute to finalizing the new 5G standard, actions by the Trump Administration to decrease IP theft from China, as well as new policies from the USPTO, are building confidence to encourage investment by U.S. companies that will lead to the development of exciting future technologies. Through smart policy-making and an understanding of the value of these technologies and the standardization process, the U.S. will continue to be a hub for innovation and economy will continue to grow stronger.

Patent broker Brad Close notes that encumbrances can have the effect of reducing a patent’s value by up to 100 percent, practically rendering a patent valueless on the market. “If the only companies which are potential targets for a license are already licensed, then the intellectual property is essentially worthless,” Close said. “If a startup is considering entering into an agreement that would place an encumbrance upon a patent, I would advise them to be very sure that what they’re receiving in return offers adequate value and to take into consideration both their investors and the future of the business,” Close said.

The patent process is long and complex, but well worth the effort if it means protecting your invention and your new company. Key decisions made along the way can help simplify future steps in the process and make obtaining a patent significantly more efficient. Early on, determining a patent scope through patentability searches can help narrow a patent application to the important novel aspects that are most worthwhile to protect. Similarly, preparing a thorough provisional application can make the non-provisional application preparation much simpler and afford better protection against later published works or filings by others. By thinking about these key decisions ahead of time and being aware of the patent process, you can be more prepared when the time comes to seek protection for your invention.

On the morning of Thursday, July 19th, the House Permanent Select Committee on Intelligence held a hearing titled China’s Threat to American Government and Private Sector Research and Innovation Leadership. The day’s hearing was dedicated to discuss strategies, both legal and illicit, which are employed by the Chinese government and designed to gain a competitive advantage over the United States.

The day’s hearing featured discussion of actions the U.S. government should be taking in order to counter deceptive trade practices pursued by the Chinese government, a topic which has become a main theme of the administration of President Donald Trump… Despite initiatives like the Made in China 2025 program, there’s no way for the Chinese economy to get close to catching up to the United States’ competitive advantage in many industries over the next 20 to 30 years without cheating by stealing innovation according to panel witness Robert Atkinson, President of the Information Technology and Innovation Foundation. Atkinson argued in his opening statement for a stronger antitrust regime to go after specific Chinese firms, such as rules prohibiting Chinese firms that have stolen U.S. IP from using our nation’s banking and financial systems.

On the morning of Tuesday, June 26th, both the House Subcommittee on Research and Technology and the House Subcommittee on Energy held a hearing titled Artificial Intelligence – With Great Power Comes Great Responsibility. The day’s discussion centered on issues surrounding the nascent technological field of artificial intelligence (AI), including both the potential negative and positive impacts that improved AI technologies could pose to the U.S. workforce and society in general… The specter of increased Chinese investment into AI tech development was also discussed during the day’s hearing. During his opening remarks, Congressman Randy Weber (R-TX), chair of the House Energy Subcommittee, spoke to the concerns over increased tech investment by China into AI programs and how that threatens U.S. dominance in the field.

PTAB proceedings have radically changed the time to money for patent owners asserting U.S. patents against infringers. Additionally, the value of U.S. patents has dropped substantially since its peak in the 2012… Like many others, I applaud Director Iancu’s stated focus on the PTAB process and his concern about whether the U.S. patent system is fostering innovation investment and risk taking, especially for inventors, universities, and small to medium enterprises.

President Donald Trump signed a new space policy directive for human expansion across the solar system, a directive which hearkens at least slightly back to Horace Greeley’s “Go West, young man.” Increased human expansion in space will produce innovations that can improve human life on Earth to the benefit of U.S. consumers, provided our nation’s struggling IP regime can be righted for the proper commercialization of such inventions.

Once your patent has been awarded you may still need additional capital to turn that patent into a business. Fortunately it is not as difficult to find investors as you may think. Equity crowdfunding is on the path to surpass venture capital as the preferred way for start-ups and small businesses to raise capital. In a nutshell, equity crowdfunding is the sale of equity (or debt) in your business directly to investors using an online platform instead of a stock brokerage firm.  It is also less expensive than hiring one. Although direct to investor funding over the internet has been around since the late 1990s, it came of age with the JOBS Act in 2012.   

“In our time together today we are going to try and take stock of the health of the American patent system,” Michel began. “It is important to remember that the patent system was founded in the Constitution… and although the world ‘right’ appears many times in the Bill of Rights, in the original Constitution the only ‘right’ mentioned is the patent right.”… Investment is being disincentivized by uncertainty created by the aforementioned three waves of changes to the system. We should be looking at the impact on the flow of money, Michel explained.

Technology transfer is blocked in a weak patent system since companies employ the “efficient infringement” model. In a weak patent system, enforcement is expensive and burdensome, supplying the infringer with incentives to infringe. Rather than voluntarily license technology, incumbents engage in reverse hold out in which they ignore patents and refuse to deal with patent holders. When an entire industry engages in reverse hold out, that is, collective refusal to deal, which is enabled by a weak patent system with high barriers to enforcement, they exhibit anti-competitive behaviors. In fact, enforcement in the courts, as expensive as it is, is generally caused by the belligerence and refusal to deal by technology incumbents which force matters to the courts. Particularly in the absence of an injunction as a remedy for the patent holder, the patent holder can no longer possibly be considered a hold out because their patents cannot enforce an exclusive property patent right. In the pervasive business and political environment that enables the collective refusal to deal with patent-holding market entrants, with high transaction costs to patent enforcement and with reduced compensation from enforcement because of a reduction in patent remedies, there is no incentive to invest in innovation.