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Posts Tagged: "investors"

A toxic concoction of myth, media and money is killing the patent system

In the past decade, the patent system has been turned on its head. Inventors are now villainized as cartoon characters called patent trolls simply because they assert their hard-earned patent rights against corporations who steal their inventions. These infringing corporations have cleverly cultivated the myth that all patent owners are patent trolls by engaging high-powered lobbyists and public relations firms to loudly attack inventors. This toxic concoction of myth, media and money has gagged opposing voices effectively creating political cover for the government to make rapid and fundamental changes to patent law that skew the field toward big corporations at the expense of inventors and small innovation companies, including those high tech start-ups that are responsible for creating high paying jobs.

What ‘The Economist’ Doesn’t Get About Patents

In what can only be characterized as a bizarre, rambling, and intellectually dishonest article, ‘The Economist’ has inexplicably taken the position that patents are not necessary for innovation. The complexity of innovation today and the required investment necessary to innovate, as well as the highly speculative nature of innovation, seems lost on the author. It is surprising, and disappointing, that a publication like The Economist would turn a blind-eye to the underlying financial realities of innovation. Truthfully, The Economist owes its readers a sincere apology for this entire article. Some could, and probably should, call into question the motivations for building an anti-patent argument upon such a rotten foundation.

Innovation Requires Imagination, Vision and Risk Taking

Building a strong patent portfolio that meaningfully protects the innovation in question and continues to push outward into adjacent spaces, as important as it is, will only get you so far. The patent process is not the end goal, but rather a means to an end. Obtaining a strong patent or a strong patent portfolio must be viewed in the context of the greater business objective, which is to make money on the underlying innovation, which is not as easy today as it was even just a few years ago.

A Short History Lesson on Patent Policy

Starting before World War II and continuing throughout the 1950s, 60s and 70s, short sighted and now discredited government antitrust policies, coupled with judicial hostility toward patent enforcement and patent licensing, converged to reduce the enforceability of patents and to restrict the ability of patent owners to license their inventions. The result: foreign competitors began to capture entire industries that should have been dominated by U.S. companies that had pioneered the relevant technologies.

What if we don’t have sufficient intellectual property rights?

Fundamentally, patents facilitate access to VC financing, market entry and job creation. Without patents and an effective IP environment, the process stalls and, in some cases, firms may never emerge. Without adequate IP protection, innovators are unable to attract investments, business creation is slowed and jobs lost. Evidence suggests that this same story plays out, albeit with differing dynamics, across all sorts of firms and all nations. Economic prosperity relies on job growth, and it is clear that strong, effective IP rights have a role to play in creating both.

To patent or not to patent? The market reality for software patents

If you have any software patent that is essentially a software version of a human practice — something that was done in human practice — and you decide to write up a patent, even if you automated it in such a way and did things that the human brain could never do it will be problematic. If you can look at the patent and then make an argument that humans were doing this outside the software realm before you implemented it in software, under Alice, I think you’ve got a big problem.

Patents and Portfolio Value, Up or Down?

David Morland, a partner with 3LP Advisors, moderated the first panel. He lead off the segment by pointing out that in the United States patents are being both applied for and issued in record numbers year after year. He also started the substance of the program today by pointing out that the people who own patents in the United States do not seem to believe that the asset class has been devalued. “Maintenance fee payment rates have raised, particularly with respect to the twelve-year payment, which suggests that those who own the assets do not think they are diminishing in value,” Morland explained.

Exclusive Interview with Jaime Siegel of Acacia Research

Siegel: “I think this effort to destroy the value of intellectual property is a bigger wet towel on innovation. When startup companies, after they get their angel investing, go out to try and raise funds on round Bs and round Cs, one of the things that investors look at is whether or not that company has an innovation that is different and protectable so that the investors know that number one there is something in there that’s protectable so that they can protect their investment. And when companies, small companies that make the investment into intellectual property portfolio development it sends a signal, two signals. It sends a signal that, number one, they’re progressive enough and smart enough to think about protecting their innovation. And, number two, it provides collateral for the investments that the investors are making into the company. So if the company were to not be successful in its business, they would have this asset of an IP portfolio sitting there that could still be sold or otherwise monetized to help the investors recoup their investments.”

The Cost of Not Having Patent Protection

How many patent applications has your company filed today? If you are a typical new economy small tech company with software and internet centric technology or products, the number of patent applications your company filed today is probably zero. Of course filing and prosecuting patent applications is not cheap and that’s part of the explanation. However it is worth noting that most of the successful companies with software-heavy products, including those in the list above, have been filing patent applications from their very early days.

Patents are Important: Bursting the Twitter Patent Mythology

Twitter is a perfect case study to demonstrate just how important patents, particularly software patents, are to a start-up company that has aspirations of going public… In repeated filings with the Securities and Exchange Commission since October 2013, Twitter has explained over and over again just how important their patented technology is to the company. They have also repeatedly explained that unlike other companies and competitors, even with nearly 1,000 patents, their own patent portfolio is extremely small by comparison. This poses real concerns for Twitter, which is why they warn the SEC and investors of the ramifications of such a small patent portfolio with every new filing.

Does the law of innovation work against itself?

There is nothing wrong with academics obtaining research funding from corporate sponsors, and to Professor Tucker’s credit, she fully discloses her funding sources. It is important, however, to fully vet and scrutinize the resulting work product of such sponsored studies. The underlying data and methodology should be independently verified by subject-matter researchers and experts. Yet, no peer review of this paper had been made before Professor Tucker’s “results” were broadcast to the world. Because of the publicity this paper received, it is the purpose of my full paper to fill that void. Indeed, closer scrutiny of this article reveals that it can support none of the claims of the author or sponsors quoted above. This is because the study is fundamentally flawed and is fraught not only with methodology and analytical errors, but with fatal factual errors due to the assumption of false information.

Book Review: The Intangible Investor

Prosperity in the United States is now almost completely tied to innovation, and a prerequisite to successful innovation is access to capital. The central theme of Bruce Berman’s new book of timely essays, The Intangible Investor, focuses on the issues surrounding our innovation economy: capital, valuation and leveraging IP for business advantage. While are there are many sophisticated investors and business executives, the domain of intellectual property and intangible assets is very different from the bricks and mortar world that they inhabit. Unlike real estate, intangible assets are not scarce, can be infinitely replicated and wholly divided. That makes monetizing those patents that have value a formidable challenge.

Picking Strategic Partners: How and Why

In business and the corporate world, it’s all about who know. When bringing an invention idea to fruition, it’s all about whom you partner with. There are tangible, financial benefits to finding partners who offer services vital to your new company’s survival. These services may come from a designer, prototyper, patent lawyer or manufacturer. In other words, they bring to the table more than the deep pockets of a venture capitalist or angel investor.

Start-Up Reality: No Patent = No Funding, No Business, No Jobs

The log jam in patents issuances is not the only impediment to start-up job creation. Although it is certainly a big one. Tax and regulatory burdens on start ups have reached a critical mass in the last 10 years. A fact recognized by President Obama when he signed an Executive order last Tuesday ordering the removal of burdensome regulatory rules on business. Also a problem are the post 9-11 immigration policies that are driving many of the world’s best and brightest scientists and engineers to other countries. But the biggest job killer beside the patent backlog is the systemic destruction of our high tech manufacturing capacity.

Breakthroughs & Abandonment: Patent Abandon Rate is a Reliable Measure of Speculative Portfolios

Abandons per action can be interpreted as a level of speculation in applications. Applications that have high abandon rates are highly speculative. Most of the inventions described in these applications ultimately have little value and the applications are abandoned quickly. If a portfolio of speculative applications as a whole, however, has value, then that value is concentrated in a few “breakthrough” applications. For some investors, this is a very desirable characteristic and they may wish to seek out portfolios with high abandon ratios.