Posts Tagged: "IP Dealmakers Forum"

Where is there currently value and opportunity in the patent industry? That is the question I asked a panel of experts recently. Not surprisingly, several of the experts who responded identified global markets as where opportunities currently exist, which is not surprising given the weakening of the U.S. patent system over recent years and a concerted effort by European and Chinese leaders to strengthen their respective patent regimes and marketplaces. Several others focus on opportunities that also exist for those companies that strategically view their patent portfolios and innovations as doorways to new markets as part of a growth strategy.

Are you bullish or bearish on the 2018 patent market? That is the question I asked a panel of experts recently. For the most part, those industry insiders who responded are bullish, although some are cautiously bullish. As you will read below, there seems to be a consensus that activity will be up in terms of deals in 2018, but relief from the downward pressure on prices experienced over the last several years likely will not be forthcoming in 2018.

The clear consensus seems to be that the patent licensing market is not dead, but that the U.S. market is in decline and due to a weakening of patent rights capital will go elsewhere.

Almost 100% of the pre-election patent reform lobbying efforts were focused on the campaign, which did not prevail and thus on the morning of November 9 the patent community woke up to being well behind in getting a rapport established with the incoming administration. Don’t be fooled by the seductive image of a drained swamp, those of us in the pro-patent community will need to be pro-active in our engagement with Washington if we want patent reforms that meet our expectations.

“At the end of the day innovation is important,” Jung explained before he lamented the fact that the United States “seems to be making it harder and harder to be competitive globally…” Jung ended his presentation by pointing out that in 1820 the United States contributed only 1.8% of world GDP, but that thanks to an innovation economy the United States peaked at about 30% of world GDP, “predominantly driven by invention-driven industries like automotive, like aerospace, like pharmaceutical and so on. These were all based on key inventions that the US dominated the landscape on. That’s clearly not going to be the case going forward. It’s going to be much more distributed across many different countries, which is why I think, again, diversity is going to be the key.”

If patent owners do not have the financial resources to pursue infringers the patent becomes nothing more than a wall decoration – a very expensive wall decoration. And getting funding is more difficult than ever. According to Ashley Keller, Managing Director of Gerchen Keller Capital, speaking on the last panel of the day on Monday at the IP Dealmakers Forum in New York City, they are funding 1 out of ever 100 cases they review these days.

“I don’t think investors care about names,” Croxall said. “I think they care about results. I have the troll conversation, but it is never with investors. Are they getting smarter about the risk of going to trial? I think they have… I think you get punished more for losing than rewarded for winning.” Croxall also acknowledged that the troll issue seems to have penetrated into the jury box. Hartstein would later agree that public IP companies get punished at least twice as much with a litigation loss as compared with a litigation victory.

Ashley Keller: ”I am mildly bullish, because we’re coming from such a low point that it is likely to improve from here. We just talked about the Supreme Court and the willfulness case. I also think that Europe’s unitary patent system is going to be an eye-opener, because it has the potential to be better than our system’s status quo. Competition is a healthy force, and the new system will drive innovation over there. People are going to pay attention to that, and as a consequence, it may improve things over here.”

Ashley Keller: ”I think the market is challenging right now. I wouldn’t say it’s deteriorating—it’s more stable than it’s been—but I think it’s a challenging market. There has been a fair amount of court activity, with a lot of it potentially negative for patent monetization and patentees. In terms of things on the horizon, Congress seems to perhaps have decided not to pursue patent reform this year, but that is always something that’s looming large in the background. And some of the reform proposals had some decent ideas in them, but they were sandwiched between some ideas that were potentially going to weaken patent rights even further. So until that risk is decidedly off the table, I think the patentees have to be cognizant of it. All of that leads to a difficult environment for monetizing IP rights for the moment.”

Speaking without notes, Walker was in rare form. He spoke about everything from job creation to the need to allow innovators to benefit from the fruits of their labors… If you want an engine to create jobs you have to have inventors who bring value. “Make no mistake, at the core is invention and innovation, pick your term, they are one in the same,” Walker said. Without customers we don’t have jobs, and you cannot get customers without solving a problem and having some kind of competitive advantage. “If we don’t have a strong ecosystem that supports innovation we are going to have less of it. This isn’t rocket science,” he exclaimed. If we make something complicated we will have less of it.