Posts Tagged: "Licensing"

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.

Innovation and how to foster next generation technologies is a topic of very active discussion within businesses across the country. But how can America continue to be one of the most innovative countries in the world? The rapid adoption of IP management and licensing platforms built around social collaboration seems to lead us to one answer – open innovation. Indeed, with today’s technology allowing for the seamless transfer of information – R&D departments have little to no choice but to begin to embrace the open innovation model and use it to their advantage. Understanding your intellectual assets and being able to capitalize on them in order to generate more revenue must be an important part of managing IP and fostering innovation.

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.

There really is no one-size-fits-all approach to inventing that can be claimed to be a road-map to success that will work in all cases. Notwithstanding, there are certainly a number of things that can and should be done early in the inventing process if an inventor is going to pursue inventing as more than a hobby. I continually preach to inventors the need to follow what I call a “business responsible” approach, which is really just my way of counseling inventors to remember that the goal is to not only invent but to hopefully make some money. Truthfully, the goal is to make more money than what has been invested, which is how the United States Congress defined “success” in the American Inventors Protection Act of 1999.  The odds of being successful with one of your inventions increase dramatically if you engage in some simple steps to ensure you are not investing time and money on an invention that has little promise.

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.

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.

In addition to key executives from Lifetime Brands, on hand for the day will be Warren Tuttle, Lifetime Brands External Open Innovation Director and President of the United Inventors Association. Steve Greenberg, author of Gadget Nation and host of Food Network’s television program “Invention Hunters” will also be at the event to meet and greet inventors. I personally know both Warren and Steve and they are certainly two of the good guys in the industry. Therefore, I am happy to recommend this event to inventors.

In all cases, the IEEE, JEDEC, ITU and TIA policies apply to both issued patents and pending applications (regardless of whether such applications are published). Further, all four policies make clear that the SSO will not get involved in the particulars as to what constitutes FRAND licensing practices. Interestingly, and for those paying attention, the IEEE, JEDEC and ITU policies require disclosure of essential patents, whereas the TIA policy simply encourages disclosure of essential patents. Again, there simply is no generally-accepted test to determine whether a particular license offer satisfies the reasonable aspect of an SSO participant’s FRAND commitment. How does this play out in practical terms? A recent case is instructive.

The overarching theme of this book is to approach inventing in a business responsible way, so Janessa had me on page 1. Many who are unfamiliar with the trials and tribulations of inventors frequently fail to realize that inventors are highly intelligent and very creative. But like all intelligent and creative individuals engaged in a project, they need direction. She guides inventors in gentle, but firm ways, explaining what might otherwise seem obvious, but when you work with inventors daily you realize business savvy and prowess is not always where inventors excel. So when Janessa starts by explaining the importance of time management, scheduling and meeting promised deadlines she demonstrates an uncommon level of understanding with respect to both the questions inventors have and the knowledge they absolutely need to know to succeed.