Posts Tagged: "The Intangible Investor"

After a year-long process involving 38 state organizations and dozens of individual representatives, IP rights has been selected as the topic for the 2024-2025 debate competition by The National Federation of State High School Associations (NFHS). “Should the U.S. strengthen intellectual property rights” was chosen over “Nuclear Weapons Reduction” by a 25-17 vote in the final balloting process. In addition to NHFS and state debate associations, those who helped to determine the outcome included the National Speech and Debate Association, the National Catholic Forensic League, the National Association for Urban Debate Leagues and the Nation Debate Coaches Association.

Words can have profound impact. The term “patent troll,” coined by an Intel litigator, has done incalculable damage. First use is attributed to Peter Detkin, who is said to have deployed it in 2001 to belittle plaintiffs in a patent case involving the chipmaker. Shortly after its appearance, Detkin emerged as what some in the tech world would consider a bad actor. He co-founded Intellectual Ventures, a company that raised $5.5 billion to acquire more than 40,000 patents and applications for sale, license or enforcement. The IP community needs to be more vigilant about preventing parties of interest and the media from controlling the IP narrative.

Reports of the death of the movies at the hands of IP have been greatly exaggerated. Movie ticket sales are down and may never recover from pre-pandemic highs. The actors and writers strike will not help but the scarcity of new product might. The studios are racing to screen franchise movies that put people back into theater seats. IP rights associated with franchises – Spider-Man, Iron Man, the Avengers, Indiana Jones, Star Wars, Mission Impossible – are being blamed for turning the movies into a veritable video game more focused on effects than people.

The simplest facts are sometimes the most difficult to comprehend. Patent suits are not as pervasive as they are portrayed in the media or by defendants. Remarkably few are filed relative to the number of patents that are active. The necessity to litigate patent disputes to get the attention of potential infringers and hold a meaningful licensing discussion has likely increased the total number of suits filed. If it has, it has not had much of an impact on the net total. This suggests that many patent holders who should be suing are not.

Copyrights are the most widely held form of intellectual property. They are also the most infringed. Many creators are unaware their rights even exist or how they can be used. Most do not have a clue how they impact commerce and society. A range of creators and copyright holders, from high school students to Warner Media to Beyonce, individuals and businesses, have generated a cornucopia of content, fueled by faster digital processing and virtually unlimited storage. In theory, most of it is protected under copyright law. Most people, and many businesses, have been known to infringe them, no matter their value, often with impunity. Earlier this year, the U.S. Copyright Office established a small claims system for copyright to slow infringement and prevent rightful owners, small and large, from being routinely ripped off. 

The rise in the value of crypto currencies in just three years to $3 trillion is vexing to businesses, investors and IP professionals who are struggling to understanding where they fit in. The ascendance of non-fungible tokens (NFTs) as an asset class also has caught practically everyone off-guard. Many intellectual property owners believe that these blockchain-based disruptions have created opportunity, while others see a darker and more impermeant scenario. People want to know if NFTs and distributed ledgers are good for IP rights and creators – a self-proclaimed boon to innovation and access – or are they a passing storm?

A new crime drama, The Billion Dollar Code, is a fascinating breakthrough mini-series that illustrates the legal challenges of inventions and inventors in a world where technology giants can refuse to acknowledge the source of ideas they do not control. The popular four-part Netflix mini-series achieves uncanny success not only in depicting an epic legal battle but doing it over four plus hours in German with subtitles and an abundance of algorithm detail and trial preparation. It is reminiscent of Chernobyl, HBO’s award-winning series that turned the complex series of events and failures, both technical and human, leading to a nuclear core meltdown into award-winning entertainment.

From the perspective of the Intangible Investor, 2022 will be a year of new opportunities and transitional growth. IP business models will evolve, and risk and return calculations will become more reliable. In the decade since the America Invents Act (AIA) was enacted, patent licensing challenges have increased for many technology companies and independent inventors. The neutering of software, e-commerce and algorithm patents are at least partly responsible but, amazingly, software-related patents represent almost two-thirds of U.S. grants for the first half of 2021.

Director Quentin Tarantino’s 1994 Pulp Fiction, considered among the most influential films in modern history, has emerged as a test case of sorts for issuing non-fungible tokens (NFTs) that relate to a copyright-protected work. The NFTs are being sold independent of Miramax, the producer and owner of the rights to the film, who says its ownership rights are being violated. The lawsuit, filed in the U.S. District Court for the Central District of California last week, also accused Tarantino of breach of contract, trademark infringement and unfair competition, according to court documents.

Millions of content creators hoping to establish a cash machine on platforms like TikTok, YouTube and Instagram are learning that it takes more than lively moves and thousands of followers to be taken seriously. They are also discovering that not all creators are created equal, even when they are the source. Content on TikTok and other social media platforms is theoretically copyrightable. In practice, however, the IP rights of social media creators today are less clear. Work generated by lesser known creators, especially if they are young and Black, is being stolen with little apparent recourse.

With the value of his music catalogue still subject to an ongoing dispute between the trust managing his estate and the IRS, Prince, who died in 2016, has a new partner. Primary Wave, whose catalog includes songs by Nirvana, Bob Marley, Ray Charles and Smokey Robinson, has taken a roughly 50% stake in Prince’s estate, buying out the interests of three of the late musician’s siblings. Primary Wave is said to have $1.6 billion in investible assets. A highly creative and successful writer, producer and performer, Prince was also a savvy IP strategist, who sought to control his work, name and image. He was a fierce defender of his intellectual property rights, and was involved in a series of legal actions against businesses and individuals using his music and other IP without his authorization. He also railed against his record company, which sought to assert ownership rights over his catalogue and name.

What intellectual property (IP) rights achieve, and for whom, is a mystery to most people, including heads of state. President-elect Biden’s ambitious plan to support all of America’s workers through R&D investment, inclusion and by combatting IP theft from China, ‘Made in All of America,’ is well-timed. But it is unlikely to have the desired impact without the backing of reliable IP rights. Biden’s initiatives will require capital and non-contentious licensing to succeed. Good intentions aside, without support from a fully functioning IP system, do not expect America’s workers to be in a position to cash in on research and startups or to challenge China’s stated goal to dominate in areas of innovation and technology by 2025.  

One of street artist Banksy’s most iconic images—a mural sprayed on a Jerusalem building of a protester preparing to hurl flowers—failed to win trademark approval from the European Union in September because the European Union Intellectual Property Office (EUIPO) doubted the sincerity of his attempt to merchandise the image. Banksy had hoped that the trademark would prevent unauthorized use of the image by a greeting card company, Yorkshire-based Full Colour Black. Famously private, the artist elected the unorthodox strategy of seeking trademark protection. The EUIPO said the artist’s company, Pest Control, had filed the mark in order to avoid using copyright laws, which would have required him to reveal his true identity—something he has managed to keep hidden for more than 15 years. (There are many theories about Banksy, including the possibility that he is a “we,” not a single individual but a team of street artists or artisans assisting him.) A copyright also would have limited the term of coverage.

Intellectual property rights continue to be the Rodney Dangerfield of assets – they “can’t get no respect.” The reasons are complex, but not terribly surprising, given the increased speed and importance of technology in recent years. Compounding the disconnect are many individuals and businesses who prefer to view IP rights as impediments, not assets that can be licensed or otherwise monetized. In their mind, pilfering content, using someone else’s invention or borrowing a name or image is akin to a “white” lie that does no real harm. This myth has been perpetuated over time in different ways by other IP holders and consumers who would prefer not to pay for what they need. The result is a strangely inhospitable environment for IP that dissuades innovation and depresses value.