Patent holders, this year’s version of Allied Security Trust’s Industry Patent Purchase Program, “IP3,” is a good indication of where the demand is highest.
The 2018 fixed price, time-limited program AST and its members are searching for patents primarily in the following categories:
Artificial Intelligence / Machine Learning
Augmented Reality / Virtual Reality
Automotive / Transportation Services
Internet of Things / Connected Devices
Software / Web Services
Most technologies are no surprise, but others, like Augmented Reality/ Virtual Reality, may encourage lawyers and their clients to revisit portfolios. It is also good to see interest in Software Patents, as well.
The window for submitting patents for sale will be open from July 9 through July 20.
For complete IP3 2018 program details and to submit your patents for sale, go here.
The article states that the U.S. Department of Justice must use its power to move intellectual property rights like patents into mainstream acceptability, and prevent them from being undermined “under the guise of anti-competitive behavior.”
Authors James Rill, Senior Counsel at Baker & Botts, served as Assistant Attorney General for Antitrust at the U.S. Department of Justice; David J. Teece is Professor in Global Business and director of the Tusher Center for the Management of Intellectual Capital at the Walter A. Haas School of Business UC Berkeley and a renowned economist.
“Assistant Attorney General Makan Delrahim’s recent policy statements and enforcement actions have re-asserted the historical value of intellectual property rights,” say Rill and Teece.
“He has suggested that the value of these rights have been inappropriately curtailed by the misapplication of antitrust principles, which could threaten the future of U.S. innovation efforts. As a result, AAG Delrahim has begun to restore the balance between antitrust and intellectual property rights, and has moved this important issue to the forefront of antitrust discourse.”
“Empirical studies show that almost all classes of R&D activity are under-supported,” argues Professor Teece. “Two in particular are grossly under-compensated: (a) basic research and (b) enabling (or general purpose) technologies… consideration needs to be given to amplifying, not diminishing, incentives for upstream investment in R&D. Such investment is perhaps among the most precious that society makes.”
Teece cites Nobel Laureate economist Douglass North on the impact of innovation incentives:
Throughout man’s past he has continually developed new techniques, but the pace has been slow and intermittent. The primary reason has been that the incentives for developing new techniques have occurred sporadically. Typically, innovations could be copied at no cost by others and without any reward to the inventor or innovator.
Recent efforts to enlist antitrust as a lever against patents, says Professor Teece, “have threatened to undermine incentives for R&D in several important areas.”
Subtle, theory-based antitrust arguments around patent “hold up” are a handy disguise for implementers and antitrust agencies to use to under-reward and thereby under-incentivize legitimate innovators.
Responsible IP deal-making – where parties enter into licensing and other agreements mutually – has become something of a lost art. Not long ago, it was a best-practice.
Many companies need to in-license to practice the inventions that cover their products. Similarly, not every business has the capital to make products from its inventions. Those that do not, may need to out-license. Once a symbiotic relationship that could be effected without the need for litigation, much patent licensing has turned contentious and patent holders who wish to license are seen as bad actors.
The day of the so-called “troll,” where licensing businesses armed with nuisance suits forced businesses to settle, is long gone, the victim of increased patent uncertainty and the high cost of litigation.
What is responsible licensing in today’s environment? What are fair and reasonable terms? This conference will examine various sides of the issue.
IP CloseUp readers receive a 15% discount with a promo code or mention they saw this article. (Service providers may not be eligible.)
Participating in the day-long event are licensing executives from Dow, Nokia, Visa, Samsung, Cisco, Intel, among others. Panels include:
Building a successful patent licensing strategy
The good, the bad, and the ugly of licensing transactions
Strategic licensing scenarios
There will be ample breaks and time for networking.
Invention is about the future. Looking back at the technology and images that defined us, however, can provide an idea of where we are headed.
A case in point is the Apple II personal computer. The ad below appeared in the venerable Scientific American magazine in May 1980. It seems almost laughable in its blatant appeal to the ego, although it was on the certainly on track about the PC’s ability to empower individuals and encourage creativity.
Ben Franklin designing the kite that helped to discover electricity (below) is a provocative image. Franklin was the original “scientific” American – statesman, inventor, writer. The Apple II, introduced in 1977, came with 4K of memory, expandable to 48K. Its CPU speed was rated at 1 MHz. It was the kind of tool that could make genius even better.
Below is the original ad for the Apple II (full text is below the ad for easy reading).
What kind of man owns his own computer?
Rather revolutionary, the whole idea of owning your own computer? Not if you’re a diplomat, printer, scientist, inventor… or a kite designer, too. Today there’s Apple Computer. It’s designed to be a personal computer. To uncomplicate your life. And make you more effective.
It’s a wise man who owns an Apple.
If your time means money, Apple can help you make more of it. In an age of specialists, the most successful specialists stay away from uncreative drudgery. That’s where Apple comes in.
Apple is a real computer, right to the core. So just like big computers, it manages data, crunches numbers, keeps records, processes your information and prints reports. You concentrate on what you do best. And let Apple do the rest. Apple makes that easy with three programming languagesâ€” including Pascalâ€”that let you be your own software expert.
Apple, the computer worth not waiting for.
Time waiting for access to your company’s big mainframe is time wasted. What you need in your department on your desk is a computer that answers only to you…
Apple Computer. It’s less expensive than timesharing. More dependable than distributed processing. Far more flexible than centralized EDP. And, at less than $2500 (as shown), downright affordable.
Visit your local computer store.
You can join the personal computer revolution by visiting the Apple dealer in your neighborhood. We’ll give you his name when you call our toll-free number (800) 538-9696. In California, (800) 662-9238. Apple Computer, 10260 Bandley Drive, Cupertino, CA 95014.
A Manly Man
Note the ad’s manly images. (I guess 1980s women didn’t need a computer.) Ben Franklin was never a pinup for machismo, although he was said to be quite the lady’s man… $2,500 in 1980 is equivalent to about $8,000 today – a price almost no individual would be willing to pay for a personal computer. Computers have gotten smarter and smaller; people, not so much.
U.S. President Jimmy Carter proclaims a grain embargo against the USSR with the support of the European Commission
The Rubik’s Cube makes its international debut at The British Toy and Hobby Fair, Earl’s Court, London
The 1980 Winter Olympics took place in Lake Placid, New York
The United States boycotted the 1980 Summer Olympics in Moscow because of the Soviet invasion of Afghanistan
Pac-Man, the best-selling arcade game of all time, is released in Japan
Another print ad introduced the Apple II in September 1977. It included a $598 board-only version for “do-it-yourself hobbyists.”
And while we are on the subject, Autobiography of Benjamin Franklin, available for free, here, is an unusually timely and readable work, especially for anyone interested in invention and the creative process.
Frank Woodworth Pine wrote that it was “the most remarkable of all the remarkable histories of our self-made men.” with Franklin as the greatest exemplar of the “self-made man”.
More nations today have an innovation policy than do not – that is except for the U.S.
The U.S. not only has no centralized innovation and intellectual property policy, it has no real strategy for making IP rights more meaningful and American businesses more competitive in the wake of initiatives from China.
Some believe it is not the job of policymakers to tinker with free-markets or favor certain industries. Well, that may have worked in the past, but with China committed to dominating global innovation – and with unlimited capital – the U.S. must reexamine its strategies.
What it is not supposed to do is assume that it is business as usual.
The United States has a tendency to repeat past mistakes, such as in the case of so-called “Japan, Inc.,” which devastated the auto and electronics industries with more advanced products. It is currently contending with China, which has approximately ten times the population of Japan and has quadrupled its investment in technology over the past decade.
“US innovation policy: Time for a makeover,” a fresh take on dealing with competition in the Intangible Investor, can be found in the July IAM magazine, out this week, here.
Innovation policy in the United States is mostly a series of suggested strategies and directives from several government agencies and industry organisations primarily designed to address foreign IP infringement (i.e., theft). It is often tied to science and economic policy, and is typically reactive – not proactive.
“Better innovation policy not only permits established industries to compete,” says the Intangible Investor, “it facilitates success for the next generation of inventors, authors, designers and software developers. It also helps to supply context for a confused and wary public susceptible to false media narratives – intellectual property is not the enemy, nor are rights holders and lawyers.”
Enforcement is Not Policy
Trump’s anger about China IP violations, justified or not, does not constitute an innovation policy. Innovation policy is not just about enforcement or supporting the science, technology, engineering and math (STEM) curriculum for the next generation of inventors. It is about understanding the current economic and political context and responding as a nation.
“The FAANGs, and others, who dominate the competition and monetize their customers’ information, often without permission, realize they are increasingly symbols of bad business behavior,” Bruce Berman wrote recently in IP Watchdog. “The heat they feel from regulators in Europe and the U.S. will continue to rise.
“IP infringement will come to be seen as an increasingly important part of their bad behavior. The timing is perfect for them to step back and step up and show the leadership they heretofore have ignored regarding IP rights. Movement toward a responsible IP middle ground – a less entrenched position that recognizes others’ rights and actively conveys a greater willingness to share successes, not only defend them, will help to inform a meaningful IP policy.”
The Canadian government has announced that it is investing $88.3M CD in a new IP strategy that incorporates tools and education, and improves literacy. Canada’s population is approximately one-tenth of that of the U.S.’
The government wants to help business, creators, entrepreneurs, and investors better understand, protect and access intellectual property (IP) through a comprehensive IP Strategy. The full story can be read on IP Watchdog.
Legislation, Literacy, Advice
The IP Strategy will make changes in three key areas: Legislation, Literacy, and Advice, according to a statement and Canada’s IP Strategy website.
The Canadian government announcement said that intellectual property is a key component of an innovation economy. It helps Canadian innovators reach commercial success, further discovery and create middle-class jobs by protecting their ideas and ensuring they reap the full rewards of their inventions and creations.
Canada’s IP Strategy will help Canadian entrepreneurs better understand and protect intellectual property and also provide better access to shared intellectual property. Canada is a leader in research, science, creation, and invention, but has lagged in commercializing innovations.
The new IP strategy received praise from a range of industries, from aerospace to biotech to entertainment.
A suite of seminars, training and information resources on the subject of intellectual property (IP) is tailored for businesses and innovators. As part of the “Literacy and Advice” section of IP Strategy, the Canadian IP Office (CIPO) will:
Support domestic and international engagement between Indigenous people and decision makers as well as for research activities and capacity building.
Provide tools to support Canadian businesses as they learn about IP and pursue their own IP strategies.
Earlier this year, the UK IP Office (UK IPO) introduced a copyright awareness program with a series of educational animations for students seven to eleven-years-old. “Nancy and the Meerkats,” under the Cracking Ideas initiative, met with nasty opposition from media like Techdirt and Torrent Freak. They believe that helping children to understand IP right from wrong is a little more than brainwashing. These publications often have an IP axe to grind and believe that content and code should be broadly shared, and that piracy is not necessarily theft.
“UK Teaches 7-Year-Olds that Piracy is Stealing” was the title of the Torrent Freak article, implying that it is not. Piracy is not OK, even if some coders, content providers, and patent infringers believe it is. A BBC story attempted to sort things out, but the negative publicity appeared to put the educators on the defensive when it is the infringers who should be. Teaching children IP right from wrong is part of good parenting.
On Tuesday an open briefing was held in Washington to better understand U.S. innovation and IP policy. Congressman Doug Collins (R-GA), a supporter of strong and certain IP rights, launched the event with a personal account of his exposure to IP rights growing up in rural Georgia.
He said that a number of his relatives and neighbors were chicken farmers, “some of whom invented new and more effective processes to produce and process eggs and poultry that were protected under IP law.”
Congressman Collins is a member of the House Judiciary Committee, and also is on the sub-committee for the Courts, Intellectual Property and the Internet. He was a sponsor of the recently enacted, and broadly supported Music Modernization Act, which passed the House 415-0, and has developed and supported other IP-friendly legislation. “IP is a part of the fabric of the nation,” he said. “American freedom is tied to an effective IP system.”
Other presenters included CIPU board member Marshall Phelps, former Vice President of IP Business and Strategy at Microsoft and prior to that at IBM. Mr. Phelps also served as head of Government Relations for IBM in Washington in the 1980s, and previously was head of Asia-Pacific. He spoke about the threat to technology posed by “Japan, Inc.” in the Eighties, and how the U.S. was able to surmount the threat with the right combination of incentives.
“The threat to IP and innovation from China is real,” said Phelps in his introductory remarks, “but too much policy and the wrong incentives can create bigger problems. Making patent certainty a higher priority should be the first priority. Putting IP properly on the balance sheet would help, too.”
Manny Schecter, Chief Patent Counsel of IBM, also a CIPU director, and president of the Intellectual Property Owners (IPO) Education Foundation, was a panelist, as were, Alan Marco, former USPTO Chief Economist, Rob Atkinson, a pro-IP economist and President of the Information Technology and Innovation Foundation (ITIF), and Professor Adam Mossoff, an IP scholar and policy expert at George Mason University Scalia School of Law.
Among the goals of the panel was to explore:
What is U.S. innovation policy?
How does it relate to intellectual property?
Who should be responsible for it?
How should success be measured?
One the audience members asked if the Supreme Court, with the Oil States and several other decisions, was “anti-IP.” The panel did not believe so, but that some of the members may be poorly informed about the purpose and use if IP rights.
Another audience member stated the false narratives around phrases like patent “trolls” were part of a long-term “public relations campaign” that has seeded anger and hostility toward IP rights in general. He thought a sustained educational initiative could help to make the role of IP clearer for various audiences.
The 15th Annual Patents for Financial Services Summit will gather patent and IP counsel, as well as senior financial executives, to discuss recent trends in financial patent litigation, value, and patentability.
The Summit will be held July 25-26 at the Sheraton Times Square in New York. Presentations include updates on CBMs, IPRs, Oil States vs. Greene, FinTech patents, and strategies to navigate the current IP landscape.
This year’s keynote is Hon. Susan Braden, Chief Judge, U.S. Court of Federal Claims. The United States Court of Federal Claims is a United States federal court that hears monetary claims against the U.S. government. It rules on patent and copyright claims against the government, among other areas.
IP CloseUp readers receive a $200 discount when they use registration code IPC2XX.
Financial and Tech Leaders
Heads of IP, patents or senior IP executives from leading financial institutions and technology companies will be speaking. They include MasterCard, Citigroup, The Hartford, Wells Fargo and JP Morgan Chase. Additionally, the Clearing House Payments Corporation (a consortium of leading banks) will be represented, as will IBM, by Chief Patent Counsel, Manny Schecter.
American Express, Royal Bank of Canada, Visa and Microsoft also will have representatives serving as panelists. Joe Matal, former Acting Director of the USPTO and 2017 PFFS Summit keynote, is a member of the “101: panel.”
Panels titles include:
Assess the Health of the U.S. Patent System and Discuss the Erosion of Patent Rights
Embrace Change at the PTAB
Bitcoin, Alt Coin, and Tokens: A Primer on How Intellectual Property Laws Relate
Two days before World IP Day, on April 24, the Supreme Court of the United States relinquished significant judicial authority for patents to the executive branch in Oil States Energy v. Greene’s Energy.
This decision upheld the constitutionality of the Patent Trial and Review Board. The Wall Street Journal stated in a thoughtful and uncharacteristically nuanced commentary, “This process [the inter partes review] was intended to discourage frivolous patent litigation, but is susceptible to political bias.”
Oil States overturns 200 years of judicial precedent and allows the federal government to revoke patents. Dissenting were Justice Gorsuch, President Trump’s appointee, and Chief Justice John Roberts.
” …the purpose of patents, which is to encourage innovation and reward investment, will be undermined if they can be nullified without due process and hearing before an Article III judge,” the WSJ concluded.
James Carmichael and Brad Close writing in IP Watchdog, “Despite Oil States, IPRs May Still be Unconstitutional,” reminds patent holders that the Court, by its own admission (or should that be “omission”?), ruled on a very narrow area of law and may have left the door open to further decisions that will strengthen patents.
“What was unfortunately never addressed in Oil States, and which the court specifically left the door open for, was that patents rights are still property rights for the purpose of Due Process–the inference being that IPRs may fail under the Due Process or Takings Clause. Indeed the court seemed to lament that Oil States did not challenge the retroactive application of IPRs and their constitutional sufficiency on a broader basis.”
Carmichael and Close cite the justices tone in their written decision:
We emphasize the narrowness of our holding. We address the constitutionality of inter partes review only… our decision should not be misconstrued as suggesting that patents are not property for the purpose of the Due Process Clause or the Takings Clause.
Justice Gorsuch wrote that until recently, most everyone considered an issued patent a personal right—no less than a home or farm—that the federal government could revoke only with the concurrence of independent judges.
Oil States did not go well for patent holders, but that was no surprise. What was somewhat unexpected was a strong stance from the US’ leading business periodical, the Wall Street Journal, about the shortsightedness of the Court’s decision, and that the Chief Justice and another member of SCOTUS also were not in favor of constitutionality for PTAB reviews.
Further judicial review of patents and patentability, if not the PTAB and IPRs, is order. If nothing else, Oil States puts a greater burden on USPTO Director Iancu to step-up and de-politicize PTAB administrative procedures and judges.
Despite the obvious loss, Oil States may prove to be the best reason for patent holders to dig in.
More than half of U.S. blockchain patents are owned by blockchain-specific developers, while 20% are owned by financial institutions, led by Bank of America (see pie chart below).
Number three, Fidelity, has about a third as many patents as BofA. Number two, MasterCard, some 50% fewer.
13% are owned by traditional technology businesses, led by IBM, which owns more than three times the next biggest tech holder, Dell.
This is according to the findings of a report prepared by Envision IP, an IP law firm specializing in patent research, as reported in the April Managing Intellectual Property.
According to another report, China claims to have more than twice as many companies than the U.S. in the blockchain top 100 patentees.
Outside of IBM, which supports many banks, leading technology companies like Google, Intel and Microsoft have been slow to pursue blockchain patents. MasterCard, which has 27 blockchain patents, the same number as IBM, is dubious about the reliability of crypto-currencies, such as bitcoin. This 2014 video explains some of the credit card business’ reservations. The firm’s thinking may have evolved.
MasterCard processes over $4 Trillion ($4,000,000,000,000) in more than 38 billion transactions each year, reports The Art of Not Being Governed, a bitcoin blog. On each of those 38 billion transactions, MasterCard assesses fees to the merchant, accepting the payment. These range from .11% to .80% of the total, plus various fixed amount fees for each transaction. All told, it averages out to about 2% of every transaction.