• Tracking the Sale of Patent Portfolios

    Finding out about patent sales and prices is notoriously difficult, yet critically important for patent valuation. Brian Love (Santa Clara Law), Kent Richardson, Erik Oliver, and Michael Costa (Richardson Oliver Law Group) have helped us all out by posting An Empirical Look at the “Brokered” Patent Market to SSRN. Here is the abstract:

    We study five years of data on patents listed and sold in the quasi-public “brokered” market. Our data covers almost 39,000 assets, an estimated 80 percent of all patents and applications offered for sale by patent brokers between 2012 and 2016. We provide statistics on the size and composition of the brokered market, including the types of buyers and sellers who participate in the market, the types of patents listed and sold on the market, and how market conditions have changed over time. We conclude with an analysis of what our data can tell us about how to accurately value technology, the costs and benefits of patent monetization, and the brokered market’s ability to measure the impact of changes to patent law.

    The article provides some really useful data about brokered patent portfolios – that is, groups of patents sold by brokers rather than “secretly.” While brokered transactions are also confidential, their public offering makes them more visible than company to company direct transactions.

    The information is quite interesting: the number of patents in each portfolio is quite small – most are less than a dozen. The offering prices have dropped over the last five years (shocker). Operating companies sell a lot of these, and PAE’s buy them (something I pointed out five years ago in Patent Troll Myths, and which gave rise to the LOT Network framework- in fact, Open Innovation Network is a now a key buyer). There is a lot more data here, and I don’t want to preempt the paper by just repeating it all – it’s worth a look. I will note that, as the authors point out, this isn’t the whole market and they can’t accurately capture sale prices, so they use a “spot check” to estimate what they expect them to be.

    Having introduced the paper, I do want to ask, like every good academic, “But what about my article?” Here I’ll note a couple takeaways from the paper that bear on my own work on this subject, Patent Portfolios as Securities. First, the first portion of that paper was dedicated to the notion that buying and selling portfolios isn’t just about patent trolls. I told anecdotes and used some data, so I’m glad to see a broader based survey provide stronger support for that assertion. Second, my argument was that treating portfolios as securities would force more transparency in sales and valuations. This paper’s results support this notion in two ways. Itt shows how difficult it is to get any kind of transparency, even when you have brokered transactions. It also shows how easy it would be to jump from a brokered transaction to a more transparent clearinghouse that might provide the type of valuation information that market participants crave. I view this paper as a useful followon to my own, and hope to write more about how it might bear on the treatment of patent portfolios as assets.

    Anyone interested in real-world patent market transactions should give this paper a read. It provides a view into the system that we don’t often see. I found it really useful.

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  • President Trump to meet Xi Jinping in Beijing during Asia tour

    In mid-August, the Trump Administration announced that it would probe the alleged theft of U.S. intellectual property as aided by the Chinese federal government. One could assume that this probe might be a topic of conversation. During this conversation President Trump should ask President Xi to explain how a Communist regime is capable of having a better understanding of the importance of protecting patent rights than a nation ostensibly built on private property rights; a nation that has…

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  • PTAB Life Sciences Report

    By John Cravero — About the PTAB Life Sciences Report: Each month we will report on developments at the PTAB involving life sciences patents. Pfizer Inc. v. Biogen, Inc and Genentech, Inc. PTAB Petition: IPR2017-02126; filed October 6, 2017. Patent at…

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  • South Africa’s ASA launches funding model

    Resurfacing from business rescue just over a year ago and a series of AGM’s in April this year, the ASA has continued to make steady progress back to recovery. Yesterday it launched its  voluntary 0.1% funding model from advertisers.

    It works like this. Marketers will be able to opt in to pay .1% of levy on all advertising. So, if an Ad costs R10 000 then R10 will be destined for ASA funding, collected by media buying agencies. If the ASA is over funded then the levy is adjusted downwards. 
    R15bn of advertising is placed through media buying agencies annually. If there is a 50% opt in to the system that will work out to  approximately R7,5 million per annum for the ASA, enough to cover operational costs.
    According to the Business Rescue report the ASA required an initial amount of R5 million to cover its historical debt and a further R3 million to keep it going in the short term. Roughly two thirds of this has been achieved through pledges and up front competitor complaint payments by 40 companies, including one law firm, ENS Africa. You can view the list here.
    Internationally, this model is not dissimilar to one the one used in the United Kingdom whereby a .1%  voluntary levy is charged on the cost of advertising space and .2% on some direct mail collected by independent third parties. They also charge for seminars and premium industry advice services.
    Over the past month the ASA has made 20 Rulings which are published on its website here. It has also announced that it is moving to a new address in Parktown North (no 5, 7th Avenue). 

    Prior to that structural and lobbying changes and commitments have been well documented on this blog here (Herbex decision), here (Business Rescue recommendations and AGMs), here (Schimmel appointment and interview), here and here (funding updates).

    The steady progress of the ASA in achieving its goals is commendable. It will be interesting to see if relatively high competitor complaint fees introduced a few years ago will be reduced if the .1% funding model achieves traction. With Herbex out the way, the ASA can now also focus on a potential large damages claim which was set down for 18 March 2018, according to the Business Rescue report. It will also be interesting to see how the National Consumer Council will respond to this resurgence and the ASA’s withdrawal of their wish to become an ombudsman. 
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  • Chemical Company Joins the LOT Network Against Trolls

    Covestro, a chemical company which uses digital technologies to build better products, has joined the LOT Network.  As previously discussed, the LOT Network was started to thwart patent trolls.  Essentially, each member agrees to provide a license to the other members of the network if their patent is transferred to a patent troll.  Covestro’s press release states:

    “With the convergence of the chemical industry and digital technologies, our sector has increased exposure to PAE litigation,” said Gilbert Voortmans, Vice President, Head of Intellectual Property Rights at Covestro. “Innovation is core to our business, and we feel it’s important to take a stance against anything that could interfere with the fair use of intellectual property.”

    Interestingly, this is the first chemical company to join the LOT Network, according to the press release.  We’ll have to see whether other companies in industries generally thought not to be subject to troll suits will join the network, particularly as digital technologies influence almost all industries.  Moreover, I count around 170 members listed on the LOT Network website, including companies ranging from Alibaba to Crate and Barrel to Wells Fargo to Uber to Target to Honda. I wonder if universities should create something like the LOT Network to protect themselves from future suits by university based patents.  

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  • Broadcom Announces Bid Valued at $130 Billion to Buy American Semiconductor Giant Qualcomm

    On Monday, November 6th, Singapore-based semiconductor designer Broadcom (NASDAQ:AVGO) announced that it had offered a proposal to acquire San Diego, CA-based semiconductor rival Qualcomm (NASDAQ:QCOM). The deal values Qualcomm at about $130 billion and Broadcom would pay $70 per share; stockholders would receive $60 in cash and $10 in Broadcom shares in the deal. That $70 per share price was higher than Qualcomm’s per share price on November 6th, when it popped above $65 per share early in the…

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  • PTAB Request Amicus Support for its Decision on Immunity

    In what appears to be a first, the Patent Trial & Appeal Board (PTAB) has requested briefing from Amacus Curie on the question of whether Tribal Ownership of a patent immunizes the patent from Inter Partes Review (IPR) challenge. The case is Mylan v. Saint Regis Mohawk Tribe, IPR2016-01127 et al. The panel writes: [W]e authorize briefing from any other […]

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