DOCSLIB.ORG

Architects of ROI in IP

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Architects of ROI in IP ARCHITECTS OF ROI IN IP Attorney Advertising Intellectual property is one of the most litigation clients and we have recovered billions underleveraged assets in investment portfolios. of dollars on their behalf. Along the way, we have Knowing how to monetize these assets can expedite repeatedly had to decide whether to invest our own and maximize your overall return on investment. capital and resources towards a client’s recovery. At Robins, Kaplan, Miller & Ciresi L.L.P. we help investors evaluate intellectual property, Figuring out how much intellectual property identify hidden value, and find ways to monetize is worth, however, is no easy task. Getting the INTELLECTUAL PROPERTY technology and innovation assets. Our guidance answer right can mean increasing an investment’s on intellectual property monetization reflects our return. Making a mistake can be both costly experience turning ideas into cash and the know- and embarrassing. To evaluate the strength MONETIZATION how we’ve earned litigating big IP cases on both and value of the intellectual property held by sides of the courtroom. investors, we developed our proprietary Strategic IP Assessment. When combined with our IP Why are we so good at this? Because we litigation experience and a full complement of have to be. As an architect in alternative fee in-house Ph.D. science advisors and financial arrangements, we have had to excel at identifying and economic consultants, this process makes us valuable intellectual property assets that can uniquely situated among law firms and other IP rapidly generate returns on our own investment. professionals to deliver an actionable, real-world We spent the last twenty years partnering with IP IP evaluation. CASE STUDIES HOW WE CAN HELP YOU BUILD Intergraph Licensing Campaign: RETURN ON YOUR INVESTMENT Our firm successfully guided Intergraph in obtaining settlements of $500 million from industry computer and processor manufacturers related to microprocessor and parallel processing patents. PRE-INVESTMENT DUE DILIGENCE: Fonar MRI Monetization: We assisted Fonar Corporation in its efforts to monetize We have decades of experience valuing intellectual property portfolios. We can apply our proprietary techniques to provide its patents related to MRI technology. After a jury verdict you a window into the range of returns possible on your potential investment. Likewise, we can identify risk by evaluating against General Electric for $110 million, Siemens, Philips, potential intellectual property liability existing within the market. Toshiba, Hitachi, Shimadzu, Health Images, and Elscint licensed Fonar’s patents. Total settlements and royalties EXTRACTING VALUE FROM YOUR EXISTING INVESTMENTS: from enforcement of the Fonar patents totalled over $200 million. We will scour the intellectual property assets within your existing portfolios and identify potential assets that can be immediately monetized through sale or license. Having achieved billions in returns over two decades of experience monetizing TVI Licensing Campaign: intellectual property portfolios, we have the blueprint to support your most complex monetization efforts. We helped TVI monetize its portfolio of patents related to disc players. We originally approached Microsoft to obtain a license, which it did a week before trial. Following Microsoft’s IDENTIFICATION OF STRATEGIC IP ACQUISITIONS: agreement to take a license, we assisted our client in a Often it becomes necessary to hedge risk for your existing or potential investments by securing defensive intellectual property monetization campaign throughout the consumer electronics plays in the marketplace. We have experience helping clients identify high-value acquisition targets designed to provide a industry. Many manufacturers of disc players have since obtained licenses to the patents. Total monetization of the strong defensive portfolio within specific markets of interest. portfolio to date exceeds $100 million. Honeywell LCD Technology Monetization: Our firm successfully worked with Honeywell to monetize its patents related to Liquid Crystal Displays. Nearly all of the relevant consumer electronics industry took licenses to the patents with revenue to date exceeding $200 million. INTELLECTUAL PROPERTY LITIGATION CASE STUDIES Eolas v. Microsoft: Honeywell Auto-Focus Monetization: In one of the largest patent verdicts at the time, we obtained Our firm represented Honeywell in a patent infringement a $520.6 million verdict on behalf of Eolas Technologies action against Minolta involving patents on autofocus Often litigation becomes necessary in order to maximize return on investment of intellectual property assets. We are and the University of California related to web-browser cameras. Following a five-month trial, the jury awarded willing and able to throw rocks—and have the finesse to do so in glass houses if necessary. Unlike many firms, we technologies against Microsoft. Honeywell $96.3 million. Minolta ultimately settled for have the experience of partnering with capital firms to maximize returns along with the reputation of success in the $127.5 million. A subsequent industry-wide licensing courtroom and within industry to drive results in litigation should it become necessary. St. Clair Litigation: campaign resulted in total settlements of over $500 million. We helped St. Clair monetize its investment portfolio of We have litigated patents from a wide range of technology disciplines, including software, semiconductors, computer digital camera patents. We successfully achieved jury AMD v. Samsung: peripherals, biotechnology, pharmaceuticals, medical products, telecommunications, and industrial machinery. Our verdicts against three manufactures of digital cameras: Our firm represented AMD in a case alleging that Samsung’s patent infringement trial lawyers include attorneys experienced in a variety of technical disciplines ranging from Sony, Canon and Fuji. Following those verdicts, we defended DRAM, SRAM & NAND memory products, system logic biophysics to electrical engineering. Many of these trial lawyers are registered to practice before the U.S. Patent our client against challenges to its ownership of the patents. products, and consumer products infringed 7 AMD patents and Trademark Office. But, first and foremost, we are trial lawyers who try patent infringement cases, argue Federal After successfully defeating those claims, we proceeded to concerning memory architecture, processor micro-architecture, Circuit appeals, structure and negotiate business resolutions of patent infringement disputes, and counsel clients on conduct a targeted licensing campaign designed to monetize MOS-transistor fabrication and design, and user interface patent matters. Partnering with us gives you a powerful tool in crafting a successful strategy to maximize your return the portfolio. Ultimately, over $240 million in licensing design for consumer products. The case settled shortly before on investment in intellectual property. revenue related to the technology was secured on behalf of trial and is reputed to be the 4th largest patent case settlement our client. and/or verdict from January 2010 – June 2011. STRATEGIC BUSINESS CONSULTATION We know your focus is building a portfolio of successful • Strategies for maximizing long-term value in nascent businesses. Maximizing the value of those investments patent portfolios; often requires early planning to ensure that assets can be leveraged when they mature. Because we have been in the • Techniques for assessing and evaluating offensive and business of turning intellectual property into capital for defensive intellectual property acquisitions; and decades, we know what it takes to ensure those assets can be monetized in the future—as well as the pitfalls that can drive • Strategies for engaging potential licensing targets. down value. We can translate what we know into a blueprint for you and your portfolio companies to follow to construct We will make our team of experienced attorneys, patent and protect value. As a strategic partner, we can provide agents, experts in science, and experts in finance available insight into: to you and your portfolio companies to develop customized, effective strategies to solidify the foundation for your • The policies and procedures each of your portfolio investment success years into the future. companies need in place today in order to protect investments in innovation tomorrow; • The steps you should take to develop defensive positions against potential adversaries asserting intellectual property portfolios against you; INTELLECTUAL PROPERTY LITIGATION INVESTMENT Are you looking to build your investment portfolio We work with our clients to help securitize their without the complications of adding to your list of intellectual property by assisting them in locating portfolio companies? We are looking to partner in funding and partners to share the risk, and potential financing monetization and litigation opportunities reward, of monetization efforts. These opportunities within our existing clients’ portfolios. provide investment firms the ability to distribute monetization risk across multiple technology portfolios Given our reputation of success in monetizing intellectual and monetization campaigns. property holdings, we often receive more contingent opportunities than we are able to fund. Martin R. Lueck Chairman of the Executive Board ARCHITECTS OF SUCCESS [email protected] The building block to a successful monetization campaign is the right team.
Load more

Recommended publications
  • International Patent Monetizationand Defensive Strategies
    The Eleventh Annual Conference on Featuring Speakers From: • ARM • Finnegan, Henderson, International Patent Farabow, Garrett & Dunner, LLP • Freshfields Bruckhaus Deringer Monetization and • George Mason University School of Law • Hoffman Eitle Defensive Strategies • Intel Corporation Tips and strategies to maximize the financial value of patent • Kudelski Group portfolios in a changing global legal environment • Morrison & Foerster LLP • Pluritas, LLC • Quinn Emanuel Urquhart & Sullivan, LLP April 11 & 12, 2016 • Reed Smith LLP San Francisco, California • Richardson Oliver Law Group LLP Live Webcast 425 Market Street Available! • StoneTurn Group LLP • Uber Credits: 10.5 CA CLE | 10 WA CLE (call about others) Quick when/where: 8:30 a.m., 425 Market Street Patent Monetization and Defensive Strategies Conference April 11 & 12, 2016 | San Francisco, California 425 Market Street Yes! Please register me: 800 Fifth Avenue, Suite 101 | Seattle, WA 98104 Name: ______________________________________________ 206.567.4490 | fax 206.567.5058 | www.lawseminars.com Email: _______________________________________________ What type of credits do you need? ______________________________ 16PATSCA WS For which state(s)? ________________________________________ Register my colleague: Name: ______________________________________________ Email: _______________________________________________ What type of credits do you need? ______________________________ For which state(s)? ________________________________________ Firm: _______________________________________________
    [Show full text]
  • THE DEFENSIVE PATENT PLAYBOOK James M
    THE DEFENSIVE PATENT PLAYBOOK James M. Rice† Billionaire entrepreneur Naveen Jain wrote that “[s]uccess doesn’t necessarily come from breakthrough innovation but from flawless execution. A great strategy alone won’t win a game or a battle; the win comes from basic blocking and tackling.”1 Companies with innovative ideas must execute patent strategies effectively to navigate the current patent landscape. But in order to develop a defensive strategy, practitioners must appreciate the development of the defensive patent playbook. Article 1, Section 8, Clause 8 of the U.S. Constitution grants Congress the power to “promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”2 Congress attempts to promote technological progress by granting patent rights to inventors. Under the utilitarian theory of patent law, patent rights create economic incentives for inventors by providing exclusivity in exchange for public disclosure of technology.3 The exclusive right to make, use, import, and sell a technology incentivizes innovation by enabling inventors to recoup the costs of development and secure profits in the market.4 Despite the conventional theory, in the 1980s and early 1990s, numerous technology companies viewed patents as unnecessary and chose not to file for patents.5 In 1990, Microsoft had seven utility patents.6 Cisco © 2015 James M. Rice. † J.D. Candidate, 2016, University of California, Berkeley, School of Law. 1. Naveen Jain, 10 Secrets of Becoming a Successful Entrepreneur, INC. (Aug. 13, 2012), http://www.inc.com/naveen-jain/10-secrets-of-becoming-a-successful- entrepreneur.html.
    [Show full text]
  • THE EMERGING Intellectual Property Marketplace & the BENEFIT for BUSINESSES and UNIVERSITIES
    THE EMERGING Intellectual Property Marketplace & THE BENEFIT FOR BUSINESSES AND UNIVERSITIES Joseph T. Miotke, Partner I. Introduction As illustrated in the table, in 1975 at the tail end of the A new global marketplace trading in a new asset class manufacturing-based economy in the U.S., intangible – intellectual property – has developed under the radar assets including IP comprised only seventeen percent of many businesses and universities, and this new global of the market capitalization of the S&P 500. Fast forward marketplace is evolving faster and faster each day. thirty years, and the above table illustrates the economic Those businesses and universities that are embracing inversion that the U.S. economy has undergone as it this new marketplace and monetizing their intellectual transformed from a manufacturing-based economy to property (“IP”) are racing miles ahead of their a knowledge-based economy. By 2005, eighty percent competitors. This paper off ers an overview of this new of the market capitalization of the S&P 500 now resided global IP monetization marketplace and then drills into in intangibles, with IP as a prominent component. It the mechanics of monetizing IP. comes as no surprise that IP would soon emerge as a new asset class with a unique marketplace off ering new The importance of IP to the United States’, as well as opportunities to generate revenue through IP. the global economy, cannot be overstated. The below table prepared by Ocean Tomo, one of the world’s As used in this paper, “IP monetization” refers to deriving forerunners in monetizing IP, illustrates the importance revenue directly through an intellectual property asset, of IP to the global economy and the rise of IP’s and in the case of patents, without relying upon the prominence over the last thirty-fi ve years.
    [Show full text]
  • Keys to Effective Patent Monetization
    Keys to Effective Patent Monetization By Scott W. Doyle and Vishesh Narayen | March 2020 | Association of Corporate Counsel Tampa Bay It is a little-known fact, even among companies with sophisticated practices surrounding their intellectual property, that nearly 90% of U.S. patents are never used to earn a dime. Under-utilization of IP, like the under-utilization of any other asset, should be of concern to any company with a robust patent portfolio. In this article, we discuss a few principles that can guide you to effective monetization of under-utilized patents. Types of Patent Monetization Vehicles There are several methods, or vehicles, for monetizing patents. One common method is through licensing, under which patent owners generally grant rights to interested parties (e.g., competitors and/or potential infringers) to manufacture, use, and/or sell the patented invention in exchange for royalties. Licenses may be exclusive or non- exclusive. Non-exclusive licenses are usually preferred since they can’t be deemed to create market impediments, don’t typically require onerous protection obligations such as indemnities and enforcement clauses, and allow the licensor to license other companies that may grow large market shares later. Such revenue recognition may also occur by collecting royalties as part of a patent pool related to a Technology Standard where risks and rewards are shared with others. However, there are several potential pitfalls that must be investigated before going the standardization route such as very low royalty rates due to patent stacking, for example, and vague and inconsistent licensing rules. When licensing fails or is not an option, a patent owner can consider litigation as a route to monetization.
    [Show full text]
  • The Giants Among Us*
    The Giants Among Us* By Robin Feldman & Tom Ewing1 Abstract The patent world is undergoing a change of seismic proportions. A small number of entities have been quietly amassing vast treasuries of patents. These are not the typical patent trolls that we have come to expect. Rather, these entities have investors such Apple, Google, Microsoft, Sony, the World Bank, and non-profit institutions. The largest and most secretive of these has accumulated a staggering 30,000-60,000 patents. Investing thousands of hours of research and using publicly available sources, we have pieced together a detailed picture of these giants and their activities. We consider first the potential positive effects, including facilitating appropriate rewards for forgotten inventors, creating a market to connect innovators with those who can manufacture their inventions, and most important, operating as a form of insurance – something akin to an Anti-Troll defense fund. We turn next to the potential harmful economic effects, including operating as a tax on current production and facilitating horizontal collusion as well as single firm anticompetitive gamesmanship that can raise a rival’s costs. Most important, we note that mass aggregation may not be an activity that society wants to encourage, given that the successful aggregator is likely to be the one that frightens the greatest number of companies in the most terrifying way. We argue that mass aggregators have created a new market for monetization of patents. It is vast, rapidly growing, and largely unregulated. We conclude with some normative recommendations, including that proper monitoring and regulation will require a shift in the definition of markets as well as a different view of corporations and their agents.
    [Show full text]
  • Patent Transfer and the Bundle of Sticks
    GW Law Faculty Publications & Other Works Faculty Scholarship 2016 Patent Transfer And The Bundle of Sticks Andrew Michaels The George Washington University Law School Follow this and additional works at: https://scholarship.law.gwu.edu/faculty_publications Part of the Law Commons Recommended Citation Michaels, Andrew C., Patent Transfer and the Bundle of Sticks (December 1, 2016). GWU Law School Public Law Research Paper No. 2016-57; GWU Legal Studies Research Paper No. 2016-57. Available at SSRN: https://ssrn.com/abstract=2883829 This Article is brought to you for free and open access by the Faculty Scholarship at Scholarly Commons. It has been accepted for inclusion in GW Law Faculty Publications & Other Works by an authorized administrator of Scholarly Commons. For more information, please contact [email protected]. Andrew C. Michaels Patent Transfer DRAFT – Dec. 2016 Patent Transfer And The Bundle of Sticks by Andrew C. Michaels* Abstract In the age of the patent troll, patents are often licensed and transferred. A transferred patent may have been subject to multiple complex license agreements. It cannot be that such a transfer wipes the patent clean of all outstanding license agreements; the licensee must keep the license. But at the same time, it cannot be that the patent transferee becomes a party to a complex and sweeping license agreement – the contract – merely by virtue of acquiring one patent. This article attempts to separate the in personam aspects of a license agreement from its effects on the underlying in rem patent rights, using Hohfeld’s framework of jural relations and the “bundle of sticks” conception of property.
    [Show full text]
  • Patent Assertion Entity Activity: an Ftc Study
    Patent Assertion Entity Activity AN FTC STUDY Federal Trade Commission October 2016 PATENT ASSERTION ENTITY ACTIVITY: AN FTC STUDY A REPORT OF THE FEDERAL TRADE COMMISSION EDITH RAMIREZ Chairwoman MAUREEN K. OHLHAUSEN Commissioner TERRELL MCSWEENY Commissioner Heather Hippsley Chief of Staff David B. Robbins Executive Director Deborah L. Feinstein Director, Bureau of Competition Jessica L. Rich Director, Bureau of Consumer Protection Ginger Zhe Jin Director, Bureau of Economics David Shonka Acting General Counsel Randolph W. Tritell Director, Office of International Affairs Jeanne Bumpus Director, Office of Congressional Relations Tara Isa Koslov Acting Director, Office of Policy Planning Justin Cole Director, Office of Public Affairs Donald S. Clark Secretary of the Commission Andrew I. Gavil Former Director, Office of Policy Planning* Martin S. Gaynor Former Director, Bureau of Economics Francine Lafontaine Former Director, Bureau of Economics Marina Lao Former Director, Office of Policy Planning Report Drafters and Contributors Suzanne Munck, Deputy Director, Office of Policy Planning & Chief Counsel for Intellectual Property Daniel S. Hosken, Deputy Assistant Director, Bureau of Economics John E. Dubiansky, Office of Policy Planning J. Elizabeth Callison, Bureau of Economics Julie A. Carlson, Bureau of Economics Jason O’Connor, Bureau of Economics Elizabeth A. Gillen, Office of Policy Planning Benjamin Chartock, Bureau of Economics Christopher Bryan, Office of Policy Planning Henry C. Su, Office of Chairwoman Edith Ramirez Inquiries
    [Show full text]
  • Promoting IP Monetization in Developing Countries
    Munich Personal RePEc Archive Promoting intellectual property monetization in developing countries : a review of issues and strategies to support knowledge-driven growth Ghafele, Roya and Gibert, Benjamin Oxfirst Ltd., University of Oxford July 2012 Online at https://mpra.ub.uni-muenchen.de/40438/ MPRA Paper No. 40438, posted 03 Aug 2012 07:33 UTC Promoting IP Monetization in Developing Countries: A Review of Issues and Strategies to Support Knowledge-driven Growth Roya Ghafele Benjamin Gibert Director Consultant OXFIRST Ltd & OXFIRST Ltd & University of Oxford University of Oxford Email: [email protected] Email: [email protected] Table of Contents Figures and Tables ........................................................................................................................... 2 Introduction ...................................................................................................................................... 3 The Intellectual Property Commercialization Divide ...................................................................... 4 The Global Distribution of Licensing Revenue ....................................................................... 4 A Narrowing IP Ownership Divide .......................................................................................... 7 A Growing IP Commercialization Divide .............................................................................. 10 The Monetization of Intellectual Property ....................................................................................
    [Show full text]
  • Patent Pools: an 'Industry Solution' to SEP Disputes in 5G and Internet Of
    Department of Law Spring Term 2020 Master Programme in Intellectual Property Law Master Thesis 30 ECTS Patent Pools: An ‘Industry Solution’ to SEP disputes in 5G and Internet of Things A quest for a successful Digital Single Market Author: Satyoki Koundinya Supervisor: Kacper Szkalej Master Thesis Satyoki Koundinya Master Programme in Intellectual Property Law ACKNOWLEDGEMENT I would like to express my gratitude to Via Licensing Corporation for allowing me to be a part of the esteemed London office, the learnings whereof have culminated into this thesis. I am fortunate to have interacted with and learnt so much from some of the top-notch IP professionals in the world, for which I will be forever indebted. I would like to use this opportunity to convey my deepest regards and gratefulness to Mr. Joseph Siino, President, Via Licensing Corp., who took out his time despite his extraordinary work schedule, to patiently hear my preliminary thoughts and give his very valuable insights and provide a starting point of my research of patent pools being an ‘industry solution’. I am extremely thankful to Ms. Helene Jay, Director, Sales & Licensing Programs, Via Licensing Corp. for giving me this opportunity of internship, facilitating an easy and comfortable transition thereinto, taking timely updates and helping me course correct at every stage. My heartfelt gratitude to her generosity and kindness. I shall forever be indebted to Mr. Sharaz Gill, Sr. Licensing Counsel, Dr. Deepal Naidu, Sr. Patent Attorney and Ms. Liz Weber, Sr. Public Relations Manager at Via Licensing Corp., my most wonderful guides and persons I have ever met, who gave me the space to improve my understanding, who patiently heard me and took my questions, despite their busy schedules and motivated me to apply the principles of law and technology into this emerging field.
    [Show full text]
  • PAEW-0042 Microsoft Corporation
    Comments of Microsoft Corporation on the Impact of Patent Assertion Entity Activities on Innovation and Competition Microsoft Corporation commends the Department of Justice and the Federal Trade Commission for having held a joint workshop in December 2012 to explore the impact of patent assertion entities (PAE) activities on innovation and competition and their implications for antitrust enforcement and policy. In response to the agencies’ request for further input on the topics covered in the workshop, Microsoft is pleased to submit the following comments. 1. Introduction: PAE Litigation In general, we agree with the assessment that former FTC Chairman Leibowitz offered in his opening remarks at the workshop: Patent issues raise a minefield of problems. Poor patent quality tips the balance between exclusivity and competition. Unclear scope and poor notice hurts innovation. But there have been improvements.1 As Chairman Leibowitz noted, there have been improvements on several fronts. The recently-enacted America Invents Act2 (AIA) contains a number of reforms designed to increase patent quality and mandated new post-issuance review mechanisms intended to provide feasible, cost-effective alternatives to testing patent validity in litigation. Efforts undertaken by the U.S. Patent and Trademark Office have already been successful in improving patent quality. And the courts have actively sought to address these problems by, inter alia, strengthening the non-obviousness requirement,3 beginning to rationalize patent damages,4 and reducing the likelihood of patent hold-up through application of the standard balancing test for injunctions.5 Notwithstanding these and other advances, suits by PAEs continue to be a serious and growing problem for industry as demonstrated by an expanding docket of PAE cases in both District Courts and the International Trade Commission.6 This increase in PAE litigation presents significant challenges and 1 http://www.ftc.gov/speeches/leibowitz/121210paeworkshop.pdf.
    [Show full text]
  • Strategic Recording of Patent Transactions at the USPTO
    DECEMBER 2020 BxWP2020-19 BORDEAUX ECONOMICS WORKING PAPERS CAHIERS D’ECONOMIE DE BORDEAUX Patent assertion entities and patent ownership transparency: strategic recording of patent transactions at the USPTO Valerio STERZI Univ. Bordeaux, CNRS, GREThA, UMR 5113, F-33600 Pessac, France GREThA UMR CNRS 5113 LAREFI Université de Bordeaux Université de Bordeaux Avenue Léon Duguit Avenue Léon Duguit 33608 Pessac – France 33608 Pessac – France Tel : +33 (0)5.56.84.25.75 Tel : +33 (0)5.56.84.25.37 http://gretha.u-bordeaux.fr/ http://larefi.u-bordeaux.fr/ BxWP2020-19 Abstract Many PAEs hide behind dozens of unknown subsidiaries or shell companies with obscure ownership. Meanwhile, the United States Patent and Trademark Office (USPTO), like many other patent offices, does not impose a strict time period for recording the change of ownership of a patent, allowing the holder to gain an advantage by controlling the timing of its ownership disclosure. In this paper we analyze recording lags in patent transactions (defined as the time lag from the execution of the patent assignment to USPTO recording) and show that PAEs strategically notify the patent office of the transaction as a function of their litigation strategies. In particular, OLS estimates suggest that for every ten days that separate the date of the start of the litigation from the execution of the patent transaction, PAEs delay the recordation of the transaction by almost four days (while the lag is about two days when the assignee is a product company). Longer recording lags are especially,associated with transactions related to patents transferred to PAEs in the ICT sector, that are litigated in the District Court in the Eastern District of Texas and that are acquired by PAEs through unknown subsidiaries.
    [Show full text]
  • Patent Assertion Entities and Antitrust: Operating Company Patent Transfers
    theantitrustsource Ⅵ www.antitrustsource.com Ⅵ A p r i l 2 0 1 3 1 The Antitrust Source, April 2013. © 2013 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. Patent Assertion Entities and Antitrust: Operating Company Patent Transfers Mark S. Popofsky and Michael D. Laufert The power of a patent can depend on its holder. In one set of hands, a patent might play a defen- sive role, warding off suits by similarly armed competitors. But when placed in another’s, the same patent can serve as a weapon for extracting royalties from inadvertent infringers or for raising rivals’ costs. In short, much like the theory of relativity, the ability and incentive to assert a patent can turn on the positions rights holders and enforcement targets occupy. The ease with which patents change hands, and the eruption of new business models focused on patent monetization, amplify the importance of understanding the consequences of this TEinsteinian patent/antitrust twist. Today, a vibrant market exists for patent rights.1 Buyers of patents frequently include “patent trolls,” which, like the Federal Trade Commission, we call Patent Assertion Entities or “PAEs.” PAEs typically do not make or sell products. Rather, their business model is to make money from monetizing patent rights, typically by licensing or suing Operating Companies (firms that practice patents). In this article, we survey certain antitrust issues presented by an emerging trend: the out- sourcing by Operating Companies of patents to PAEs, a phenomenon some commentators describe as “privateering.”2 Operating Company transfers of patents to PAE proxies can raise competitive concerns.
    [Show full text]