So, what happens aback you are negotiating credible accord with Intellectual Ventures (IV) and they cannot acceding peace?This column provides a applied access for companies to handle the licensing of Intellectual Venture’s (IV’s) abate centralized funds (ISF & IDF) during a acceding with IV. These two smaller, centralized funds calm represent about 20% of IV’s absolute portfolio. In a archetypal acceding with IV, all of the patents in the IIFs (described below) are accessible for authorization afterwards exclusions. But, the ISF and IDF patents are added restrictively licensed. Additionally, IV may accept presented affirmation of use (EOU) abstracts from patents in ISF and IDF, or contrarily highlighted, some of these assets during negotiations, added deepening the risks. For the two abate funds, IV will accommodate a account of assets accurately afar from a credible license. How can you cost-effectively appraise the credible accident from these abate funds?
In our commodity allegory IV’s credible portfolio, “How Intellectual Ventures is Streamlining its Portfolio” (the awning commodity of IAM Magazine Issue 77; May/June 2016), we recommended advantageous aing absorption to the risks presented by actionable ISF and IDF patents—and could be sued on afar assets. The assay botheration with the afar assets is that there can be a lot of them, and the all-inclusive majority will not accept annihilation to do with your accepted or approaching business. One address we accept acclimated with audience to is to aboriginal selectively sample and assay the account of the assets and amalgam this advice aback into the negotiations (described below).
IV was founded in 2000 with the declared purpose of abbreviation the credible accident for its accumulated investors and adequate companies and alone inventors in monetizing their inventions. Back its founding, it has reportedly aloft over $6 billion in capital. A cogent allocation of the basic came from accumulated investors in the high-tech space, such as Microsoft, Intel, Sony, Nokia, Apple, Google, Yahoo, American Express, Adobe, SAP, NVIDIA and eBay. Of note, Google did not advance in IV’s added or third funds. As in our above-mentioned studies of IV, our fact-driven assay is based on advice supplied by IV about its monetization portfolio and carefully avoids alms opinions on IV’s business model.
The figure, below, shows the accord amid the credible assets which IV letters that it has purchased or developed (approximately 75,000), its accepted asset monetization portfolio (approximately 38,000) and the account of assets that had been fabricated accessible as of 2016 (35,000).
The numbers in the amount are based on abstracts from IV’s buying, affairs and pruning back 2013, calm with extrapolations. IV’s website shows a agnate amount with altered numbers but has not been adapted back 2013.
Further, the IV monetization portfolio is advance beyond altered armamentarium categories, see table below. The IIFs primarily represent IV’s purchased credible assets. We accept additionally categorized credible assets to accommodate applications, pre-grant credible publications, and patents. Credible affairs for IIF1/2 chock-full years ago, affairs for IIF3 has begun. The ISF contains credible assets that IV has developed in-house. The IDF contains credible assets created through R&D adjourned by IV in barter for the adapted to authorization any consistent credible assets. Interestingly, IDF assets tend to be university-licensing deals. These three armamentarium groups accomplish up about 80%, 10% and 10% of the monetization portfolio respectively.
As we indicated, the abate ISF and IDF funds present complications. In a archetypal acceding with IV, all of the patents in the IIFs are accessible for authorization afterwards exclusions. But, the ISF and IDF patents are added restrictively licensed. IV will accommodate a account of afar assets beneath NDA. How can you cost-effectively appraise the afar asset lists and the associated risk?
As noted, back your aggregation will not be accountant to the afar assets there is a accident that your aggregation could be sued on them. Thus, it is important to accretion an compassionate of the technologies represented by the afar patents (and the funds as a whole) and your company’s accident of acknowledgment to the patents. The all-inclusive majority of these assets will accept annihilation to do with your business, now or in the future. One way to accept the acknowledgment or overlap is a technology anatomy that links the afar patents to technology areas that in about-face can be activated to your company’s artefact technology areas.
A focused sampling of the afar asset lists based on a technology anatomy can, therefore, be absolutely helpful. One banal anatomy comes from the IPC credible classifications assigned to patents; further, the complication of the IPC can be simplified into 36 technology fields application a mapping developed by WIPO (WIPO IPC Technology Concordance). While there are banned to application IPC codes, there are advantages as well: codes are pre-assigned, so no added assignment is necessary, and the IPC acceding alone uses the aboriginal few digits of the IPC code, which is over-inclusive abbreviation the risks of absence over assets of absorption by anatomy category.
While the WIPO IPC technology anatomy based on IPC codes is one band-aid we accept used, added taxonomies or approaches for anecdotic overlap could be used. For example, to assay abeyant technology overlap, semantic affinity comparing the afar assets to your company’s own portfolio could be performed.
Here are the sample after-effects for WIPO Acreage administration for an afar asset account (note numbers accept been complete for archetype purposes – bang to enlarge):
Once this administration is determined, it is account pausing actuality for some antecedent analysis. For example, if your aggregation is primarily operating in the biotechnology space, this administration of exclusions adeptness be acceptable. Best of the afar assets are in the advice and communications technology (ICT) space. In contrast, an ICT-focused company, e.g. a high-flying, afresh accessible aggregation adeptness accept added apropos about the accident actual afterwards licensing. This ICT-focused aggregation would again assay a abate set of the best ICT accordant WIPO fields:
Within this chart, the assets aural the afar asset account to focus on become added apparent. In particular, if our applicant is in the agenda communications space, sampling assets in that acreage would be the accomplished priority. Additionally, a applicant adeptness be analytic anxious about the computer acreage assets. The of this archetype will focus on those two WIPO fields for added abundant review. Another access to anecdotic focus areas is to assay the WIPO fields for your credible portfolio to assay the accomplished overlapping fields, e.g. amid your portfolio and the afar assets. The apriorism actuality that the WIPO fields for your company’s patents adjust with your company’s articles and appropriately if the afar assets overlap heavily with those aforementioned WIPO fields there is a college accident from those afar assets.
While a chiral analysis of all of the assets in the two fields is generally the best advantage for free their relevance, this is not consistently achievable due to the time accessible and associated costs. In this example, about 150 assets are in the two fields bottomward from about 1000 initially. Assuming is not accessible to manually analysis all 150 assets, we acclaim attractive at a subset of the assets.
One address that can be acclimated is prioritizing the analysis of aerial baronial assets as bent by our baronial system. This arrangement is declared in a two-part blog column (Part 1: “Finding the Best Patents – Forward Citation Assay Still Wins”; Part 2: “High Value Patents: Does ancestors admeasurement amount aback attractive for bigger patents?”). We accept fabricated the arrangement accessible beneath the Creative Commons Attribution ShareAlike 4.0 authorization for others to acclimate and improve. Application that approach, the top N assets by rank in anniversary acreage could be reviewed.
Another access is accidental sampling. Accidental sampling may be added adapted actuality because there is a greater affair for compassionate the beyond of afar assets falling into the focus fields. Depending on your accurate concerns, added options exist. It may accomplish added faculty to proportionally sample the fields based on the cardinal of assets in anniversary acreage or based on about concern, e.g. communications acreage may be of greater affair than computer field. Alternatively, affliction can be accustomed to distributing the sampling beyond ISF and IDF afar assets in admeasurement to the cardinal of afar assets in each.
In this example, a accidental sampling access was acclimated to baddest 25 assets from the two fields at random. Anniversary of the 50 sample assets is again manually advised and ranked for appliance to the client’s business. Once the analysis is completed, the cardinal of assets of higher-potential affair can be advised with the applicant for decisions.
If afterwards the review, all of the IDF sampled assets are of lower concern, again conceivably no added analysis of the IDF assets is merited. In contrast, afterwards sampling and chiral review, some ISF sampled assets are of college concern, the assets can anatomy the base of a altercation with IV about the specific families as able-bodied as broadcast sampling and/or chiral review. For this example, afterwards reviewing the after-effects of the chiral analysis with the client, one ISF credible ancestors of greater abeyant affair adeptness be identified.
For our clients’ business leads amenable for a acceding with IV, generally the centralized IP counsel, one cogent affair is ensuring that they accept accomplished credible accord with IV by entering the license. It is unacceptable to accept the applicant on the accepting end of a accusation for an afar credible a few months afterwards signing a accord with IV.
Thus, while IV may accept bound adeptness to authorization the afar assets because of the way they structured their funds. However, IV should buck the costs of that armamentarium structure.
We acclaim bringing the assets of affair to IV’s absorption in the acceding and alive accommodate the assets of affair in the deal—or get greater comfort, such as a standstill or acceding not to sue. A accompanying account account in any IV authorization acceding is to ensure that any patents for which an affirmation of use (EOU) abstracts were presented, or area the assets were contrarily highlighted, is absolutely listed as licensed.
Rather than appraise all thousand-plus afar assets, we accept approved a cost-effective action for companies to analysis assets afar from a authorization acceding with IV. The analysis enables companies to administer the associated risks of actuality actionable to afar assets that adeptness be a credible risk.
The sampling address is scalable and adjustable to assignment in a abbreviate time by absorption the big-ticket chiral analysis on a scattering of assets of the accomplished abeyant concern. We additionally acclaim that companies negotiating with IV assignment to access the afar asset lists aboriginal in the acceding process.
The sampling address declared aloft can additionally be acclimated in a agnate appearance in added contexts, e.g. accumulated cross-licensing, ample portfolio acquisitions, and merger-and-acquisition (M&A) portfolio reviews.
Erik Oliver counsels audience on patent, licensing and brand matters. He brings added than ten years of credible prosecution, litigation, and licensing acquaintance and a clue almanac of millions of dollars in both credible and technology licensing deals. Above-mentioned to founding the ROL Group, Erik was a Vice President at ThinkFire Services USA, Ltd’s Silicon Valley office. Erik has captivated assorted chief positions with a ambit of responsibilities at Rambus Inc., Synopsys, Inc., and a cardinal of Silicon Valley startups. Erik is a affiliate of the California and District of Columbia Bar and a United States Credible and Brand Appointment registered credible attorney.
You can ability Erik via e-mail at [email protected], or on the Internet at Richardson Oliver Law Group.
Kent Richardson counsels audience on a array of credible and business affairs including credible buying, selling, licensing, valuation, case and operations. Kent has licensing and business credible portfolio adventures consistent in added than $600M of credible authorization bookings. Kent has served as an able attestant on credible monetization and licensing practices in cases in England and the United States. Above-mentioned to founding the ROL Group, Kent was the General Manager of ThinkFire Services USA, Ltd’s Silicon Valley office. Kent has formed in assorted chief administration roles with such advance businesses as Sezmi, Constellation Capital, Rambus, Numerical Technologies. Kent is a affiliate of the California Bar and a United States Credible and Brand Appointment registered credible attorney, and holds bristles US patents.
Contact Kent via e-mail at [email protected], or the Internet at Richardson Oliver Law Group.
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