Eric Spangenberg - Have We Hit Bottom in the Patent Market?

In the IP Watchdog article: Have We Hit Bottom in the Patent Market? Mr. Eric Spangenberg gives his frank assessment of what has adversely impacted the US patent market:

"Big tech used small companies hit with abusive lawsuits as the 'poster boy' to push through changes that do far more to help big companies efficiently infringe 'little guys' intellectual property than they do to prevent abuse. The market is still struggling to adapt to the rule changes that were pushed through in the AIA."

I would add companies have not been transparent on the funding of academic papers, studies, and articles in the press. Often the studies have lots of numbers, surveys, and statistics. The authors should disclose if they are compensated. Otherwise, these publications get presented to Congress right before hearings as objective evidence from disinterested observers of a problem that requires further patent reform.

Copyright © 2015 Robert Moll. All rights reserved.

Kodak Patent Auction - Low Bids and No Bidding War

Tonight, the Wall Street Journal article Kodak Patent Bidding Is Tame tells us Kodak's patent auction has not generated the bids Kodak expected. Instead, all initial bids are low, no apparent bidding war is ongoing like occurred over the Nortel patents, the bids are for a subset of the 1,100 Kodak patents and well below $500 million.

Note if you enter the article through Google news you get the full article, but the WSJ only gives you a snippet of the article apparently to encourage us to become paid subscribers.

Copyright © 2012 Robert Moll. All rights reserved.

Tech Company's New Favorite - The Patent Troll

The Wall Street Journal's article Corporate America to Patent Trolls: 'Well, Two Can Play at This Game' is worth reading. Ashby Jones of the WSJ notes how the divide between tech companies and non-practicing entities (i.e., patent trolls) is disappearing. Yes, the tech industry still complains about patent trolls while it spins out companies to license and sue on its patents and sells patents to trolls to generate cash. The article had no comments from tech companies on this trend. I guess the patent troll designation has a case of situational ethics.

Copyright © 2012 Robert Moll. All rights reserved.

AOL Decides Stock Repurchase Not Dividend is Way to Handle $1 Billion Patent Proceeds

On June 17, I posted an article here that AOL had expressed a commitment to return 100% of the proceeds from its $1 billion patent sale to its shareholders. Initially, I thought that's a real gain for shareholders whose stock has dropped about 20% in the last five years. Later I read the dividend may have been prompted to appease the hedge fund Starboard Value that pushed for the patent sale.

Ten days after AOL reelected eight directors it announced a stock repurchase not a dividend is the best way to handle the patent proceeds. CEO Tim Armstrong's timing seems to have outfoxed Starboard Value which pushed for a board seat and the dividend. Some speculate Starboard Value will sell its AOL shares (about 5% of that outstanding) now that AOL has decided to not distribute the dividend.

If you are interested in the details, I recommend reading All Things D Kara Swishers article: AOL Will Start Paying Out Its Pile-O'-Patent-Cash to Shareholders This Week Via Stock Buyback.

Copyright © 2012 Robert Moll. All rights reserved.

Intel Buying InterDigital's Wireless Patents for $375 Million

Intel plans to spend $375 million to buy InterDigital's wireless patent portfolio of about 1700 wireless patents and applications. Professor Crouch notes below that InterDigital's stock price immediately jumped 28% on news of the purchase. The $260 million increase in InterDigital's valuation shows before the sale the patents were only valued at $115 million suggesting valuation of US patents in the mobile computing space can be an imprecise science. Here are several articles with details:

Selling Patents - Patently-O

Interdigital sells tech wireless-technology patents, applications to Intel - Philadelphia Inquirer

Intel to buy InterDigital patents for $375 million - Reuters

Intel Buys Wireless Patents From Interdigital for $375 Million - PC World

InterDigital sells wireless patents to Intel for $375 m- ZDNet (blog)

Intel spends $375 million on cache of InterDigital patents- San Mercury News

Copyright © 2012 Robert Moll. All rights reserved.

Nokia's Patent Monetization Efforts - Prepared to Sell Patents

On June 14, Nokia's CFO stated Nokia is prepared to sell part of its patents to raise cash. It is unclear how many patents would be sold, but Nokia has about 30,000 patents and produces about 1,000 patentable inventions per year. This year's first quarter report states Nokia made about EUR500 million the previous year on intellectual property rights. This patent sale is part of the larger patent monetizing effort at Nokia, which successfully settled patent disputes with Apple last year and sued HTC and RIM for infringement of a number of its patents last month. This is yet another case of a patent rich company leveraging its patent portfolio to get much needed cash to catch up in the dynamic mobile computing space.

For details see Nokia prepared to sell patents if price right: CFO - Wall Street Journal Market Watch

Copyright © 2012 Robert Moll. All rights reserved.

Kodak Seeks Confidential Auction for Over 1,100 Patents

On June 11, Kodak's attorneys filed a motion to authorize the sale of the patents in a confidential auction to ensure bidder confidentiality. The following articles have the details:

Kodak Concedes Difficulty in Drawing Lead Bidder for Patents - NY Times

Kodak Seeks Court Approval for Confidential Patent Auction Plan - PC World

Kodak Says 20 Patent Bidders Sign Non-Disclosure Agreements - Bloomberg

Kodak files motion to auction digital imaging patents - BBC

Copyright © 2012 Robert Moll. All rights reserved.

Leveling the Patent Playing Field, by Peter Detkin

I re-read Peter Detkin's article Leveling the Patent Playing Field tonight. It explains how the US patent system doesn't treat small entities fairly when it comes time to monetize patents and why patent aggregators have an important role in this regard.

Let me highlight some points made in Mr. Detkin's article:

1. Many important inventions have come from small companies, universities, and individual inventors rather than large companies. In fact, small entities such as individuals, business with less than 500 employees, and non-profits filed 43% of the US patent applications in the 1990s.

2.  Even worthy inventions by small entities may be difficult to monetize. Beside the expense of getting a US patent, small entities face difficulties in  finding a manufacturer and/or investors. Further, they face difficulties in licensing inventions even when they offer major advantages. For example, Dr. James Cunningham, a chemical engineer and an electrical engineer, had 46 patents as an employee of six semiconductor companies including Texas Instruments (TI). Some of Dr. Cunningham's inventions allowed microprocessor companies to switch from aluminum circuitry to copper which greatly improved performance of the microprocessors. He had fundamental inventions and decades in the fields yet he did not know who to approach about licensing the inventions.

3. Corporate licensing professionals are trained to avoid paying "crackpot" inventors or trolls. Their job is to limit payment to such "crackpots" not pay them! So they play interminable rounds of phone tag for months and reschedule the meeting at the last minute. Then after a few months pass they discuss and argue whether the invention has any merit for 6-18 months more even if they are currently infringing the patents!

4. Licensing negotiation rarely lead anywhere, leaving litigation as the only viable option. Large companies can out-resource even a veteran such as Dr. Cunningham at all stages so after a long dragged out process the big company ultimately says no we don't want to license your patent. And such was the case for five of the seven major companies Dr. Cunningham sought to license. With this result is it a wonder that some choose to sue for patent infringement? No, but little guys rarely win these cases.

5. Small entities cannot participate in the successful vast patent portfolio licensing of an IBM and the well capitalized patent licensing of Qualcomm, Rambus, or TI or the corporate patent pools in support of industry standard technology such as MPEG or DVDs. Unlike most small entities, major tech companies typically have huge numbers of patents, lots of money and lawyers to enforce them, as well thought out licensing programs.

Mr. Detkin notes models of patent monetization that will help the patent system regain balance. He suggests consultants, e.g., Thinkfire and ipValue will help large companies evaluate and exploit their patents. Ocean Tomo can run patent auctions, develop a stock index to track patent strength in companies, and create a centralized IP exchange. Companies like Acacia Research and Mosaid can purchase and assert the patents individually rather than as a broad portfolio. And his own firm Intellectual Ventures can purchase small entity patents such as those from Dr. Cunningham as well as seek patents on its own inventions resulting in portfolios that permit rational licensing for multiple technology products. Mr. Detkin notes Intellectual Ventures presents pre-screened patents and expertise in licensing and patent defense that allow it to reach an efficient agreement like that of a veteran real estate broker who negotiates with individual condo and apartment owners standing in the way of a skyscraper to be built.

Mr. Detkin states the above business models can match patent owners with patent users, ensure fair and efficient compensation for inventions, improve the public's access to new products and services, ensure bad patents do not receive unreasonable compensation, and restore balance to the patent playing field so more can play the patent game enriching our society.

In the end a great article, but Intellectual Ventures' daily actions will determine if they achieve these goals.

Copyright © 2012 Robert Moll. All rights reserved.

Kodak's Stalled Effort to Sell Digital Patents

On June 8, the Wall Street Journal ran an article about Kodak's stalled effort to sell its digital patents, which may complicate Kodak's ability to emerge from bankruptcy. Kodak says "an independent review" values the patents at up to $2.6 billion and hopes to use money from patent sale to compete against HP in the market for printers. Competing with HP in the market for printers? Don't forget Canon, Brother, and all the others. Even if Kodak gets $2.6 billion this sounds like a difficult journey.

See the WSJ article Kodak's Patent Allure Fades for further details.

Copyright © 2012 Robert Moll. All rights reserved.