IP Market Updates - April 10, 2017

Like any market rebound, the IP market uptick will happen in fits and starts and it will take several months before we will really see any sustained trend. A few days ago, we were reminded of how fickle this market can be when, just weeks after IAM magazine reported that Intellectual Ventures (IV) had been one of the most active patent buyers in the last quarter of 2016, we learned from IV that they are officially exiting the patent acquisition market altogether. They will focus on monetizing their own assets, including selling large chunks of their portfolio, as they have already started doing, to more aggressive NPEs like Dominion Harbor and Equitable IP. 

I was one of the few that IAM contacted to analyze this latest development and I indicated that I was not too surprised by this announcement, given that IV bought most of its assets when valuations were higher than present and the legal environment was much more favorable in the US than it is now. IV’s portfolio is primarily US based, which constitutes a double whammy these days. Their latest fund (#3) was trying to diversify their new purchases in Europe and Asia, but it was too little, too late and its investors seem to have lost faith in the aggregator business as a whole. On the other hand, given the recent caselaw supporting enhanced damages and the disappearance of the traditional doctrine of laches for patent infringers (as discussed in our previous newsletter), we predict that this move could actually accelerate a rebound. Indeed, the acquirers of IV’s patents are bringing those before the courts much faster, their cost of acquisition is significantly lower and their business model leaves them in better position to return a profit to their investors, which in turn makes financing their campaign easier.  It will be interesting to follow if they can score some of the big wins that have eluded IV.

Talking about NPEs, we saw a few of the large ones like Marathon, Finjan and Acacia Research all report some positive news and better financial performance. The PIPCOs (publicly traded NPEs) as we call them are probably the best barometer as to how the market is doing and this bodes well for patent owners. 

Meanwhile, after years of buying into the large tech companies’ narrative that patents are bad (when used against them at least!), the US Congress, seems to have rediscovered the small inventor. In a rare bipartisan effort, senators from both sides of the aisle have revived their push to get the U.S. Patent and Trademark Office and the Small Business Administration to better educate small business owners on how to protect and patent their inventions. However, another bill introduced by both the Senate and House on Tuesday would slash patent protections for exterior vehicle replacement parts from 20 years to 2.5 years in an effort that proponents say will promote competition and fight alleged automaker monopolies that drive-up vehicle repair costs. This would bring a major exception to the patent protection as it was originally intended and could open the floodgates to arguments from other industries (who just said software?) to claim their own version of a shorter shelf life for patents. 

Lastly, because the world of patent monetization is often very opaque, many firms have traditionally offered their services directly to individual inventors, promising them riches and fame. One of these, Worldwide Patent Marketing, has been the subject of numerous complaints from individuals and small companies alike. These individuals and small companies trusted Worldwide Patent Marketing to deliver sound monetization services and sadly ended up with nothing but the loss of tens of thousands of dollars in fees. Well, the FTC had enough of it and took them to court, accusing them of committing unfair and deceptive trade practices in violation of Section 5(a) of the FTC Act. On March 8, the Southern District of Florida found that the FTC was likely to succeed in proving this charge and issued a temporary restraining order. For all those proponents of deregulation and the “deconstruction” of the US government as we know it, it is refreshing to see an agency doing its job and protecting its constituents, just as it was intended to do.

Other relevant news below. 

Happy reading!

Facebook virtual reality unit Oculus faces lawsuit over imaging patent 

Reuters 

Facebook virtual reality unit Oculus faces lawsuit over imaging patent ... Techno View said it may add claims relating to other patents owned ... (more…)   

US Undermining Patents, Innovation – Meanwhile, China Gains Ground 

CNSNews.com 

The President and his team are no doubt also aware of China's moves to supplant the U.S. as the leader of innovation and even patent protection. (more…)   

Samsung to pay Huawei $11M for patent violations, court rules 

CNET 

A Chinese court has ordered the South Korean giant to pay Huawei 80 million yuan (around $11.6 million) for patent violations, reports ZDNet. (more…)

UK Court Issues New Guidance for Tech Patents 

Inc.com 

Britain's High Court ruled that it has authority to decide what sort of royalties mobile phone makers should pay to use the patented technology required ... (more…)

NAFTA patent ruling a big victory for Canadian innovation 

The Globe and Mail 

The case Eli Lilly lost revolved around an arcane part of patent law. Essentially, Eli Lilly wanted a patent even if its product did nothing useful: merely ... (more…)   

Cisco and Slack Are Joining Google's Patent Network 

Fortune 

A mutual defense alliance to protect companies against so-called "patent trolls," known as the LOT Network, announced the addition of four more ... (more…)   

Dyson drops solid-state battery patents 

Autoblog (blog) 

Why would Dyson abandon such promising patents, which had the potential to ... who worked on the patents, tells Quartz that that fee rises every year. (more…)   

Tech Companies Are Using Patent Strategies the Supreme Court Shot Down 100 Years Ago 

Slate Magazine 

170330_FUTURE_Edison Thomas Edison held the patent to the “Kinetograph,” a motion picture camera, and for a time used that patent to control ... (more…)   

GTL Acquires Corrections Patents From Verizon 

Yahoo Finance 

t is fitting that these patents have come home to GTL, reuniting aspects of the Verizon portfolio with GTL and some of the inventors who helped create ... (more…)   

Google announces 'Pax' for cross-licensing of Android patents 

The Indian Express 

Google has announced Pax, a new licensing agreement group for patents across Android devices, in hopes of reducing infringement claims and ... (more…)   

A Changing Patent Landscape: US no longer the most patent friendly jurisdiction in the world 

IPWatchdog.com 

The omnipresent threats of more patent reform, a Supreme Court that has created unprecedented uncertainty surrounding what is patent eligible (more…)   

Senators reintroduce legislation to help small businesses access patent protections 

UpperMichigansSource.com 

Obtaining a patent from the U.S. Patent and Trademark Office (USPTO) protects against infringement in the U.S. However, if a small business does not ... (more…)   

What Originalist Viewpoints May Mean for Patent Law 

The Legal Intelligencer 

The landscape for patent law has changed more quickly over the last five years than it had in preceding decades. The America Invents Act, which was ... (more…)