And Now What? (Part 2)

Hello all,

A belated happy Thanksgiving and holidays wishes to all our readers in the US and a warm welcome to people across all continents entering the mad rush to close deals, buy presents, plan vacations, etc., often all at once and in December alone.

A few weeks ago, I wrote a rather sobering outlook at Kathi Vidal’s tenure as the USPTO Director over the last 3 ½ years. I might as well have written her professional obituary since she resigned a few days later (effective this week) and made sure mine would not be the last word about her work, by self-publishing a list of her main accomplishments, in case nobody else would I suppose…

So, I now turn to what’s next and what we can expect for the next 4 years under a second Trump administration. Read below after a few important updates on recent legislative progress on the Hill and other relevant news for the IP community.

As usual, as I focus on the macro picture in this newsletter, I want to remind everyone that we track everything that is going on in this world and for those who need their regular dose of news, once again you can follow me on either LinkedIn or Twitter where I post almost daily about some of the most newsworthy events. 

This will be our last newsletter in 2024. Early next year, I will write a year in review and make my usual predictions for 2025. In the meantime, Happy Holidays everyone!

Happy reading!

 Louis

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Tangible IP News

In our last issue, we reported the closing of a substantial transaction involving a portfolio of high frequency trading patents. We have several other deals in closing that will likely be announced in January. Stay tuned.

As you read this, I have just been interviewed by Bruce Berman who chairs the Center for Intellectual Property Understanding (CIPU) on current trends in patent monetization and other current topics relevant to the IP community. I will post the link when the interview is available for those who miss listening to my French-Canadian accent…

We are pleased to report that both yours truly and our Sr. V.P. Brokerage Erika Warner have been named this year again among the World’s Global IP Leaders. Hurrah to our small but mighty team! See the full announcement here.

We have several portfolios for sale that offer great opportunities to savvy buyers. All of our patents for sale are listed here. Similarly, if you’d like to be added on our distribution list in the future so that you are the first to receive new opportunities, please email us at info@tangibleip.biz.

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Recent News:

Will The PREVAIL ACT Finally… Prevail?

The PREVAIL bill, championed by Senator Chris Coons, passed the Senate Judiciary Committee with a razor thin 11-10 vote last week. The legislation aims to reform the Patent Trial and Appeal Board (PTAB) by raising the standard for invalidating patents. Currently, PTAB can invalidate patents based on a relatively low “preponderance” standard, which allows administrative judges to easily overturn patent examiner decisions.

The bill would require “clear and convincing evidence” to invalidate patent claims, mirroring federal court standards. The legislation is particularly focused on curbing what supporters see as abusive patent challenges by big tech companies. Data shows that 18 of the top 20 PTAB challengers are from tech giants like Apple, Google, Microsoft, Intel, and Cisco, who are accused of using the system to undermine smaller innovative entities by forcing costly legal battles. The Bill will now move to a full committee vote and has garnered some momentum as a result of the bipartisan conduct of the IP subcommittee (Sen Coons (D) and Tillis (R) will likely trade places in January as chair and ranking member) and the fact that both parties seem willing to resist Big Tech’s lobbying efforts, to a certain degree. (For more background on how Big Tech plays the IP game, read this recent article in Forbes Magazine.)

The proposed bill also garnered support from organizations such as the Small Business & Entrepreneurship Council who’s on record for strengthening patent protection, while the US Inventor advocacy group opposes it on the ground that it does too little to restore the current situation. Although it is true that the bill is far from perfect and will not fix everything at once, it is a clear step in the right direction and incremental progress should not be discarded at the altar of some purity test.

Should this legislation come to pass and invalidation rates at the PTAB fall in line with those with the courts (roughly 50% instead of 80-85%), this would significantly alter the status quo in favor of patent holders who are currently getting a raw deal at the PTAB. In turn, we are confident that this would directly move patent valuations upward.

Notable Transactions

A vibrant patent market is good for everyone, buyers and sellers alike, as it makes this asset class more liquid and therefore more easily transactable. Thus, we are happy to point out a few recent transactions that were reported publicly (most aren’t). Well known NPE Dominion Harbor, who has been a regular acquirer of large swaths of patents in the past from Intellectual Ventures, recently purchased roughly 100 wireless communications patents at the end of October. It now owns close to 20,000 assets in its vast portfolio and boasts a 90% success rate in prelitigation licensing.

A major licensing transaction took place between Adeia (formerly Experi) and Amazon whereby Amazon took a multi-year license to Adeia’s video codec’s portfolio for an undisclosed amount (watch for Amazon’s next SEC filing though as it may be reported then if deemed material). The deal comes a day after Adeia also renewed its media IP licensing agreement with Vizio, a major TV maker in the U.S and follows a major loss (and injunction) for Amazon in their litigation with Nokia before the UPC in Europe.

Over the past years, there has also been a trend toward consolidation in the IP service providers industry. As a result, there are very few independent firms left that provide patent analytics and/or docketing systems. The last one of notoriety, Anaqua, was recently acquired by Nordic Capital, a P&E investor in technology and payments. This would still keep Anaqua independent, at least for a little while, as everyone knows that the P&E model is based on relatively short-term exits.

UPC’s Continued Momentum

I have commented on many occasions in this column on the Unified Patent Court’s (UPC) activities since its inception last year and its rapid evolution as the forum of choice for both Opcos and NPEs for asserting their patents. This is due in large part to the quick time to trial, relatively low costs, high level of expertise (and no bias) from the bench and its ability – and willingness – to grant injunctions. Add to this the appetite to tackle complex cases with worldwide repercussions in the standard essential patents (SEP) space, as demonstrated last week when the UPC issued its first judgment in a FRAND patent case, with the Mannheim Local Division ruling in favor of Panasonic against Oppo. The decision affirms the UPC’s jurisdiction over FRAND counterclaims and provides a detailed interpretation of the Huawei v. ZTE guidelines for standard essential patent licensing. Notably, the court’s approach differs from the European Commission’s recommendations, particularly in its interpretation of FRAND negotiation principles.

This is definitely good news for large patent owners and patent pools alike who own several SEP patents and have been using courts around the world to establish fair, reasonable and nondiscriminatory (FRAND) royalty rates for their licensing activities. The UPC is now poised to become THE center for excellence in those matters, supplanting individual national courts. The UPC is also in the process of adding a Mediation and Arbitration Center to its menu of services. Meanwhile in the US…

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And the New USPTO Director Is…

In my last column, I discussed at length the track record of Director Vidal under the Biden administration. If you read it, you would know by now that the importance of who is going to be the next USPTO director cannot be understated; that person truly sets the tone and the policy that will drive the agency’s direction for the foreseeable future. We saw it under former Director Andrei Iancu during Trump’s first presidency and how things reversed course under the present administration.

To understand the process, one must remember that the USPTO Director is hired by and reports to the Commerce Secretary (the USPTO accounts for about 30% of the staff of the whole Commerce department). Thus, it is important to first assess who will be the next Commerce Secretary, assuming that person is the one indeed making the choice for Mrs. Vidal’s replacement.

The current pick by President elect Trump is the CEO of investment firm Cantor Fitgerald, Mr. Howard W. Lutnick. While Mr. Lutnick needs to be confirmed by the US Senate, as with every other cabinet nomination, the consensus here is that he will easily clear that hurdle as he is both deemed competent and largely non-controversial for this job, something that cannot be said of many other current nominees.

More interestingly, and probably a first in this case, Mr. Lutnick is an inventor! Yes, you read this right. And he is not only the accidental inventor who contributed some incremental idea in a group session and had to be named as co-inventor to satisfy the legal requirements. He is a very prolific inventor, with hundreds of patents to his name, mostly in the fintech area. Indeed, a quick Google patent search naming him as the inventor yields over 300 patents worldwide. No category of patents has been emasculated so blatantly by the death squad combo of PTAB and Alice as fintech inventions. So, it stands to reason, Mr. Lutnick not only believes in the importance of technological innovation and patent rights, but he has also undoubtedly been on the receiving end of many invalidation procedures. This leaves a mark, as every inventor knows. His firm has also aggressively tried to enforce its patents in court and Mr. Lutnick is surely aware by now of how the deck in currently stacked in favor of defendants in any patent lawsuit. In short, he understands how the IP game is currently played and enters this position far from blind to the struggles of protecting patent rights.

Therefore, one would naturally assume that he will try to attract a candidate that is in line with his own values and experience, which would bode well for inventors and potentially help move some bills (see above) faster by lending support from the executive branch. This is why it is so surprising to hear a rumor that the name of Vishal Amin, a Republican who is presently head of IP policy at Intel, has been floated as the next Director. Such a choice, if confirmed, would be the equivalent of putting the fox in charge of the henhouse, as Intel has been one of the most aggressive companies in the past decade in lobbying to water down patent rights in the US and abroad. This would be very similar to the disastrous Michelle Lee appointment under Obama after she had served as Google’s chief patent counsel. We all saw how that went down…

This is also why many pundits do not believe this rumor to be true and it could simply be that someone is sending a trial balloon to see how the community will react to their name. At the same time, there is no guarantee that Mr. Lutnick will be the one selecting the next Director; he may simply be told by the next White House who their choice is with no other input. This seems to be the Trump model so far, naming loyalists to many posts (including his two daughters’ fathers in law) without primary regards to whether they can actually do the job, as it has been widely reported in the press. And if Elon “Patents Are For The Weak” Musk has it his way, the next USPTO could very well be the one who will oversee the Great DOGE Dismantlement of the patent office as we know it, leaving only a skeleton of employees and an ever-increasing backlog of pending applications, which is already at an historical record high. In such a case, one should no longer be looking for Mr. Lutnick to be the inventors’ savior, as his track record would suggest. I guess we will have to wait to see whether his or Elon Musk’s side will prevail. My bet is that by the time the choice has to be made (3-6 months usually), Musk will be long gone as his and Trump’s egos are simply too big for one planet. Let’s hope I am right. Stay tuned!