It’s been an active several weeks in the IP world and I will highlight a few noteworthy topics below. We are also pleased to report several new transactions detailed in our “Tangible IP News” section. Last, but not least, I offer my predictions on what I see unfolding in 2023 in the IP Market and I compare them to ChatGPT’s.
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.
Tangible IP News
On the personnel front, I am pleased to report that Carly Boon, who has been with us for 5 years now and attended the last IP Watchdog Conference in Dallas last fall was recently promoted to Senior Director, Advisory Services & Business Operations, a well-earned promotion.
On the deal front, we recently brokered the successful sale of a low energy Bluetooth antenna portfolio. You can see the full announcement here. We also successfully represented the buyer in the acquisition of a patent portfolio owned by a large pharmaceutical company.
Finally, Tangible IP was retained for the second consecutive year by the Allied Security Trust (AST) consortium representing about 50 of the largest companies in the world as its exclusive patent broker to monetize the portfolio it acquired through its 2021 IP3 Program.
In terms of new assets for sale, we recently made available for sale and/or licensing a portfolio in the HVAC area with strong relevance to several industry players.
If you have interest in Digital Content Management and Security assets, please reach out as we represent a great portfolio owned by Digital Keystone in this sector.
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 firstname.lastname@example.org.
Featured Portfolio For Sale
Given our audience, we felt it prudent to start sharing a few particularly interesting portfolios available for sale. This issue, we will focus on a foundational patent portfolio in the High Frequency Trading sector owned by industry leader SpectraNet.
Foundational High Frequency Trading Portfolio
Milliseconds mean big dollars in the Hight Frequency Trading (HFT) sector! Tangible IP is pleased to represent and highlight SpectraNet, Inc, the owner of foundational patents in this sector. SpectraNet’s IP can lower the latency on HFT links by hundreds to thousands of microseconds, depending on the exact path and system. A shortwave path from NY to London using the SpectraNet patented technology will have about 8 milliseconds lower propagation latency than the lowest latency transatlantic fiber built especially for the financial industry. Trades using SpectraNet’s technology happen faster than any others thus beating competition to a buy or sell call. This provides a significant competitive edge compared to traditional traders and results in billions of dollars of annual revenue.
The SpectraNet portfolio consists of seven total assets across 2 families with an open application and roughly 10+ years of remaining enforceable life. There is evidence of use prepared for 5 of the largest companies in this sector. There are 10 total claim charts available with substantial supporting documentation which further highlights the foundational opportunity of the portfolio.
For more information, please reach out directly to us at email@example.com.
We are always open to reviewing high quality portfolios. Some of the areas of most interest to our buying network right now include:
- Medical device technology – wearables and IOT health monitoring also of interest
- Autonomous driving systems
- Hardware such as cameras and displays
You can review our criteria here but if you own a patent portfolio with at least two issued US patents and have knowledge of others using your technology (infringement), we are happy to review for potential brokerage. We will also look at larger portfolios where evidence of use is uncertain.
We also have a buyer with interest in acquiring battery-related assets – specifically rechargeable assets applicable to either (or both) consumer devices and electric vehicles.
Please reach out to firstname.lastname@example.org with any assets that may match these requests.
When “Pay to Play” Goes Too Far
I recently attempted to register for a couple of upcoming IPBC events organized by IAM Media, which I have attended virtually pretty much each year for the last decade. I’ve also sponsored and spoken at these events on previous occasions. IAM has always had a pretty direct “pay to play” approach (like most conference organizers) for their events, meaning that if you want to be a speaker, you need to be a sponsor first, and generally at a pretty high level (e.g., Gold level). I personally don’t like it, as it tends to dilute the quality of the content, but I accept it as a fact. What I do have a problem with is when IAM tells me that because we are a brokerage firm, we have been looped in the “service providers” category and now must buy a sponsorship package in order to even ATTEND the conference for three times the cost of attendance! Patent brokers are a vital part of the IP marketplace that IAM has been trying to develop over the past 15 years and we add badly needed grease to the gears of a very illiquid market. Without a broker, most patents will simply not sell as brokers account for the quasi totality of patent sales year after year, according to the most recent ROI data. (See below).
Brokers talk to buyers and sellers daily and often have the best perspective on what is trending and where things are going. In short, brokers keep this market alive. To deprive them of an opportunity to both stay current and share that knowledge with the IP community by making their attendance at these events so damn expensive seems like a really bad idea.
A couple of interesting stories caught my attention in the past month. First, there was an interesting announcement by Nanoco Technologies, backed by litigation funder GLS Capital, that announced a settlement with Samsung. What’s surprising is they disclosed the actual amount ($150M) of the settlement in their press release, which is very rarely accepted by Defendants, and what I assume was a condition for Nanoco to do the deal itself. I surmise that it was meant to send a message to other infringers who will likely be the next targets in the campaign. Yet, it does offer a peek behind the curtain on settlements and shows that clearly some very large amounts of money change hands outside of a court verdict. This suggests that many other settlements where specifics were not disclosed may be as large or even larger than some of the reported court decisions. And contrary to verdicts, settlements do not get overturned or reduced on appeal!
There is also an interesting potential development brewing that could have a significant impact on how people value risk and, as a result, patents themselves if the US Supreme Court steps in. And it all started with a jump rope. Molly Metz is a former 5 time jump rope world champion and inventor of a much-improved jump rope. US inventors did a great short movie about her story. She sold a ton of those until the knockoffs appeared on the shelves. When she sued for patent infringement, she was taken to the PTAB who recently invalidated her patents (surprising, right?). If you want to know what is broken with the US patent system, this is Exhibit A. Molly’s attorney is now raising the interesting argument that damages incurred by infringing products PRIOR to the cancellation of the patents should still be accounted for, just like someone should still pay for having access to magazine, or streaming channel, prior to cancelling their membership. In other words, cancellation of a patent by the PTAB should not have any retroactive effect. This is actually the way things work when a patent expires naturally, as the owner can still sue post-expiration for damages incurred during the last 6 years when the patent was still in force.
The US Supreme Court will soon have the opportunity to decide if it wants to entertain this argument and hear the case on the merits. If it does, there will be wide speculation that could create some turmoil in the market. Companies may suddenly be facing a risk that patent invalidation only really stops the bleeding in terms of future royalties, but doesn’t really affect past damages, which usually account for the lion’s share. To be followed closely.
…And Our Latest Predictions
In our last newsletter, I came back on my 2022 predictions and concluded that they had tracked very well considering that I had made 10 of those and got 8 right. This is a hard act to follow, so I already announced that I would limit myself to only 5 this year. No reason to go overboard and stain this great record…
I first did what any teenager would have done WITH a last-minute assignment; I simply asked chat GPT to make 5 predictions for me for the patent market in 2023. 😊
Here is what I got: (there was a full paragraph for each of the following which I am skipping here, but you can try at home)
- Growth in the Number of Cross-Border Patents
- Increased Demand for Patent Licensing
- Greater Importance of Patent Litigation
- Growth in Demand for Patent Valuation Services
- Emergence of New Patent Markets
Not bad, but a bit too generic for my taste. We’ll try again next year. Now on the real stuff:
1. The patent market will continue to split in two opposing segments; the first one (going down) is where operating companies acquire assets. Corporate patent budgets are down in 2023, people in IP departments with vast institutional knowledge are being laid off and it is hard enough to justify the cost of maintaining, let alone growing, one’s portfolio organically. Plus, why buy when you can use the PTAB and the court system to drag things out over a decade? The second one (going up) is made of well-funded NPEs who have access to vast amounts of cash to feed their assertion programs. This trend will likely accelerate in a down economy as money managers are looking for alternative opportunities, and playing patent litigation roulette always looks enticing from the outside.
2. The US Supreme Court will screw inventors once again; this time over the concept of enablement. We all know by now the carnage it left in its wake with the Alice doctrine. Watch out now for the Amgen v. Sanofi case that it scheduled to be heard during this session. Here is the issue: “Whether enablement is governed by the statutory requirement that the specification teach those skilled in the art to “make and use” the claimed invention, or whether it must instead enable those skilled in the art “to reach the full scope of claimed embodiments” without undue experimentation—i.e., to cumulatively identify and make all or nearly all embodiments of the invention without substantial “time and effort.” This may sound technical for the uninitiated but, if it elevates the current burden, it is yet another tool offered to defendants to challenge the validity of any issued patents after the fact. As if they needed more…
3. US Congress will manage to pass NO legislation on patent rights during the current session; I know; it is almost too easy to predict but wait: with the Republican party winning back the House, Congressman Darrell Issa became the new House IP Subcommittee Chairman, despite US Inventors putting in a good fight to defeat him based on his track record pushing patent rights averse to inventors. So, this could give a second life to some bills that have been on the back burner for a while. However, with Senator Patrick Leahy leaving the Senate, the opposite is happening at the Senate level and inventors now have a friendlier audience with Senators Tillis and Coons back to lead the Senate Judiciary Subcommittee that is responsible for IP matters. So, it is doubtful that both sides will agree to pass similar legislation. And since it takes all the stars to be perfectly aligned in Washington to pass ANY bill, I predict that some version of it might pass either the House or the Senate, but not both, which is required in the US to become law.
4. A flood of patents owned by failed startups will be sold to NPEs and feed the new wave of patent litigation. We saw this phenomenon in 2001 when the DOT.com bubble burst, although the legal environment was a lot more conducive to asserting patents at that time. Each time there is a recession, many companies buckle up and all that is left for their investors to capitalize on are their intangible assets, primarily patents. Feed this into a market where NPEs can buy on the cheap and find ample funding for their campaigns; it’s just too hard to resist.
5. Most people will opt out of the UPC. I’ve commented several times on the ever-changing date for the official start of the long-awaited Unified Patent Court in Europe. For sure it is coming this year to a theater near you! But the devil you know is sometimes better than the one you don’t and I suspect that many large patent owners who assert their assets in Europe will take their time and observe how things unfold before embracing this new tribunal.
And a bonus one: As a result of the ChatGPT frenzy, AI will become more tightly integrated into patent analytics software tools, because people will demand it. And maybe someday, there will be one of those expensive software packages that will actually guess right and find the proverbial diamond in a pile of coal.
In the meantime, we all get to keep our jobs for at least another year!