This is the season where we find ourselves praying for miracles and hoping for things to take a turn for the better in the year to come. Let’s see how this plays out.
A couple of weeks ago, Erika and I attended the 10th annual IP Dealmakers Forum in New York City. As I have yet to miss one of those events, and since most people we meet there are also regular attendants, this provides a great opportunity to work the room and get a sense of how people are feeling about the IP market in general, and what may have changed from last year. I elaborate on that below.
Patent litigation can be a curse or a blessing, depending on where you sit. Either way though, it is one important metric of the vitality of this market, as asserting patents is – unfortunately – the obligatory passage for getting most deals done nowadays with the usual serial infringers. I share the latest statistics in that regard and what they suggest.
The UPC is going gangbusters already and was the talk of the conference, this time for the right reasons (i.e. it is working). I share the latest statistics showing how it is shaping up and helping patent holders while giving a new luster to European patents.
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.
On behalf of the whole Tangible IP team, we wish you happy holidays!
Tangible IP News
Our team was recently interviewed by IAM Magazine about the increase in video steaming assets on the patent secondary market. You can read the full article here (behind firewall).
We also have several other 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 firstname.lastname@example.org.
Call for high quality portfolios!
We are always open to reviewing high quality portfolios. Some of the areas of most interest to our buying network right now include:
- Video compression SEPs and/or video streaming
- Block Chain related assets
Medical Device technology – particularly wearables and IOT health monitoring
- Patents applicable to RFID tags, RFID Antennas, RFID readers and Near Field Communication (NFC) devices.
- SEPs (Declared or not) relevant to any of the following: 3GPP, 802.11, LTE, 5G
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.
Please reach out to email@example.com with any assets that may match these requests.
We just began selective outreach on a great patent portfolio in the Personalized Advertising and Monetization of Digital Content technology space. This has a great inventor story. The portfolio contains 27 assets and our patent attorneys have prepared 12 very high-quality representative claim charts relevant to various leading industry offerings. If you feel you should have received copy of the materials, please email us at firstname.lastname@example.org.
The Elusive Quest for the Perfect Patent
Our main takeaways from the conference we attended in NYC can be summarized as follows. First, the so called “bad patents” are gone; nowadays, there are so many ways to invalidate an issued patent that no one in their right mind would want to enforce their rights with anything but the highest pedigree assets where indisputable validity, strong infringement theory and substantial damages must be assumed. The flip side to this; only a minuscule percentage (way less than 1%) can meet this very high bar and the smallest blunder in drafting (e.g. “a” vs “the” in a claim) or during prosecution can be fatal, leaving absolutely no margin for error.
Second, there is no shortage of money to transact these high-quality assets. The main problem is that a lot of this money is still sitting on the sideline waiting for the perfect match, which often proves elusive. In a sense, there is an over-supply of money to buy patents or invest in their assertion, but an under-supply of assets that meet this high bar. If this continues for too long, that money is going to be moved elsewhere and will likely not come back. Already, many litigation funders are diversifying outside of the IP world. On the other hand, insurance companies are now going beyond their traditional patent verdicts coverage and have found fertile ground for some new products, such as insuring the value of a portfolio itself, thus allowing patentees to find litigation funding more easily for a case, or more simply, non-dilutive IP backed lending.
Third, there was a real consensus that the US legal environment is still not favorable to patent owners and that no one really expects legislation in front of Congress (PEVAIL & PERA Acts) to fix this anytime soon, especially during an election year where big lobbying budgets are deployed by those who oppose those bills. Thus, patentees must pick their battles and fight where they stand a chance to have their day in court before too many years have passed, which means either Texas or the ITC if in the US, before the UPC if in Europe (more on this below) or in some emerging countries such as Brazil, Columbia, India, etc.
The PTAB – Back to Square One?
One generally shared impression at the conference was also that the PTAB is back to where it was a decade ago and it has become increasingly difficult to avoid a case challenging the validity of a patent from being instituted, let alone successfully. Defensive aggregator RPX tried to challenge this view with some datapoints to prove that such institution rates have remained constant over the years and through several directors. See table below.
However, once you group them under each director, it still emerges that both institution rates AND the percentage of cases where all claims are invalidated by the PTAB have never been higher than they are under director Vidal, surpassing “kill rates” since the inception of the beleaguered tribunal, including during the heydays of Michelle Lee at the helm. See the following tables.
All of this is happening under the watch of USPTO Director Vidal, despite all her touted efforts to improve patent quality since she took over. This comes down to two things; either USPTO patent examiners have learned nothing in 10 years and are still allowing as many “bad” patents to issue (doubtful in my opinion), or the PTAB has resumed its widely denounced institutional bias against patentees, and both its rules of practice and the financial rewards to its administrative judges are incentivizing this trend. In this regard, a presentation by IPR specialist J Carmichael of Carmichael IP was jaw dropping and made many people lose whatever illusions they may still have entertained with respect to how a PTAB “panel” arrives at a decision. Reality: there is no ‘real” panel, and it all comes down to one administrative judge making the call and walking the other two members of the panel through his/her reasoning. The other two are neither paid for participating in the decision nor there is any incentive, financial or otherwise, to dissent.
I have stopped counting the gazillion selfies posted by Director Vidal on her LinkedIn account since she took on the job. It sometimes feels like watching a millennial with an Instagram account… Maybe it is time to do some real introspection and wonder why, as patent quality supposedly keeps improving, more issued patents statistically get invalidated by the same office that granted them in the first place. And to add insult to injury, this comes at a very high cost to the patentee… From the outside, this can only look like a travesty of justice.
During the conference, RPX also shared some recent litigation trends at the district court level that show that we have now come back full circle, with the Eastern District of Texas having reclaimed its old lead position since the order from former Chief Judge Garcia in the Western District of Texas assigning cases randomly to limit the number of case Judge Albrights could manage, which means that a lot more cases are going to judges who have little IP experience and/or are known for not liking patent cases. Go figure!.
Similarly, the number of new patent cases filed has continued to decline in the past year, probably a sign that few patents are considered of quasi “perfect” pedigree to attract funding toward their assertion.
The table above shows that operating companies still make for over 40% of new cases, thus debunking the myth that most patents are asserted by NPEs. It is also worth noting that most of the decline in cases in the past year seems to be attributable to serial NPE IP Edge having filed no new cases in 2023 while they are dealing with their ongoing feud with Chief Judge Connolly in the District of Delaware, which I commented extensively on in my last column. It may also be that new cases are being filed in Europe instead. Which brings us to our last topic.
UPC Off to a Great Start
People have waited over 40 years for the Unitary Patent Court to finally become a reality, so expectations were rather high when the new UPC finally went live last June. And those who supported this new forum for enforcing patent rights have not been disappointed thus far. The speed at which the tribunal issues decisions has been nothing short of staggering. This is not all that surprising given that it did not have any backlog to start with. Things will slow down eventually. But contrast this to most US district courts who will take 3-4 years on average to hear a case and one can understand the appeal of having a swift disposition of their case, win or lose.
According to statistics shared at the conference, the UPC had already heard 104 cases as of a month ago. Roughly half of them (49) dealt with patent infringement, the rest were split between requests for revocation (i.e. invalidity) (20), provisional measures such as preliminary injunctions (6 – and most of them granted), and counterclaims for revocation (29). Those were primarily heard in Germany (62 cases), with France a distant second with 30 cases. Of all these cases, about a quarter were in the electronics and medical spaces respectively. These were followed by mechanics (10 cases), material/chemistry (7 cases), pharma (5 cases) and, surprisingly, only one case in the telecom area. This should not last.
In our next column, I will revisit my predictions for 2023 and venture some new ones for the year to come. Until then, stay safe and enjoy the holidays wherever you are.