Intellectual Property

How The IP Dealmakers Are Dealing

Today’s IP dealmakers are dealing with a challenging market and significant obstacles to unlocking maximum value from IP.

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In a recent column, I shared some IP-related takeaways from a major litigation finance-focused conference I attended recently, the LF Dealmakers Forum. A few weeks ago, the team behind that conference hosted the latest installment of the IP Dealmakers Forum, the 6th annual edition of that event. As always, it was a well-attended gathering of IP professionals representing law firms, IP owners, IP media, and litigation financiers. Like with LF Dealmakers, the organizers were gracious enough to allow me to attend in my capacity as author of this IP column. My attendance was limited to just two sessions, however, as I was laid low for days before the conference by a resilient bout of the flu. 

Truth be told, I was definitely not feeling my best during my short stint at the conference. But that did not stop me from enjoying two excellent panels on the closing day of the event. The first discussed how startups and established companies are looking to leverage their IP to drive growth. And the second addressed how corporations are approaching IP monetization in the ongoing challenging environment that today’s IP practitioners find themselves in. (I have no doubt that the other material presented at the conference was of a similar high caliber, just as I am sure that the one-to-one meetings that are an important part of the conference for attendees will lead to some actual deals.) In fact, these panels were the ones I circled when I first had a look at the conference agenda, so I was glad I was able to drag myself to catch those discussions. They did not disappoint.

For one, there were a wide range of perspectives offered by the panelists, with representatives from multinational corporations sharing the stage with domestic-based IP owners. Both panels featured frank discussion of the challenges the panelists and their companies face in an IP market defined by licensee skepticism and significant legal risk to IP assets, particularly in the United States, where both IPRs and Alice continue to confound patent owners looking to monetize their expensive (to obtain and maintain), wasting assets. As interesting as it was to hear about the challenges, however, it was more interesting to hear how the different companies represented are attempting to solve for them. As one can imagine, a number of different approaches were discussed.

We can start with the insights shared by the inimitable Raymond Millien, chief of IP for Volvo. He emphasized the importance of the IP department working closely with company engineers to identify promising internally developed technologies for outbound licensing, or to identify areas where inbound licensing could help improve the company’s product offerings. He also spoke about the importance of a company’s IP professionals helping to spread the message, both internally and externally, that the company’s IP is valuable. This marketing function may seem trivial in the grand scheme of things, but I for one agree that in a challenging IP environment it is important to maintain a company’s internal IP morale and competitive positioning as an innovator. Doing so helps give the company a head start when the IP environment becomes more favorable, while continuing to ensure the company’s inventors to keep inventing. His insights were echoed by others, particularly in terms of demonstrating how important it can be for startups to develop IP early on in their corporate lifecycle, in order to both attract outside investment and to give the company options if confronted by infringers or IP claims raised by others.

On the monetization front, it was interesting to hear certain themes echoed over and over. At the forefront was the message that companies interested in monetization are best served by having a concrete strategy in place for their efforts — one that takes into account how the company will handle the costs of their monetization efforts while remaining realistic about the expected returns and the company’s place in the IP ecosystem. At the same time, even representatives from non-traditional IP plaintiffs evinced a greater willingness to consider IP assertion, either directly or through divesting assets to non-practicing entities skilled in that endeavor. At least one panelist, Siemens’ Gerhard Tschiedel, spoke of an evolution within his company in its approach to patent divestment, including an increased willingness to divest assets generally — especially those generated by business units no longer offering products — as well as a willingness to at least explore use of litigation finance. Likewise, other corporate representatives indicated similar developments at their own companies, including at least one panelist who conceded that their company had come to understand that successful monetization will typically involve at least some level of investment by the IP owner, especially in the face of recalcitrant licensees. Interestingly, there was a consensus that while IPRs are a challenge for patent owners, they are also potential vehicles for unlocking patent value, considering that patents that survive IPR gain an immediate boost to their licensing prospects as a result.

Ultimately, IP conferences are only as good as the willingness of the presenters to speak frankly about how they and their organizations are dealing with the fluctuating market conditions in our field. At that level, IP Dealmakers did not disappoint, as both panels that I attended contained panelists that were more than willing to tell the truth about what is happening in the IP market. While it is sometimes more important as a conference attendee to confirm that the right questions are being asked, it is also helpful when fellow professionals at least attempt to share some of the answers to those questions. Yes, today’s IP dealmakers are dealing with a challenging market and significant obstacles to unlocking maximum value from IP. But it is heartening that there is a cadre of dealmakers still willing to deal. For those interested, seeking out those fellow dealmakers is more important than ever.

Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome. 

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Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

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