Friday, 2 December 2016

November's Aistemos blogposts: a handy summary

Now that November has departed, it's time to review the blogposts on topics that have occupied us, or indeed preoccupied us, over the past four weeks. Accordingly, here's a list of the previous month's substantive Aistemos features. This service is provided for your convenience if you have been away or simply too busy to follow them in real time, and for your general information and amusement if you are not yet familiar with Aistemos and its take on IP analytics, management and strategy. Each blogpost listed below comes with a moderated comment facility, so please feel welcome to respond to anything you read, whether you disagree with it, wish to amplify or clarify its points, or merely provide further links to relevant material.

To check each post out, just click the title:

The UK government announced its intention to prepare to ratify the Unified Patent Court Agreement (UPCA). The UPCA provides for the machinery whereby  European Union-backed Unitary Patents will be litigated. What does this tell us about UK Brexit strategy?

**********************************************
This is the first in a series of special reports based on the research conducted by Aistemos earlier this year in its IP Strategy in the Board Room project [on which see our post here].  The text below is designed to introduce readers to the continuing growth of importance of the intangible asset, shedding light on what this means to businesses and investors.

**********************************************
Our attention has recently been drawn to another potentially useful service for the intellectual property community. It's called Omnity and it claims to accelerate "the discovery of otherwise hidden, high-value patterns of interconnection within and between fields of knowledge as diverse as science, medicine, engineering, law and finance". What does Omnity seek to add to the growing and increasingly sophisticated range tools for delivering and analysing information? 

**********************************************
This weblog has mentioned in the past that trade secrets are in a way the last frontier for effective intellectual property management: trade secrets are often amorphous, difficult to protect and to license safely, hard to value and complicated to deal with in terms of in-house rights management [for a helpful review of management issues click here; for a case study click here]. Being unregistered and having so very little publicly accessible profile, they also pose a huge challenge for the discipline of IP analytics. The article featured here, by Donal O'Connell (Managing Director of Chawton Innovation Services Ltd and the author of a number of articles that have appeared on this blog over the past year and a half), looks at some key issues that currently give cause for concern.

**********************************************
Economic Approaches to Intellectual Property, a new book by Nicola Searle and Martin Brassell, deserves a spot of serious attention. Dr Searle, currently of Goldsmiths, University of London, has previously served as Economics Adviser to the UK Intellectual Property Office and is well known as having a sense of humour and a level-headed, sympathetic approach to intellectual property rights -- both of which being qualities that appear to have eluded many of her fellow economists.  Martin Brassell, co-founder and Chief Executive of Inngot, has hands-on experience of raising capital for SMEs; he also co-authored Banking on IP?, an independent report for the UK Government. We take a look at this promising publication.

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This post publicises a call for "ugly" clauses in intellectual property agreements -- these being clauses that employ vague, ambiguous or otherwise objectionable obligations on either party.  Specimens of such clauses, appropriately anonymised, are sought for use in teaching by Amsterdam-based IP attorney and academic Alexander Tsoutsanis

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This is a Cipher report on Industry 4.0 which gives a pictorial analytic perspective in order to explain both the meaning and the importance of this term, paying particular attention to patents.

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You can check out Aistemos's posts over the previous twelve months below:

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Thursday, 1 December 2016

Hot off the press: the Industry 4.0 webinar recording is now available

Recent blogposts have focused on the challenges created by "Industry 4.0", a term that is gaining currency in the world of the Internet of Things. These posts include our well-received and much-read report on key technologies and trends, as well as a series of posts relating to "Industry 4.0 through the lens of patents", the Aistemos webinar which took place yesterday.

The recording of yesterday's webinar, under the title "Examining Industry 4.0", has now been posted online for the benefit of those who wished to participate but were unable to do so. Total running time is just over 27 minutes, so it needn't eat into your valuable time!

You can follow the presentations by Marcus Malek and Sebastian Muller-Borges, together with relevant visuals, by the simple expedient of clicking here.

Monday, 28 November 2016

Patents, Brexit and a first firm indication of British policy

Earlier today the UK government announced its intention to prepare to ratify the Unified Patent Court Agreement (UPCA). The UPCA provides for the machinery whereby  European Union-backed Unitary Patents will be litigated.

The UK government statement reads as follows:
This is part of the process needed to realise the Unitary Patent and Unified Patent Court (UPCA). Under the new regime, businesses will be able to protect and enforce their patent rights across Europe [notwithstanding Brexit] in a more streamlined way - with a single patent and through a single patent court.

The court will make it easier for British businesses to protect their ideas and inventions from being illegally copied by companies in other countries [given the scope of the UPCA, this refers to most of the countries in Europe, whose businesses will also find it easier to protect against unlawful use of their inventions in the UK].

UK Minister of State for Intellectual Property, Baroness Neville Rolfe said:
The new system will provide an option for businesses that need to protect their inventions across Europe. The UK has been working with partners in Europe ['partners in Europe' does not read like a phrase that points to the so-called 'Hard Brexit' option] to develop this option.

As the Prime Minister has said, for as long as we are members of the EU, the UK will continue to play a full and active role. We will seek the best deal possible as we negotiate a new agreement with the European Union. We want that deal to reflect the kind of mature, cooperative relationship that close friends and allies enjoy. We want it to involve free trade, in goods and services. We want it to give British companies the maximum freedom to trade with and operate in the Single Market - and let European businesses do the same in the UK [this suggests that the reason for committing to the UPCA is not the creation of an opportunity to jump out of it two years after triggering Article 50 of the Lisbon Treaty].

But the decision to proceed with ratification should not be seen as pre-empting the UK’s objectives or position in the forthcoming negotiations with the EU [in other words, the achievement of Brexit is still the objective and, when it comes to negotiating its terms, everything remains on the table].
Following the announcement today, the UK will continue with preparations for ratification over the coming months. It will be working with the Preparatory Committee to bring the Unified Patent Court (UPC) into operation as soon as possible.
The interesting thing about this news is not its content -- though many reputable and well informed commentators would have bet against it.  Rather, it is the fact that the UK's decision on the UPCA -- a key indicator as to where the government stands on Brexit and the continuation of industrial and commercial relations with its closest neighbours -- has been more or less ignored by the mainstream media. Even now, while specialist legal and IP channels have spread the word, at the time of posting this article, the only national publication that has picked up this development and reported it online is the Financial Times, here

We would imagine that this important expression of intent on the part of the UK government will be reflected not only in other areas of intellectual property such as trade marks, designs and copyright, but further afield in areas like data protection, trade secrecy, competition and antitrust policy and beyond. This in turn should have a profound impact on investors' decisions and their interpretation of public data, big and small. Why then have the media, so quick to pontificate on Brexit and all its ramifications in general terms, have been so slow to pick up on today's news? Is this just another example of intellectual property being ignored because its importance cannot be easily grasped?

You can read the text of the UPCA here.

Friday, 25 November 2016

Industry 4.0: a review of key trends and technologies

We've come a long way
since the days IoT
looked like this ...
Here's a reminder that Aistemos is running a timely webinar this coming Wednesday, 30 November, with the title "Examining Industry 4.0 through the lens of patents". As we explained in an earlier blogpost, the term "Industry 4.0" refers to
"the increasingly connected, automated, computerised industrial revolution ... which is used to describe anything from smart refrigeration to industrial automation".
This webinar is going to take an in-depth look at different characteristics across the key relevant technology areas, emphasising that "Industry 4.0" (also sometimes called "Industrial IoT”) consists of independent and very diverse technologies that have come together to form the fourth industrial revolution -- each of which has its own specific characteristics but which must be taken together in order to integrate and synthesize Industry 4.0 functionality.

Cloud Computing:
is there an Industry 4.0
silver lining?
Will this fourth industrial revolution become the next IP battleground? Are there clear leaders already? What will the implications be for IP strategies -- in terms of risk mitigation and value creation? These questions and others will be addressed when we discuss the outlook for industry 4.0 as it impacts Robotics, RFID, Cloud Computing, 3D Printing and Sensors. We also consider the countries that are taking the lead in driving Industry 4.0 growth: China, USA, Korea, Japan and Germany.

Further details of this webinar, and what to do if you want to know more about the subject but can't join in on Wednesday, can be found by clicking here.

To read the Cipher review of key technologies and trends in Industry 4.0 click here.

Tuesday, 22 November 2016

The Rise and Rise of the Intangible Asset

Not just hot air:
intangibles are still
on the up-and-up
The Rise & Rise of the Intangible Asset is the first in a series of special reports based on the research conducted by Aistemos earlier this year in its IP Strategy in the Board Room project [on which see our post here].  The text below is designed to introduce readers to the continuing growth of importance of the intangible asset.
The world is currently in the midst of its fourth industrial revolution. Technology is changing the way we live, and reworking the fabric of our global economy.

Just 15 years ago, 5% of the world’s population was connected to the Internet; now that figure stands at 40%. The impact of the digital revolution is not just evident in the way we hail our taxis, book accommodation in new cities, or order takeaways; it is impacting the way companies are built and how they obtain their financial value.

It is estimated that some 70% of the value of a modern company is now derived from intangible assets, such as patents and trade marks. And in the UK, intangibles make up 53% of their total value of the FTSE 100, which is widely viewed as a benchmark for wider industry.

Five years ago, as the UK began to pull itself free from the longest recession in living memory, spend on IP even overtook the money spent on tangibles, such as equipment or real estate. Nesta, the innovation charity, found that the UK invested £137.5 billion in knowledge assets in 2011, compared to £89.8 billion in tangible assets.

Across the European Union, 42% of total economic activity -- equivalent to £5.1 trillion annually -- is now generated by IP-intensive industries. Innovative companies now employ 38% of the EU workforce. As recently noted by European Patent Office president Benoit Battistelli: 
“Intangible assets are increasingly important for innovative companies today. We see that this has a positive impact on jobs, growth and prosperity.”
The business case for intellectual property

Many different intangible assets contribute to a company’s value. While patents are an important part of the picture, other IP, such as trade marks, copyright, design, and even trade secrets, can all add substantial value to a business.

Aistemos recently surveyed a wide range of business leaders, from high-level executives at some of the world’s most innovative companies, including BAE Systems, Siemens and Bayer, to the founders of small, fast-growth start-ups, to gauge their view on the wider IP landscape. Some 58% of the 80 respondents now spend more than $1 million on IP each year; just 20% have budgets of less than £250,000.

The focus of these firms is moving slowly away from the old mainstays of competitive intelligence or risk management -- although these remain relevant in an increasingly globalised marketplace -- towards the active commercialisation of IP.

Aistemos’ exclusive research shows that, while competitive intelligence and risk management remain primary concerns for 60% of business leaders, changes are afoot as IP licensing and litigation are now a close second, both stated as being “very important” for 40% of respondents.

“As the UK moves to an increasingly knowledge-driven economy, the importance and role of IP in enterprise creation, growth and development also grows apace,” said Charlotte Chung, enterprise and innovation policy adviser for the Federation of Small Business, commenting on the new research, adding:
“One area that warrants special attention is the growth of intangible assets, such as reputation and design. Over the past few years, investment in intangibles has grown to outstrip more traditional tangible assets. For businesses looking to better capitalise on their innovation, this increased attention creates great potential, particularly for growth.”
Dan McCurdy, senior vice president at RPX Corporation, a provider of patent risk management services, who took part in the survey, says 
“Every CEO and Board Director needs to structure their companies so that IP is used to deliver ever-improving business results. Once this is done, executives will recognize the leverage available from these assets and the enormous value that they can deliver to shareholders through focused attention on IP, and will find themselves competing for the opportunity to lead this effort within the company.”
IP strategies for changing times

Many companies have traditionally viewed IP strategy as best left to the lawyers or the departments in charge of building IP portfolios but this is slowly changing.

Back in 2004, Bill Gates, founder of Microsoft, made a visionary statement that helped turn the tide: “Over the last 10 years, it has become imperative for CEOs to have not just a general understanding of the intellectual property issues facing their business and their industry, but to have quite a refined expertise relating to those issues,” he said:
“It is no longer simply the legal department’s problem. CEOs must now be able to formulate strategies that capitalize on and maximize the value of their company’s intellectual property assets to drive growth, innovation and cooperative relationships with other companies.”
Intangible assets -- their creation, protection and exploitation -- are now increasingly being incorporated into mainstream business strategy.

At technology giant Siemens, intellectual property is the most valuable asset in the company’s portfolio. It holds 56,200 granted patents across the whole group. The business employs more than 400 people to protect its IP, which span patents, trade marks, designs, and copyright, all operating under the watchful eye of Siemens chief IP counsel, Beat Weibel.

“Siemens invests a lot of money in research and development - around €4.5 billion in 2015,” Weibel said recently, explaining: 
“We have to protect these innovations and ensure that competitors can’t simply copy the knowledge and results we’ve gained. To do that, we need to hold the intellectual property rights. They are the key to Siemens’ treasure chest of innovations, which nobody should be able to steal.”
According to Weibel, IP is no longer viewed in isolation by innovative companies like Siemens. “IP should be a part of business strategy to protect and sustain the competitive advantage we secure through our technology,” he says. “Siemens was built on patents and this heritage makes the value of IP easier for the board to understand.”

New world order

The rise of big data has given companies the tools to understand not only their own intangible assets, but those of rivals and partners too. Companies such as Aistemos (with its analytics solution Cipher) have built platforms that bring transparency to an area that has been traditionally opaque. Nigel Swycher, CEO at Aistemos explains the opportunity this way: 
“Information about intangible assets is no different or less important than financial data or other economic indicators. The bridge that needs to be built is between the world of IP and the decision makers. This is becoming much easier now that there is sufficient data to analyse and the computing horsepower to master it. I see our role as ensuring that the right information flows to the right places at the right time.”
The big data revolution ties in with a new age of transparency across all areas of business. Whether it’s remuneration packages for the management team, or diversity goals, companies are becoming increasingly open with their data. And IP is sure to follow suit. Some companies are in the vanguard of this new movement towards IP transparency. This isn’t just because they see it as a trend worth following: it helps to maximise the value of that IP.

Take the recent launch of the Avanci platform. This new marketplace was created to give companies working on internet of things (IoT) technologies access to standard-essential patents owned by industry-leading technology innovators -- including Ericsson, Qualcomm, InterDigital, KPN and ZTE-- through a single licence. It is an open and more transparent approach to licensing patents in a bid to facilitate innovation in IoT.

Companies are increasingly having to collaborate with other businesses in this way -- even their rivals -- to solve huge technological challenges. But partnerships such as these remain rare: many IP-rich companies, while keen to see transparency from rivals, fear that giving too much away about their own IP could dull their competitive edge.

Industry experts also point to a marked difference in the way IP is viewed in the UK and Europe, compared to the US and China. “China is on the verge of becoming a major technology and IP generator, creating a tidal wave of patents likely to wash over the US and Europe’s shores in the next two decades, enabling China to dominate significant technology areas,” says Ian Harvey, former intellectual property adviser to the UK Government, adding: 
“By contrast, particularly in Europe at some deep political levels, the value of intellectual property is often challenged, putting in jeopardy Europe’s competitive base in its global markets.”
According to Harvey, China, Japan and Korea are innovation powerhouses that have woken up the power of IP to shape markets. Since 2004 there has been more patent litigation in China than in any other country, including the USA. While the recent decision by China’s regulator to slap a $975 million antitrust fine on mobile giant Qualcomm for licensing abuse is another evolutionary signal that cannot be ignored.

Moving into dangerous territory

Over the next decade, the value of IP is set to rise even further as a proportion of company value but many business leaders remain in the dark about its true impact. This is because intangible assets are often completely absent from annual reports. Patents, for example, when they are mentioned in financial disclosures, tend to be lumped together as a number of filings or grants, without attributed value.

According to the FSB’s Chung, this could pose problems down the line. “While most businesses have an awareness of IP, the value of it as an asset to the business and the importance of protecting their IP is, overall, quite poorly understood,” she said, adding: 
“This is particularly true for small firms which typically run on limited capacities and resources - investing time and money to get to grips with their IP can be a burden for many of them.”
She added that businesses who do not see themselves as being rich in IP may be ignoring valuable assets to their detriment: 
“There are real challenges in being able to clearly identify and measure the IP that exists in their business; many businesses will not even be aware that they have created or own IP worth protecting.”
She is not alone in warning that there is a real issue with the way that IP is understood and communicated by businesses in the context of this knowledge-driven world economy. When companies acquire IP, they will often include its value on the balance sheet but where it is generated in-house, it is not. According to Hywel Ball, a managing partner at professional services giant EY, this creates a worrying disconnect. 
“Given that more than half enterprise value is represented by intangible assets, for some companies up to 80%, I worry that this value is not being represented by financial statements. This means that when you look at the stock market, the real value of those companies isn’t visible. As each year goes forward and IP represents a greater proportion of company value, this will get worse".
The majority of business leaders surveyed by Aistemos, however, felt strongly that stating the value of IP as a balance sheet item was riddled with its own problems and might create the opposite of transparency and clarity. Without a standardised way of communicating value, which was universally used, this could be a way to obfuscate a company’s true worth, or generate huge swings in its value.
This piece is also posted on the Aistemos website here.

Monday, 21 November 2016

Associative semantic search technology: Omnity and IP

Our attention has recently been drawn to another potentially useful service for the intellectual property community. It's called Omnity and it claims to accelerate "the discovery of otherwise hidden, high-value patterns of interconnection within and between fields of knowledge as diverse as science, medicine, engineering, law and finance".

What does Omnity seek to add to the growing and increasingly sophisticated range tools for delivering and analysing information? As the company explains:
"In a rising sea of ever growing and increasingly fragmented knowledge, Omnity enables searchers to efficiently find related documents, even if those documents do not directly cite or link to one another.

This accelerates the discovery of otherwise hidden, high-value patterns of interconnection within and between fields of knowledge as diverse as science, medicine, engineering, law and finance.

Omnity is based on fundamental advances in associative semantic search technology, through which we create landscapes of meaning-based relationships arising from the semantic signatures of entire documents. In this manner, the knowledge contained within whole documents can be deeply inter-connected, solely through shared ideas".
Such a facility would presumably enable someone to find references to relevant patents, technologies and prior art on a far wider scale than has hitherto been the case. The legal, strategic and commercial implications of being able to do this, for litigation, negotiation, due diligence, investment and forward planning are sufficiently obvious for us not to need to list them here. 

From the company's website it's not apparent whether its technology and the documentary data it searches are directed to the English language alone or whether it is a one-size-fits-all- tongues operation.  There is a tiered fee structure, ranging from a number of services that are free to "public and academic" users, more costly for professional and executive use and by arrangement for use by enterprises.

Omnity's panel of seven advisers contains some big names (two Nobel laureates are listed), but what will interest businesses in the patent and innovation sphere is the presence of Robert Stoll, a former Commissioner of the US Patent Office and -- for good or ill -- one of the pilots of the America Invents Act. From this we would imagine that Omnity has its eyes on an intellectual property clientele, so we shall be interested to see what sort of mark it makes.

Tuesday, 15 November 2016

Trade secret asset management: cyber issues revisited

Secrets can't be squirreled
away any more, and we need
more protection than Secret
Squirrel can provide
This weblog has mentioned in the past that trade secrets are in a way the last frontier for effective intellectual property management: trade secrets are often amorphous, difficult to protect and to license safely, hard to value and complicated to deal with in terms of in-house rights management [for a helpful review of management issues click here; for a case study click here]. Being unregistered and having so very little publicly accessible profile, they also pose a huge challenge for the discipline of IP analytics.

The piece that appears below, "Cyber security & trade secret asset management", is by Donal O'Connell (Managing Director of Chawton Innovation Services Ltd and the author of a number of articles that have appeared on this blog over the past year and a half).  Its focus is directed to guarding against cyber theft of trade secrets, a practical topic that falls outside the scope of traditional intellectual property practice but which has to be factored into all levels of trade secrecy management since a secret that is stolen is no longer an asset that can be confidently and profitably managed.
Making money from cyber crime

Spam emails, in the form of phishing, continue as a way for cyber criminals to make money. One study estimated that although the click-through rate on spam is phenomenally low, the criminals can make millions of dollars a year out of these campaigns. People actually buy stuff advertised in spam messages, and it is often spam advertising pharmaceuticals.

Stealing from internet bank accounts is also highly profitable for the cyber criminals. Malware on an infected machine waits until the person connects to a bank's internet service. It allows the person to do the authentication, but then takes over the connection and injects its own money transfer commands into the system and often hides those transactions when the person looks at the balance.

Denial of service attacks also generate money for the cyber criminals. The cyber criminals search out businesses in particular that do a lot of commercial activity online. The cyber criminals then threaten to bring down the business's website unless the business pays them. It is extortion, pure and simple.

Another extortion racket is ransomware. This attack encrypts vital business information and essentially holds the organization hostage until an agreed upon ransom is paid at which time the criminals may or may not decrypt the information. Ransomware is not traditionally malware as it is merely an encryption algorithm that the victim does not have a key to perform the decryption. The ransomware either encrypts the victim's hard drive so the information becomes inaccessible or locks the browser. The cyber criminals then demands payment to decrypt the drive or unlock internet access.

However, there is another way for the cyber criminals to make money.

Trade secrets

A trade secret is defined as any information that:

* is not generally known

* confers some sort of economic benefit on its owner.
* must have been subject to reasonable steps to keep it secret.
Broadly speaking, any confidential business information which provides an enterprise a competitive edge may be considered a trade secret.

Stealing trade secrets from companies

A growing source of income for the cyber criminals is generated from the theft of such corporate trade secrets.

Theft of trade secrets means the theft of ideas, plans, methods, processes, technologies, data or any sensitive information.

These secrets are owned by the company and give it a competitive edge. Theft of trade secrets damages the competitive edge and therefore the economic base of a business.

Trade secrets are plans for a more advanced computer, designs for a more fuel-efficient engine, a company's new manufacturing process, supplier agreements, user data, etc.

Trade secrets exist in almost all companies across all industry sectors, and many trade secrets are extremely valuable indeed.

Three years ago, the Wall Street Journal estimated that the cost of cyber-crime in the USA alone was approximately $100 billion. In 2015, the British insurance company Lloyd’s estimated that cyber-crime cost companies as much as $400 billion a year.

The World Economic Forum (WEF) said that a significant portion of cyber-crime goes undetected, particularly industrial espionage where access to confidential documents and data is difficult to spot.

The spy agencies in the UK believe that industry networks are targeted by sophisticated cyber espionage attacks on an almost continuous basis, with many of these attacks being suspected of being state-sponsored. The head of cyber for MI5 in the UK has said that having a foreign spy agency attack your business system is now as certain as “death and taxes”.

The cyber criminals are after any trade secrets that can be harvested and monetized. They are not seeking to steal what is on the menu in the company canteen. They do not want to know what colour paint is on the wall of the offices of the CEO. They are not after information which has already been put into the public domain by the company [though this information, in the form of patent and trade mark applications, design and copyright registrations etc., can alert cyber criminals to the likely presence of specific types of trade secret and thus help focus their efforts]. Rather, these cyber criminals are after the trade secrets of the company, the confidential business information which provides an enterprise with a competitive edge.

How the cyber criminals attack

The cyber criminals leverage a variety of different approaches and techniques to identify the vulnerabilities in the IT network of the company and then attack.

The cyber criminals may leverage backdoors into the IT network. They may try a denial-of-service attack or even a direct-access attack. They may try eavesdropping, spoofing, and even tampering directly with the IT network of the company. The cyber criminals may use privilege escalation, phishing, clickjacking or social engineering techniques. In some cases, they create a false environment of stealing non-pertinent data, diverting the attention of incident responders only to exfiltrate trade secret data residing elsewhere on the network. Regardless of what, where and how they attack, they are after the trade secrets of the company.

Trade secrets within companies

Given that the cyber criminals are after a company’s trade secrets, one would expect to see mature and sophisticated trade secret management practices deployed by most companies. However, this is not the case.

The typical findings within companies are that:

* knowledge of trade secret legislation is limited
* companies are not properly managing their trade secrets, with no clear ownership of the trade secret management process or the secrets themselves.
* documentation about the trade secrets is often poor.
* access to and access control around its trade secrets is very ad hoc.  
* protection mechanisms (administrative, legal and technical) deployed to safe-guard its trade secrets is poor or non-existent.
* there is a lack of any classification of the trade secrets by the company.

* details on whether trade secrets has already been shared with third parties was often missing
* information of any trade secrets belonging to third parties but entrusted to the company is scarce. 
* there is often no audit trail. 
Final thoughts

If the cyber criminals are to be stopped from stealing the trade secrets within companies, it requires that the IT folks and the Legal & IP folks work together as both advanced computer and network security as well as proper trade secret asset management are required.
“If you knew which horses were the thoroughbreds, you wouldn’t have to guard the entire herd” - Rich Weyand, The Trade Secret Office Inc.
This article was first posted by Donal to LinkedIn, here.

A Cipher analysis of patents for cybersecurity technologies can be read here.

Sunday, 13 November 2016

Should the IP community listen to economists?

Economic Approaches to Intellectual Property, a new book by Nicola Searle and Martin Brassell, deserves a spot of serious attention. Dr Searle, currently of Goldsmiths, University of London, has previously served as Economics Adviser to the UK Intellectual Property Office and is well known as having a sense of humour and a level-headed, sympathetic approach to intellectual property rights -- both of which being qualities that appear to have eluded many of her fellow economists.  Martin Brassell, co-founder and Chief Executive of Inngot, has hands-on experience of raising capital for SMEs; he also co-authored Banking on IP?, an independent report for the UK Government on the challenges of leveraging intangible assets to obtain debt funding. 

The publishers -- no less than Oxford Uiversity Press -- have this to say about literary venture:
This book is a comprehensive, critical analysis of economic interpretations of intellectual property, written for researchers, practitioners and policymakers. It analyses the interface between economics [the incomprehensible], finance [the unobtainable], accountancy [the indigestible] and intellectual property law [the invaluable].
Commencing with a critical analysis of the economics of innovation, law, industrial organisation and welfare, the book then critiques the economics of specific intellectual property rights, including copyright, patents, trade marks, geographical indications and design rights [this doesn't leave much out ...]. It further assesses the interaction between economics, IP and competition. Finally, it examines why, when and how IP generates value, reviewing contemporary approaches to valuation and accounting, and the emerging use of IP to facilitate business finance.

This analytical text offers readers a better understanding of IP's contribution to macro- and microeconomics, as well as insights that inform the debate on evidence-based IP policy.
Should the IP community listen to what economists have to say? After years of being hit on the head by hostile and often misguided analysis at the academic level and through the pages of the popular press (in the form of opinion pieces in The Economist itself), it's good to be able to say that here's a book that makes it easier for this reviewer to say "yes".

The message that comes through in this book is that the relationship between IP and the disciplines with which it comes into contact is not set in concrete and that, as we understand more about the manner in which business operates, we must be prepared to reassess fundamental assumptions.  The prime movers when it comes to reassessment of these assumptions are twofold. One is the availability of more, and more accurate data, since it is plain that real information cannot be ignored and must displace any hypotheses, rules of thumb and guidelines that they cancel out.  A second is the ability to analyse that data more effectively, as happens when analytics are brought to play upon big data.  If nothing else, it will make it easier for economists and policymakers to understand that patents, for example, operate very differently in different commercial sectors and at different times in a technology's life-cycle. It will also make it easier for financiers and strategists to appreciate the interplay of different types of intellectual property right with each other within the context of a business plan.

Unsurprisingly, since both its authors are skilled communicators, the book is an enjoyable read. Equal treatment for rights other than patents, short paragraphs, helpful footnotes and a refreshingly up-to-date bibliography enhance the serious reader's experience.  If you are looking for a pleasurable escape from end-of-year vegging out and TV-viewing, you can get full details of this book by clicking the OUP website here.

Thursday, 10 November 2016

From econometrics to Industry 4.0: two events show the breadth of modern IP strategy

Two forthcoming events should by now have caught the eye of anyone who has a serious interest in intellectual property strategy.  While both are webinars and have IP (and especially patent) rights at their core, the very nature of their differences shows the sheer scope of the subject, once thought to be a tidy niche but now a topic that manifests itself in a wide variety of ways, through the application to IP of a number of quite disparate skills, disciplines and data sets.


First to take place is "Assessing the Impact of Patent Strategy", an OxFirst production scheduled to roll out next Wednesday, 16 November 2016, from 3.00 GMT. The speaker, Dr Nick Papageorgiadis, a Lecturer in International Business of the University of Liverpool and Associated Researcher at the department of Business Studies of Uppsala University, will introduce his fresh approach to the measurement of the effectiveness of the patent systems of no fewer than 49 countries. Following this by no means insignificant task, he will discuss the implications of the extent of the effectiveness of international patent systems on the patent strategy of firms, by explaining the results of his latest econometric studies. 

This topic is likely to be of acute interest to any enterprise that is either devising a global patent-based business plan or seeking to scupper a competitor's attempt to secure international control of a contested market.  Further details on signing up for what promises to be a most interesting presentation can be accessed by clicking here


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A fortnight later comes our own forthcoming Aistemos Industry 4.0 webinar, "Examining Industry 4.0: Through the lens of patents". If you're not sure what Industry 4.0 entails,
"the increasingly connected, automated, computerised industrial revolution known commonly as ‘Industry 4.0’ is used to describe anything from smart refrigeration to industrial automation".
As previously mentioned, this event takes place on Wednesday, 30 November 2016, and it begins at 3:00 pm GMT. According to Aistemos:
Following the release of our Industry 4.0 report, powered by Cipher, we invite you to join us for an in-depth look at the macro trends uncovered within our analysis. Marcus Malek, Head of Strategy at Aistemos, and a featured guest speaker will examine the key players in Industry 4.0, as well as taking a deeper dive on the key technologies, geographies and the special case of China.
If you can’t make it for the webinar, why not register anyway? Aistemos will then send you a recording, together with the accompanying visuals. You can register by clicking hereFor more on Industry 4.0, see "Swayed in Sweden? Making the case for Industry 4.0", here.

Wednesday, 9 November 2016

Headache in need of relief? 'Ugly' clauses in IP licences

Late last month an appeal was made, via the IPKat weblog, to crowd-source examples of what that blog described as "ugly" clauses in intellectual property agreements -- these being clauses that employ vague, ambiguous or otherwise objectionable obligations on either party.  Specimens of such clauses, appropriately anonymised, are requested for use in teaching by Amsterdam-based IP attorney and academic Alexander Tsoutsanis, whom some readers may also know as the author of a major treatise on the making of trade mark applications in bad faith. 

Examples of such "ugly" clauses -- which may require litigation before their meaning can be deciphered -- are given: clauses that impose 'per product' penalty clauses on licensees but fail to specify whether the penalty is incurred in respect of each item manufactured in breach of licence terms or for each type of product, as well as 'reserved sector' provisions in patent licences that do not specify the parameters of the reservation. It is not hard to think of other types of "ugly" clause.  The once-ubiquitous obligation on a licensee to use unspecified 'best endeavours' springs to mind, as well as the duty of the licensee to license improvements on a licensed technology. Then there is the perennial problem of the royalty payments being expressed as a percentage, with no clear indication as to what the payments are a percentage of. 

'Ugly' clauses can be found in pretty much every sort of IP contract, whether that contract arises from normal non-contentious trade or from the settlement of a dispute.  The strategic deployment of such a clause can be most effective, whether as a way of using the prospect of expensive litigation as a deterrent to challenging the meaning demanded by the party that imposed it or, quite simply, as a way of cementing a deal by papering over the cracks in consensus between the negotiating parties by drafting terms that are intentionally vague.

When reviewing a business's IP portfolio or seeking to place a value on it, the existence of an IP licence is easily identified by the due diligence process, but the effect of such a licence -- particularly when it is just sitting there quietly with no-one raising issues regarding its potential scope -- is much more difficult to estimate.  The easy cases are where a clause is so precise as to raise no issue of ambiguity or so vague as to be entirely unenforceable; but it's the clauses in between that cause the biggest headaches -- headaches from which there may be no relief.