Thursday, 31 March 2016

IP Competitive Intelligence: Who’s Doing What?

"IP Competitive Intelligence: Who’s Doing What?" This is no idle question. Rather, it's the title of a forthcoming webinar hosted by Aistemos, this being the first time we have ventured into this increasingly popular medium. The date is Wednesday, 4 May 2016.  

For the convenience of those in a variety of time zones, the webinar starts at 1500 pm British Summer Time [note: the term 'British Summer Time' does not imply the existence of the British summer, a phenomenon that is often less in evidence than the fabled Unicorn].  

The webinar's synopsis reads like this:
Who owns what? This is the number one question asked by corporate teams engaged with the execution of corporate business strategy. The second question is how do we compare?
Join us on the webinar as we will take you through Competitive Intelligence, enhanced through the lens of Cipher’s analytics and visualisations [for the uninitiated, Cipher is an IP analytics tool. Apart from being extremely useful, it's also fun. You can read more about Cipher here; some of our blogposts that make use of Cipher data can be perused here].
This webinar will discuss
Marcus Malek
  • Experiences of major corporates integrating IP analytics to help reduce cost and make better decisions; 
  • The application of big data and machine learning to clustering and the comparison of portfolios;
  • Recent developments in data aggregation, analysis and visualisation.
Nigel Swycher
In this webinar, join Nigel Swycher, CEO, and Marcus Malek, Head of Strategy, as they discuss why major corporates are now using Cipher, the world’s most powerful IP analytics and visualisations, to support competitive intelligence and corporate reporting.  

For more information on the Aistemos website click here.  To register click here.

Wednesday, 30 March 2016

Brexit and belief -- but where's the data?

Like the English weather in June, the
consequences of the Brexit referendum
are hard to predict 
On 23 June of this year the people of the United Kingdom go to the poll, to cast their vote in a crucial referendum  on whether this technologically sophisticated and commercially mature nation should remain members of the 28-country European Union or take the significant and probably irreversible step of withdrawing from it.

Many people, from US presidential candidates to influential and articulate groups and bodies in Europe and beyond, are expressing their opinions as to whether it is better for the UK to stay put or shift.  Of particular note here is "Leaving the EU is likely to have a negative effect on IP in the UK", this being the title of a policy statement from the UK's respected representative body for patent practitioners, the Chartered Institute of Patent Attorneys (CIPA). According to CIPA, in a statement that makes it clear that the institute is taking no sides in the forthcoming referendum but is merely acknowledging that its outcome has repercussions for intellectual property:
"Remaining in the EU will guarantee the UK continuing to have access to EU-wide IP apparatus such as the EU trade mark and design rights and, vitally, the new Unitary Patent (UP) and Unified Patent Court (UPC). It will preserve the UK’s status as an influential contributor to these important international frameworks.

The UP and UPC, set to begin operating within the next 24 months, will provide pan-EU patent protection and enforcement. Involvement in these systems, and the establishment of one of the key UPC divisions in London, will bring valuable opportunities to UK businesses, the professionals who support them and our economy as a whole.

CIPA, as the UK representative body for IP practitioners, believes that:
A Brexit could compromise the UK’s access to, participation in and influence over the world’s IP systems. This would not be good for either UK or international IP, or for the role of the UK’s IP attorneys and IP users within the global IP system, Since the IP system supports and incentivises research, development and innovation in the UK, remaining in the EU should better benefit such activities and in turn their contribution to the UK economy,

A Brexit is likely to have a detrimental effect on the current businesses of CIPA members and other IP professionals, and on their competitiveness, in particular in the European market, Since these businesses include significant service exports, their success also affects the UK’s export economy.

A Brexit would bring uncertainty and upheaval to the UK’s IP framework, a framework which is currently stable and well-functioning, global-facing and widely respected. IP rights are valuable commercial tools, their exploitation key to many business strategies and international trading arrangements. IP also incentivises innovation and helps its products to flourish. CIPA urges the UK not to overlook, or indeed underestimate, the impact of the 23 June referendum on IP. ..."
What is interesting about this statement is not its contents or its conclusion but rather what it does not contain.  This referendum was not hatched yesterday upon an unsuspecting public but has been the subject of debate and discussion for some years -- certainly enough time for CIPA to have put together a case that reaches beyond mere statements of belief and predicted likelihood and into the domain of facts and figures.

Europe does not consist merely of the European Union.  On a generous construction, including transcontinentals (Russia, Kazakhstan, Azerbaijan, Georgia and Turkey) and Armenia (technically West Asia but economically and politically European), there are 51 countries.  These include those that have manifestly flourished outside the EU, having developed buoyant economies that enjoy close trading relations with the EU, of which Switzerland and Norway are exemplars, as well as many that are foundering or just treading water.  Some of these fall within the scope of the European Patent Organisation; others do not.

Of more interest and indeed assistance to recipients of the CIPA statement would be some sort of presentation of figures, both to enable members of the IP profession to appreciate the past and to give them a firmer basis on which to predict the outcome of the two possible future scenarios of 'Brexit' and 'Bremain'. For example, how have past patent filing figures, litigation and licensing trends etc been affected by changes in EU membership?  And what patent manpower changes have nations in Europe experienced in the wake of these shifts?  One may recall that there was fear within the Irish patent attorney profession that signing up for the European patent system in August 1992 would spell the end for the nation's small patent attorney profession, yet nearly quarter of a century later it would appear that it has actually grown.

Use of data in predicting and analysing European IP outcomes does not have a long and illustrious track record.  The nascent Office for Harmonisation in the Internal Market [OHIM, now renamed the European Union Intellectual Property Office] was flooded by more Community trade mark applications than it could possibly handle that the world discovered that its staffing predictions were inexplicably based on earlier trade mark filings made under the Madrid Agreement, data that was neither suitable nor relevant to the task.  On the patent front, statistic-based predictions that Europe's cherished competitive industrial economy would vanish behind a fast-growing wall of patent thickets were similarly misleading.

A regular theme of this weblog is that insufficient use is made of the vast quantity of publicly available data relating to intellectual property rights. This theme usually points to failures on the part of investment analysts, academics and private sector businesses, rather to the need to take cognisance of them when formulating political, economic and fiscal policy.  This is not a Big Data issue; there's not so much data out there that projecting possible outcomes on to a relatively narrow topic like patenting and innovation protection requires vast quantities of computing power and skill.

It's not too late even now for CIPA and other IP bodies to put some real figures together. They are no guarantee of what two competing visions of the future will deliver, but at least the world can see the basis on which predictions are made and then decide, along with the UK populace, how to respond to the current uncertainties in a more meaningful manner.

Tuesday, 29 March 2016

Artificial intelligence comes into focus, but the picture's incomplete

"The Race Is On to Control Artificial Intelligence, and Tech’s Future", announced John Markoff and Steve Lohr last week in the New York Times, here. This absorbing piece explains that "Amazon, Google, IBM and Microsoft, are jockeying to become the go-to company for A.I. In the industry’s lingo, the companies are engaged in a “platform war"", a platform being a piece of software that other companies build on and that consumers cannot do without.  The article continues, in relevant part, interspersed with some comments:
" ... Microsoft dominated personal computers because its Windows software became the center of the consumer software world. Google has come to dominate the Internet through its ubiquitous search bar.

If true believers in A.I. are correct that this long-promised technology is ready for the mainstream, the company that controls A.I. could steer the tech industry for years to come. ...

In this fight — no doubt in its early stages — the big tech companies are engaged in tit-for-tat publicity stunts, circling the same start-ups that could provide the technology pieces they are missing and, perhaps most important, trying to hire the same brains. ...

At the University of Toronto, IBM pursued a start-up called Ross Intelligence that makes a smart legal assistant, and extended a free offer to use its A.I. software, called Watson. For IBM, the financial payoff would come if start-ups like Ross generated sales, followed by a revenue-sharing arrangement [opening up proprietary technology to all users rather than seeking to control it through restrictive licensing is not unknown in standard-seeking sectors. An analogous example is recorded in the 'videotape format war', related at length here] ...

By 2020, the market for machine learning applications will reach $40 billion, IDC, a market research firm, estimates. And 60 percent of those applications, the firm predicts, will run on the platform software of four companies — Amazon, Google, IBM and Microsoft [with no accompanying prediction of interoperability or compatibility, a market of this magnitude may be a magnet for increasingly heavy investment in the 'killer' software that will weaken or eliminate competing technologies]. ...

IBM is making the broadest entry into A.I. Its Watson unit, set up as a separate division in early 2014, is both a software and a services business, with technology tailored to specific industries. More than 80,000 developers have downloaded and tried out the software, and the Watson division has 500 industry partners, including big companies and start-ups [In a developing market where customers need some hand-holding, it makes sense to invest in relationships as well as in products]. ...

In 2015, Amazon and Microsoft both added machine learning capabilities to their cloud software platforms, Amazon Web Services and Microsoft Azure. The companies are using machine learning software to help customers spot patterns and make predictions in vast amounts of data [This could mark a major tipping point in industrial attitudes to "Big Data", as the increasing use of tailored AI demystifies the term, reduces the hype and turns today's novelty into tomorrow's routine]. ...

... To some, the rush to build platforms is taking place long before the technology has matured. ... Some start-ups, like Diffbot in Palo Alto, Calif., are willing to jump into the fray with industry giants under the assumption that there is still plenty to figure out [Jumping in at this stage may look foolhardy, but when so many prospective purchasers of AI products still understand so little about them and are working tolerably well with pre-AI structures, any business that enters the market with a listening ear, a perceptive eye and without the encumbrance of preconceived notions is bound to stand a chance of ,making a mark] ...”
This review is interesting, informative and thoughtful, but regular readers of this weblog may already have guessed what is missing from it.  There's no reference to patenting and intellectual property protection, which not only indicate which bits of AI are legally and commercially ring-fenced but also point to which players (and increasingly which countries) are likely to be controlling the destiny of this sector.  

It's not just ownership of intellectual property that needs a focus.  Its antithesis, competition and antitrust law, may also play a key role.  The moment we read of "a platform being a piece of software that other companies build on and that consumers cannot do without", we might start thinking about "essential facilities doctrine", a legal doctrine of somewhat uncertain application and which ideally prevents a business that controls such a facility from precluding all competition or at least waters its control down to the status of a mere rent-collector on competing businesses' use of its essential facility.  In a market that is predicted to gain a $40 billion price-tag within four years, the cost of a spot of IP analytics is trivial and its potential benefit immense.

Wednesday, 23 March 2016

White goods in the grey area: is there (still) a connected appliance ecosystem war?

A strong IP portfolio can
open the door to great things
Readers of this weblog will need no reminder that white goods are no more immune from the information industry and environmental pressures than any other sector in which domestic appliances meet high-tech and the internet of things (IoT).  

The Aistemos report below, prepared with its Cipher analytics tool, takes a look at how these devices have changed, how they have been serviced by novel ecosystems, how far these developments have been protected by IP rights and, importantly, what might be the implication of these changes for competition. 
The Consumer Electronics Show (CES) is increasingly becoming not only about connected cars (for further details please see "Are Apple and Google just a bump in the road for the automotive industry?" here), but also about connected 'everything', including appliances and white goods. The smart fridge that knows when you have run out of milk and the washing machine that washes only when electricity is cheap are no longer things of the future. 
The showcase at CES 2016 highlighted a number of these innovations, including the much-hyped Samsung 'home hub' fridge, equipped with a massive touchscreen panel. However, some of these ideas had already been presented at previous CES shows as early as 2010 and 2011. There were many showcase pieces, especially from the Korean giants LG and Samsung. One major difference since then has been the continuous development and competition between ecosystems within this space and the now ubiquitous enabling effect of smartphones (eg, in automotive and fitness). 
CNBC observed that companies have now realised which connected home ecosystems will prevail, and thus can focus on producing specific products. The two most likely prevailing ecosystems are coming from Alphabet (Nest), Amazon (Dash) and Samsung (SmartThings). 
For this snapshot it is interesting to see whether there is indeed also a surge in patenting in this area. Products that have now been showcased for five to six years (at least as prototypes) should be at the heart of what companies are strategically trying to protect with intellectual property. Equally, there are a couple of 'new kids on the block', with latest entrants and strongest growing companies coming from Asia in the form of LG, Samsung, Beko and Haier. Finally, there is also the issue of ecosystems (as with most consumer technology areas), where Google and the like must be considered. 
The general trend is towards growth. On average, the number of granted patent families within connected appliances has increased by 142% over the last five years, and Figure 1 clearly shows that increase in filings over the last two five-year periods.

Source: Cipher
However, as seen in Figure 2, the companies have generally decreased their focus within this area, as the relative percentage of filings within connected appliances is lower. For the consumer electronics giants, this area is just a tiny portion of what they produce. The graph shows that only Whirlpool was really pushing this area between 2005-2009 where roughly every tenth application was within this space.

Source: Cipher
Figure 3 summarises the current patent standings, with only substantial pipelines being held by Bosch-Siemens and KOC (Beko). This could be another indication that the market is starting to become saturated in terms of patents.

Source: Cipher
One metric that is an interesting contrast to this apparent surge in applications within the space is conversion rates – that is, how many of the applications which companies file for end up with grants. Figure 4 paints a varied picture among the companies, looking at the percentage of applications that grant within five years and the percentage of applications that grant at all. While some companies do really well (eg, GE and Amazon at 100%), some appear to struggle, such as Bosch-Siemens, EGO and KOC (Beko). 
Two additional insights show a potential sign of patent saturation in a market (ie, harder to get grants), which seems unlikely, and initial indications of how inventive the various companies are.

The surge in new entrants can be seen when comparing the US market shares of major players in 2008 and 2013. In Figure 5 we can see that LG and especially Samsung have aggressively taken market shares from the incumbents; looking at connected appliance patenting (as a proxy for 'new innovation' in that time), all have increased their portfolios substantially.

Source: Cipher, Statista
With this change in market shares, the growth of Asian players and the annual growth of connected smart appliances expected to be 30% year-on-year until 2022 (driven by North America and Asia), it would be expected for companies to have global profiles. 
Figure 6 paints a slightly different picture though, as only LG and Samsung appear to have the strongest global coverage (current families with grants).

Source: Cipher
Another typical aspect of a growing market is a tendency to attract patent infringement. Samsung and LG already attract a high number of patent suits with their large consumer electronics profiles (attracting 449 and 235 suits, respectively) and are heavily targeted by non-practising entities (NPEs) (77% and 71%, respectively). However, looking at the pure-play companies in Table 1 (eg, Miele, Whirlpool and Electrolux) the picture is different, with only a portion of suits coming from NPEs and a much larger threat posed by competitors.
Table 1: Appliance litigation

Total lawsuits as defendants
NPE lawsuits
The connected appliances space is crowded and new players are continuing to enter, with some appearing to prevail as winners. This examination of the IP situation appears to show a certain decline in new innovation, as most companies appear to be past their peak of innovation, which may indicate that the imminent pipeline of product is strong and we are on the verge of dramatic change in this space.
This item was first published as an IAM Industry Report here.

Tuesday, 22 March 2016

Jointly-owned IP rights: best avoided

It's good to collaborate, but
make sure the resultant IP
is not held jointly
"Avoid jointly owned IP like the plague" is the message of our occasional guest contributor Donal O’Connell (Chawton Innovation Services Ltd).   Jointly-owned rights may be the fruit of both inter-company and intra-company collaboration, often where research has been driven by interdisciplinary considerations.  They can however be problematic when dealing with assignments and licences and when tackling due diligence. This is what Donal has to say on the topic:
Not all the smart people work for you

Traditionally, internal innovation was the paradigm in which most companies operated. Most innovating companies kept their discoveries highly secret and made no attempt to assimilate information from outside their own R&D labs. This was driven by the belief that "the smart people in our field work for us". However, in recent years the world has seen major advances in technology and society, changes which have facilitated the diffusion of information. Companies have also come to realise that "not all the smart people work for us, and that we need to work with smart people inside and outside our company".

Various forms of collaborative innovation

Collaborative innovation can take many forms, including working with universities, cooperating closely with key suppliers and vendors, collaborating with application developers, content providers, and technology and design houses. It may mean working with various communities including 'open’ communities, innovation networks and interoperability standardisation bodies, as well as customers and end-users. It can also involve working with start-ups and VC or Business Angel funded entities. Collaborative innovation can also vary in terms of the number of the actual parties involved, the nature of the research or type of development work in question, the actual technology classification, the funding model applied, timescales involved and the overall scope of the collaboration and cooperation.

Different types of collaboration partners

Collaborating with an external innovator might be thought to mean an equal partnership between two (or more) parties who are pursuing mutually interesting and beneficial R&D type work. Today, however, many collaboration projects involve parties from very different types of organisations and of very differing stature and funding status. External innovators collaborate in many ways and innovators may find themselves working together on a sponsored project. They may make equal contributions to the project or one may be leading the project whilst the other is providing expertise on a smaller or more narrowly defined aspect of the project. Interdisciplinary projects occur when innovators from different disciplines are involved in a project in which, for example, they are looking at a problem from different perspectives, or when a project involves a complex set of questions that cross disciplines. Sometimes innovators work separately and yet collaborate on a project. This can occur in a variety of ways, but most frequently it is when they are working on different aspects of the same project, but exchanging data between one another.

IP ownership

IP is generated during the innovation process, regardless of whether it is internal or collaborative in nature. Who then owns the IP created when cooperating and collaborating with an external party is a key issue which needs to be clearly defined for all parties concerned. This is usually defined in the IP terms and conditions section of the cooperation agreement. Ownership of the IP which arises as a result of the innovation is one of the most critical issue to resolve.

IP ownership in cooperation agreements

It is important that IP ownership is agreed in a cooperation agreement before any work takes place, although I accept that this is often not possible. At the very least, IP ownership should be discussed and agreed before any money has been expended on the IP creation process.

When a company pays for external innovative work to be conducted, it may reasonably expect to own any resulting IP, but this is not automatic. Most companies will typically seek to own all IP relevant to their business, but they need to accept that the other party may think the same. When a company cannot own the IP, it may seek exclusive rights for a negotiable period.

The rules of IP ownership can also vary according to different national laws, and it is therefore important to take this factor also into consideration.

Jointly owned IP perceived as the 'fair' solution

With more and more companies and organisations entering into these types of collaborative innovation projects, joint ventures, strategic alliances, etc., joint ownership of IP has become quite commonplace. The most common form of IP allocation in collaborative innovation projects is some form of joint ownership, because joint ownership is perceived to be a "fair" solution in situations involving multiple parties.

Jointly-owned IP may also be the “'easy” option, as it does not require in-depth discussion about how the IP should be divided out, plus it does not seem to give any advantage to one party over another. Unfortunately, joint ownership of IP is fraught with danger.

Jointly owned IP not so simple

Jointly developed IP may be defined as IP developed together by the two or more parties, where for example the list of inventors includes employees from both parties and where the parties share the cost and risk of the R&D work and its results.

Jointly owned IP may be defined as two or more parties having shared ownership and control of the very same IP. This may mean that a joint decision is required by all parties for practically any or all disposal of the IP. It may mean that any exploitation must be handled contractually for example, with written consent needed from one party for the other party to enforce its rights, with perhaps some limitations specified for the sub-licensing and/or licensing of rights and with an obligation to share license revenues. Challenges at each and every stage: Let us focus on one form of IP, namely patents, to illustrate these challenges. Jointly owned patents face challenges at each and every stage of the patenting process and differing business needs create different patent coverage needs. The drafting, filing and prosecution of a patent therefore becomes complicated and more expensive, and the end result may not be optimal for some or all of the parties involved. The licensing of jointly owned patents dilutes the value for both owners if a license is available from both owners. There is no effective means to grant a covenant not to sue or a non-assert.

The divestment of jointly owned patents also creates challenges. The value is diluted since it is only possible to transfer the owner’s share, not the entire rights. Also warranties typically require full ownership. When declaring essential patents for an interoperability standard, both owners must declare and commit to the same rules to make the declaration effective.

If involved in patent litigation, most countries require both owners as plaintiffs and without common interest to sue, the patent is basically worthless.

As far as business accounting is concerned, it may be a tough challenge to put the correct financial valuation of jointly owned IP onto the company's balance sheet.

For these reasons, I argue that it is advisable to avoid jointly owned IP.

US law regarding jointly owned IP

There are differences in IP law, or the interpretation of IP law, between jurisdictions. The "territorial" nature of IP refers to the fact that countries enact their own IP laws, typically by statute, and these IP laws have no application or force outside the country in which they are enacted.

A patent can be owned jointly if devised jointly by more than one person. As far as US patent law is concerned, the default rule is that each joint owner can utilise or exploit the patent without the permission of the other joint owners. Further, the exploiting joint owner has no responsibility to share royalty revenues with any other joint owner. However, to enforce the patent, all the joint owners must join in the law-suit. If one joint owner wishes to sue rather than license a third party, any other joint owner can terminate the law-suit by simply refusing to join in or by granting a license.

It is most important to realise that there are multiple regimes of intellectual property protection. The situation with joint ownership becomes even more complicated if multiple forms of IP are involved, each with differing default rules. For example, contrary to the US patent rule joint owners of a US copyright must share royalties. Almost all useful products are protected by multiple forms of IP such as patents, designs, trade marks and copyright. Such complexity arises for example when a software product that is covered by both patent and copyright is licensed by a joint owner. Joint owners would need to determine which percentage of the software product is exempt from royalty-sharing under US patent law and which percentage is subject to royalty sharing under US copyright law.

Chinese law

The Chinese Patent Law was first promulgated in 1984 and has since been amended twice, in 1992 and 2000. China passed the Third Amendment to the PRC Patent Law in 2008, becoming effective in 2009. One of the important changes in this amendment concerned joint ownership as the existing law did not address the rights of joint owners of patents. The new law now includes a provision that specifies the rights of joint owners of patents. It provides that unless otherwise agreed upon by joint owners, a joint owner is entitled to exploit the jointly owned patent alone or grant a non-exclusive license to a third party to exploit such patent, and any fees generated from such license must be shared among all joint owners. All other types of exploitation of a jointly-owned patent must be agreed upon by all joint owners. Therefore, under this new law, assigning or granting exclusive license to a jointly owned patent must be agreed upon by all joint owners of that patent.

UK law

In relation to UK patents, section 36 of the Patents Act 1977 addresses the rights of co-owners. It states that, subject to an agreement to the contrary, each co-owner has the right to exploit the patent itself but it must obtain the other owner’s consent: (a) to amend or revoke the patent; (b) to grant a licence under the patent; or (c) to assign or mortgage its share of the patent.

The issue of joint ownership of IP is therefore even more complicated when the same IP asset is protected in multiple jurisdictions because different countries have different laws on this subject matter. In addition, parties based in different countries, looking at joint ownership according to their individual national laws, may have entirely different expectations and/or experiences of what it means to be a joint owner.

Other approaches

There are a number of other, better approaches worth considering instead of agreeing to jointly owned IP. One party may own all of the IP generated as a result of the collaborative innovation and license it to the other party. The portfolio of IP created may be divided out between the parties, based on the vested interests of each party. If multiple parties are involved in the collaborative innovation, and there is a large portfolio of IP in existence, then a “patent pool” type arrangement may be considered, with an administrator appointed. Or the IP portfolio may be divvied up between the parties to distribute the costs and provide coverage with cross licenses.

Final thoughts

Many business people and even experienced IP attorneys and practitioners lack the in-depth appreciation of what joint ownership really means in practice, but they accept it nonetheless because “it seems fair” or "it has always been done that way." In reality, joint ownership of IP is fraught with danger and contrary to common perception, it is often unfair and, even worse, is usually unworkable.

Personally, I would recommend to avoid jointly owned IP like the plague. If the parties do decide that joint ownership is the best solution, then the most important thing to remember is that the agreement between the parties should set out in detail the worldwide rights and obligations of all of the parties involved in relation to the jointly owned IP. Joint ownership should never be seen as the “easy option”.

Monday, 21 March 2016

Entrepreneurship as organizing

Entrepreneurship as Organizing: Selected Papers of William B. Gartner, as its title suggests, is a "greatest hits" compilation drawn from the oeuvre of William B. Gartner, Professor of Entrepreneurship and the Art of Innovation, Copenhagen Business School, Denmark and Professor of Entrepreneurship, California Lutheran University. 

According to the publishers:
This book draws together William B. Gartner’s key contributions to entrepreneurship research over the past 25 years. An original introduction by the author offers a comprehensive overview and analysis of his work as it pertains to the development of entrepreneurship as a scholarly field, and the articles demonstrate the many ways in which his research has explored entrepreneurship in relation to individuals, firms, environments, and processes.
This curious book contains all sorts of oddities, including poems, haikus and an Entrefesto. What it lacks, however, is an index and an informative, helpful contents list.  What this means is that, unless you are already familiar with the author's work and are looking for something you already know, the only way to find out what is in this 345 page book is to read it from cover to cover. 

Be that as it may, reputations do not grow on trees and Gartner has earned his, having written some abundantly stimulating material over his career. The creation of new ventures, the characteristics of emerging organizations and the language of opportunity are among the topics bundled together here in previously published articles which he has written either alone or in tandem with colleagues.  

A word of warning: if you were thinking of perusing this book in search of Gartner's comments and insights into that newest of new ventures, the unicorn, this is not the place to be looking.  The most recent formal contribution to this book was published in 2010, before the term "unicorn" was first deployed. 

You can access full details of this book from its website here.

Thursday, 17 March 2016

IP and the national economic climate: are we using the wrong barometer?

The World Intellectual Property Organization (WIPO) and national patent-granting offices publish annual reports that show, among other things, the quantity of patents applied for and granted. This data, which enables readers to draw comparisons between different countries as well as to contrast patent filing and grant activity of a single country over a period of years. On a more detailed level, we can also learn much about the identity and therefore the patenting activities of large corporations that either generate their own innovations or acquire them from others. Over the years, as national patent laws have come closer together following regional harmonisation (eg in the European Union) and the imposition of blanket norms (eg TRIPS), the temptation to make comparisons between countries and draw conclusions has grown since there is a more cogent basis for the comparison -- even though the patent law and practice of three vast and important jurisdictions, the United States, China and India, remains in many respects quite idiosyncratic and can undermine attempts at meaningful comparison.

The tendency to draw conclusions, based on the volume of patenting activity, that countries are lagging behind in innovative activity or are commercially stagnating is inevitably enhanced by the social media, where for example the results of some detailed discussion are distilled into a Tweet. The shocking news that country A is dropping behind country B in the Great Innovation Race is easy and instantly absorbed, but the link to the more circumscribed and qualified conclusions of a report's author may not receive that many clicks.

It is easy to overestimate the significance of patent data as an indicator of the technological or industrial health of a national economy, since patent filing is only one of a number of significant contributing factors. In the vast majority of countries more patents are sought and secured by foreign businesses than by domestic ones, and some countries depend for their stability and growth on sectors that are nowhere as patent-rich as, say, telecoms and information technology. Food production, tourism, financial services and natural resources are cases in point.

This point has been raised by European trade mark organisation MARQUES, which writes the following on its LinkedIn site:
It has become customary to use national patent-filing statistics as a proxy for the extent to which national economies are thriving, stagnating or declining. Thus for example, a high rate of patent applications in the US is seen as an indicator of strong economic growth, in contrast with, for example, Spain, Portugal, the UK or Italy.

Does anyone know why it should be patent filings rather than trade mark filings that are used for this purpose? After all, not all countries are industrial or manufacturing bases; some depend on tourism, financial services and other sectors that are relatively light in terms of patents. However, the extent to which branded goods are bought and sold does reflect the extent to which consumers and commerce have money to spend.
Do we then place too much importance on the gross statistics? Do we fail to look beyond them with sufficient care? In short, are we measuring the climate of economic growth and commercial activity by the wrong barometer?

Wednesday, 16 March 2016

Blockchain, data and intellectual property: the shape of things to come?

Be afraid. Be very afraid?
Nick Holmes, writing in this month's Internet Newsletter for Lawyers, touches a topic to which many readers of this weblog will be even more averse than the dreaded BEPS -- the new data buzzword "blockchain". In "What is the blockchain?" he writes:
A blockchain is literally a chain of blocks of data recording transactions, connected using digital, cryptographic signatures. Confusingly, blockchain technology is often referred to simply as “Blockchain” (with cap B) or as “the blockchain” (with the definite article prepended). No doubt this usage stems from its initially unique and most widely-known application as the technology behind Bitcoin which was the inspiration for subsequent implementations (which are sometimes known as altchains).

A blockchain is thus a form of database that can be equated with a traditional ledger, a term still used in the digital age to describe a record of accounting transactions. More widely, a ledger might describe a record of any sequence of transactions, such as land registrations or transfers of intellectual property.

The other central attribute of a blockchain database is that it is a distributed ledger, meaning that the ledger is not maintained by a central authority [such as a national or regional IP granting office] but is distributed amongst participants, such that each has access to the ledger whose copies are updated more or less in synchrony.
Holmes then quotes "Ledgers and Law in the Blockchain", posted on King's College Cambridge's King's Review, in which authors Quinn DuPont and Bill Maurer say:
“the key characteristics of a blockchain that make it a special kind of ledger and that are particularly appealing to developers and proponents are that it is: distributed, decentralized, public or transparent, time-stamped, persistent, and verifiable [thus addressing issues that led to the establishment last summer of the ORoPO open register of patent ownership].”
Impressive fuel has been added to the fire. Holmes notes that the UK Government Chief Scientist Sir Mark Walport, in a report published in January, set out his thinking on how this technology could transform the delivery of public services and boost productivity. According to Sir Mark:
“Distributed ledger technology could provide government with new tools to reduce fraud, error and the cost of paper intensive processes. It also has the potential to provide new ways of assuring ownership and provenance for goods and intellectual property.”
Precisely how this will happen is probably beyond the technical capacity of many of this blog's readers (as well as its writers) to appreciate. Nonetheless the point at which these predictions become fact will have huge repercussions for IP due diligence, transactions, warranties of title, IP analytics and probably a good deal more besides.  

This weblog will keep an eye on IP-related blockchain developments. Meanwhile, readers' thoughts and observations are very much welcome.

Tuesday, 15 March 2016

Aistemos LinkedIn IP Discussions: do join in!

The Aistemos LinkedIn Group, which has now grown to more than 300 members, has recently offered four more discussion topics in addition to those featured in earlier blogposts. Our most recent discussion topics look like this: 
* Whatever happened to patent trolls? Recent IPKat blogposts by Mike Mireles and Neil Wilkof featured myth, metaphor and the apparent decline of the patent troll (an emotive term for what is more appropriately termed a 'non-practising entity', or NPE) in the current agenda for patent law reform. Was the phenomenon of the troll merely the product of hype, or is there more to it?
* IP taxation and BEPS: a taste of things to come. Aistemos is hosting a roundtable on 23 March on the taxation of intellectual property, taking a look at the new and little-understood base erosion and profit-shifting (BEPS) regime as it affects IP-rich sectors. Judging by the Twittersphere and the social media in general, this is a topic that businesses seem quite content to ignore or avoid. Why?
* IP analytics and strategy: new publications. Over the past few months the Aistemos weblog has carried reviews of several new books that either cover or ought to cover matters of concern to the segment of the IP community that deals with analytics, strategy, investment and the like. If any member of the LinkedIn Group has recently published a book, or is shortly going to do so, please let us know so that we can take a look at it and report on what we see.
* Trolling in Europe and corporate cosmetics. We commented on an article by John-Paul Rooney (Withers & Rogers) on the risk of legitimate non-practising entities being mistaken for patent trolls under the EU's forthcoming unitary patent and unified patent scheme. Our comment generated many responses. In particular, it was asked whether there is even any risk of patent trolls in the new EU patent regime, given the structural, legal and economic differences between the EU and the troll-friendly US. Do please let us know what you think. 
The Aistemos LinkedIn Group is a serious and responsibly moderated LinkedIn Group which welcomes discussion and debate. Do join and feel welcome to share your thoughts and opinions with us. 

If you like what you see, why not sign up to receive Aistemos blogposts by email? Just enter your address in the facility at the top of our blog's home page sidebar.

Wednesday, 9 March 2016

IP taxation and BEPS: what's in store?

Three weeks or so ago ("When no opportunity for misunderstanding is missed: the case of IP taxation", here), this weblog flagged a forthcoming roundtable on 23 March on the taxation of intellectual property, an event that is both topical and relevant as businesses address the new and little-understood base erosion and profit-shifting (BEPS) regime. Backed by the OECD, BEPS is seen by the European Commission as a key element in its fight to combat corporate tax avoidance on an EU-wide basis. 

Ahead of this month's event, here's a thought-taster in the form of a brief exchange between Aistemos CEO Nigel Swycher and members of the roundtable's expert panel Paul Morton (Head of Tax, RELX), Kelvin King (Valuation Consulting) and Dominic Robertson (Tax Partner, Slaughter and May):

Nigel: What do you think is the greatest challenge is when it comes to the taxation of intangibles and intellectual property?

Dominic: In many cases, the biggest difficulty lies in defining what counts as an intangible. Is a brand, for example, a single intangible or a series of related intellectual property rights, where the value of the sum of the parts is much less than the value of the whole?

Paul: It is increasingly difficult to identify where intangibles should be regarded as owned. In more and more cases, intangibles are the result of cross-border collaboration.

Nigel: So, apart from not being able to define or locate intangibles, it sounds like we are off to a good start. Will the latest OECD and other reforms make things better or worse?

Paul: Worse. The BEPS project has given some credibility to many new ideas about taxing the digital economy!

Dominic: I agree - the move from allocating value based on contract to allocations based on the location of “significant people” is understandable, but creates much more scope for disputes. 
Kelvin: Better. IP tax valuation principles have always acknowledged subjectivity and need to put your case for negotiation. At least OECD have moved us away from the farcical exemplars of market, comparability and worse, previous practice as bearing a relationship to the required arm’s length price determination which will now be based on valuation techniques. 
Nigel: Oh dear. Why do you think international tax issues generate so much controversy?

Paul: International tax is quite hard to understand because it is rooted in businesses which are increasingly complex and diffused. It is easy to express simplistic ideas about fairness and much harder to articulate the real underlying issues and problems. There are no simple answers!

Dominic: No country will ever believe that a multinational is paying it too much tax. And, in an age of budget austerity, raising more tax from companies (which obviously don’t vote) will always be popular. 
Kelvin: Tax authorities have become more aggressive with some countries also introducing criminal penalties. Transfer Pricing compliance reviews in multinationals must regularly review for impairment and now focus globally not country by country. That is complex, costly and burdensome. 
Nigel: Sounds like things may get harder before they get easier. I look forward to continuing the discussion on 23 March.
The roundtable is sufficiently spacious to accommodate a few more dedicated souls. Those who carry the burden of responsibility for corporate tax strategy are particularly welcome.

For further details click here.

Tuesday, 8 March 2016

Academic entrepreneurship: translating discoveries to the marketplace

Academic Entrepreneurship: Translating Discoveries to the Marketplace is the third title published in the Johns Hopkins University series on Entrepreneurship. Like the two earlier titles, this one is edited by Phillip H. Phan who unsurprisingly turns out to be not only the series editor but also the Alonzo and Virginia Decker Professor of Strategy and Entrepreneurship at Johns Hopkins University. The series is published by the increasingly imaginative and ambitious Anglo-American team at Edward Elgar Publishing, who have this to say about it in their web-blurb:
Academic entrepreneurship is a multifactorial and multidimensional phenomenon. This book presents research featuring aspects of academic entrepreneurship at the regional, institutional, and organizational levels of analysis. Phillip H. Phan and the authors illustrate that the more interesting aspects of this subject are in the ‘tails of the distribution,’ where counter-intuitive findings from the data call simple theories into question and inspire a vigorous discussion of alternatives.

This edited collection covers a variety of topics including, but not limited to
• corporate governance of innovation
• technology commercialization in pharmaceuticals and life sciences
• institutional impediments to technology development and economic growth
• economic impact of universities
• academic labor markets and technology commercialization
• translational research and development
• technology commercialization in regenerative medicine.
The contributors also consider the relative value of general versus specific human capital development and the implications for entrepreneurship and wealth creation.
As the publishers make clear, this is not a how-to-do-it book for academics who have managed to secure the IP rights and hope to launch their own businesses.  Rather, the intended readership is identified as "PhD students, new scholars in technology commercialization research, university technology transfer office personnel, economic development specialists and policymakers, and students studying the management of technology".   

While the thrust of the book is strongly US-flavoured (a significant element of its core is shaped by the College of Business Administration, University of Pittsburgh), its content is by no means parochial, with contributors from France, Italy, Scotland, South Korea and Spain.  While, as is still normally the case, there is no deep discussion of the use of IP data, record-keeping, due diligence or patent analytics -- these presumably falling beneath the radar as being of too practical for a theoretical appraisal of this nature -- there is some mention of technology transfer, international licensing, innovation, patents and R&D.  

Regular readers of this weblog will note the case study relating to the development and commercialisation of the Smart Kitchen.  This shows admirable attention to researching the scale and nature of potential customers, but it would have been good to know about how potential competitors or collaborators were spotted. 

You can get more information about this title, and order it as a hardback or e-book from the publisher's website here

Monday, 7 March 2016

Dirty data: hands-on guidance for the IP community

This weblog is pleased to host another guest contribution from Donal O’Connell (Chawton Innovation Services Ltd). Donal, who is also a consultant to Aistemos, has been giving thought to what he calls "dirty data" and its implications for businesses, strategists, advisers and investors in te field of intellectual property.  This is what he writes:
Dirty IP Data 
Intellectual property rights are valuable assets for any business, possibly among the most important that it possesses. It is therefore imperative that the associated IP data is also treated with the respect that it deserves.

Data integrity is data that has a complete or whole structure. All characteristics of the data including business rules, rules for how pieces of data relate to each other, dates, definitions and lineage must be correct for data to be complete. This paper explores the issue of problems with data integrity within an IP data management system, and applies equally to systems that reside within either a corporate environment or private practice.

IP data that has integrity is identically maintained during any operation on the IP System, such as data entry, data transfer, storage or retrieval. Put in simple business terms, IP data integrity is the assurance that the IP data is consistent, certified and can be reconciled. Dirty data refers to the lack of data integrity to one degree or another. 'Dirty data' is a term used by information technology professionals when referring to inaccurate information or data, and this term 'dirty data' will be utilised throughout this post.

The definition of 'dirty data'

Dirty data can have a variety of meanings:
• Missing data
• Incorrect data, wrongly entered to the tool
• Incorrectly formatted data
• Data entered into the wrong field
• Stale data, that was once correct but is now out of date
• Missing links such as the relationship between the data in two or more fields
• Duplicated data, where the data exists in more than one place
All of the above are valid and these examples qualify as dirty data. To summarise, dirty data can be incorrect, lacking in basic/general formatting, incorrectly spelled or punctuated, entered into the wrong field or duplicated, all of which will make the data generally misleading.

The root causes which lead to data becoming dirty 
There are a number of possible root causes of dirty data:
• Migration errors
• Data entry errors
• System design errors
• Synchronisation problems
• Data reporting problems
• Maintenance problems 
Migration is where data is transferred into an IP system from another systems, perhaps as a result of a system upgrade or as a result of M&A activity, where data has been transferred and incorporated from an external IP system. If the data is dirty before the migration, it is likely to remain dirty after the migration unless concrete steps have been taken to address the problem.

Data entry mistakes can be made by IP personnel within the organisation, by non-IP personnel within the organisation who are given access to the IP system and by external IP personnel who have been provided with access to the IP system. A certain amount of human error is inevitable, but what is the solution when the mistakes are constantly occurring, the fix would make an auditor cringe and the person or persons making the errors are taking zero responsibility, while blaming it all on the system?

IP system design and implementation errors can lead to dirty data. However, good system design can for example help to greatly reduce data entry errors, by focusing on such issues as catching exceptions, formatting, buffering and the way in which choices and selections are provided to the user.

Synchronisation, in this instance, is the maintenance of one operation in the IP System, in step with another step in another system to ensure overall data integrity. 
Synchronisation challenges with other company systems can lead to problems with the data as it is not uncommon for the corporate IP System to be linked electronically with other corporate systems in the company, used for example by HR or Finance. Combine this with systems possibly belonging to an IP Renewals/Annuities Payment provider and/or belonging to an IP Agent network and your synchronisation challenges can be even greater.

Creating reports using the data can itself present the problem of dirty data within the actual reports, if there are errors with the scripts or problems with the reporting functionality of the system. It can also be due to lack of understanding of the data structure within the system. The data within the IP data management system may not be being properly maintained. If data within the system is not being updated on a regular basis, as it should be, this can lead to dirty data problems within the system.

I should add another dimension related to maintenance. When reviewing and cleaning data from the jurisdictional IP databases (USPTO, EPO, etc.) certain dirty data issues may be identified, and the information contained in the jurisdictional data bases may be inconsistent with what a company's IP function or what an IP firm believes. For example, a maintenance payment may have been missed and the patent subsequently may not have been renewed.

More importantly, the patent may have been purchased but not re-assigned or assigned for security interest to a bank but not updated in the jurisdictional data.

So, there are several causes of dirty data. 
Where is the 'dirty data'? 
Dirty data can exist in the data fields associated with any of the key IP process areas such as IP creation, IP portfolio management, IP enforcement, IP exploitation and IP risk management. 
Problems can be linked to data fields used in the front end, for example in the patent creation process from inventor and invention report, through to Patent Committee or Patent Board decisions. Problems can also exist in the data fields used in the actual patenting process from drafting, to first filing, or foreign filing and through prosecution through to granted patent.

Dirty data can also occur in the IP portfolio management process in data fields used during management the IP assets, and in the IP utilisation phase in data fields used in licence agreements and contracts.

Dirty data can occur with any form of IP from patents, trade marks, copyright, designs, trade secrets, etc.

Why is 'dirty data' an issue for IP?

If it exists, then dirty data is a serious issue for any corporate IP Department or any IP Agency as it can lead to liability issues or a loss of rights. The 'rules' may not run for example for the proper creation of patent families, key dates may be missed or the wrong data may be sent to the IP Office. Correspondence may be sent to the wrong person or IP reports with incorrect data may be created and used in the decision making process. IP data is ultimately used for IP management purposes and will be utilised for well informed decision making. Dirty data may lead to the wrong decisions being made.

Why is 'dirty data' an issue outside of IP?

IP data is utilised not just by the IP department and IP data is most important in business, as far as technologies, products and services are concerned as it forms an integral part of many legal agreements and contracts. IP data is more frequently being reported to, and utilised by, Senior Management within the Corporation so 'dirty data' in IP can adversely impact activities and decision making outside of the corporate IP dept.

Cleaning up the data

Firstly, some understanding is needed of how serious the problem is with 'dirty data'. Questions to ask include how and why it has occurred and where is it happening? If the challenge with dirty data is large, then what is the prioritisation? Only when all the previous questions have been considered should the clean-up exercise be undertaken. Cleaning the data may involve using dedicated IP Service Providers and/or developing some automatic scripts and tools. It will almost definitely involve some manual hard work.

A three stage process is strongly recommended:
• Corrective actions to fix any problems
• Understanding of the root cause
• Preventative actions to stop problems repeating (processes, systems, education, checks)
'Dirty data' cannot be tackled in isolation

Data quality issues cannot be tackled in isolation. Data quality is interlinked with the IP processes or ways of working which are adopted in the company, the IP systems and tools in use, various legal matters and of course the actual people involved. Last but not least it involves management and leadership.

Best practices

A number of best practices exist to help address dirty data issues within an IP System:
• Control the data entry
• Define mandatory and optional data fields properly
• Assign rights and roles both for IP and non IP personnel with access to the system
• Assign personal responsibility
• Keep a change history
• Design 'intelligent' data fields
• Use tools to measure and clean the data on a regular basis
• Make data management a living process
• Measure, measure, measure.
The best approach is to make data quality management an on-going process and an integral part of IP management within the organisation.


To address dirty data problems properly within an IP system, it is important to adopt a recognised iterative four step problem solving process. 'Plan, Do, Check, Act'.

This first step is to evaluate and analyse the problem thoroughly and decide if, what, where and how dirty data is a problem and what needs to be done to rectify the situation. The second step involves making the necessary improvements, often on a small scale initially. The third step involves checking the situation and comparing actual results versus planned results. The final step is to analyse the differences to determine their causes.

When your dirty data challenge has been addressed, it is most important not to just forget the problem and move onto the next issue. Metrics should be defined, agreed and implemented and regular data reports created so that you know precisely the situation with your data integrity going forward and so that you can react quickly if things go amiss again in the future.

As stated at the beginning of this post, rights are valuable assets for any business, possibly among the most important it possesses. It is therefore imperative that the associated IP data is also treated with the respect that it deserves, and that any dirty data challenges are tackled and resolved.
As a footnote, Aistemos reminds readers of its continued support for the ORoPO project, which seeks to promote the importance of an open register of accurate and reliable patent ownership records.  For information concerning ORoPO and earlier Aistemos blogposts on this subject, just click here.