Sunday, 30 October 2016

Examining Industry 4.0 through the lens of patents

As the golden leaves of autumn flutter down from the trees, we are pleased to announce the first of this winter's Aistemos webinars. It's called "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".
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 [still to be announced: watch this space!] 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 here.

For more on Industry 4.0, see "Swayed in Sweden? Making the case for Industry 4.0", here.

Tuesday, 25 October 2016

IIPCC: the debate shifts to the Asia-Pacific

Another day, another organisation, another event?  It sometimes feels like that in the world of intellectual property.  Four decades ago, IP was no more than a recondite niche, apparently inhabited solely by nerds and specialists.  Now things are very different: the former niche has become a major category of business activity and legal practice, within which patents, trade secrets, trade marks, designs, copyright, plant variety and utility model protection are themselves specialist subjects with global application.

This change is, sadly, visible mainly from the inside.  To outsiders, even in the fields of investment advice and market analysis, nothing has changed: IP is all too often just an add-on, an optional extra when it comes to weighing up the criteria on which innovations are supported, markets entered, assets securitised or mergers and acquisitions contemplated.  Many have failed to recognise that IP is the tail that wags the dog.

So let us welcome the International IP Commercialization Council (IIPCC), the latest in a succession of private-sector international bodies concerned with spreading the word about IP and with making better use of it.  The IIPCC's Conference, "Entrepreneurship, Innovation and Patenting in the US", opens tomorrow at HP's global HQ in Palo Alto.  The conference programme itself may have little to mark it out as being different from others on the same topic -- some of the speakers have been around the block quite a few times already and are better known for repeating familiar themes than for springing surprises -- but the organisation itself has a refreshing dimension to it. Take a look at the IIPCC's website and you will see that all 13 of the organisation's constituent chapters are located in the Asia-Pacific. 

It can be argued that, when it comes to topics like protectable subject-matter, infringement, invalidity and the like, as well as the mechanics of international cooperation in terms of examination and grant, there's not so much to discuss any more: are we not at the stage of fine-tuning?  But when it comes to commercialisation, the debate has yet to run its course and the Asia-Pacific contribution, particularly from imaginative minds in Singapore and Hong Kong, is particularly welcome. The Aistemos blog team looks forward to hearing it.

Sunday, 23 October 2016

Here comes the Rational Think Tank: what will it think of IP?

There's a new blog on the block, with the promising name The Rational Think Tank (subtitled "Behavioural Insights for Law and Business"). It's not an intellectual property blog, but it appears to be a sub-entity of the Bucerius Law School -- the first private law school to be established in Germany and an organisation that has put on some imaginative intellectual property-based programmes since its foundation in 2000. It is highly probable that this new blog will focus substantially on IP issues, given that the sole named member of its Advisory Board is an intellectual property man -- German lawyer Christian Tenkhoff, a contributor to the MARQUES Class 46 blog who is pursuing research into behavioural economics at the London School of Economics.

There's nothing on the Rational Think Tank blog yet, so Aistemos is happy to make some suggestions here as to topics that any review of "Behavioural Insights for Law and Business" should be discussing:
* The apparent reluctance of business and finance experts to make use of freely available intellectual property data and value-added IP analytics when giving strategic marketing and investment advice to clients; 
* The role played by due diligence in IP-based deals, particularly when initial terms require amendment in light of adverse due diligence findings; 
* A comparison of the commercial behaviour of players in standards-based high tech product markets, depending on the extent to which they depend on offering or accepting licences on FRAND-based terms; 
* The manner in which the extent and strength of IP assets is factored into merger and acquisition decisions, given the existence of other considerations (eg corporate liquidity and cash flow, current market share, human capital, synergies with other ); 
* The psychological aspect of factors and events that may influence investment decisions to an irrational extent, such as the fact that a company is a so-called Unicorn, or the outcome of patent litigation involving a target company or a third party. 
So good luck, Rational Think Tank! This blog has long called for a more rational approach to IP-based decision-making and hopes that an infusion of good ideas for achieving this will not be long in arriving.

Thursday, 13 October 2016

Improving patent examination: should we aim for an ideal system or just patch up what we have?

The U.S. Government Accountability Office (GAO) takes the occasional look at intellectual property, and last month published a short report with a title that reflected its conclusions: "Patent Office Has Opportunities to Further Improve Application Review and Patent Quality".  The summary of this 29-page paper states, in relevant part, as follows:
" ...USPTO examiners face a variety of challenges in reviewing patent applications and issuing high quality patents. Some challenges affect examiners' ability to complete a thorough review of information relevant to a claimed invention—or a “prior art” search—which is the most time consuming aspect of examining a patent application [while the report appears to view this from the examiner's standpoint, it can be equally true for the applicant, whose tortuous and obscure claim-drafting may be as much dictated by the need to weave round prior art as by any other cause]. For example, the amount and availability of prior art as well as the extent to which examiners are able to search prior art quickly using the search tools USPTO provides may present a challenge to examiners in reviewing patent applications [availability will be a problem for as long as an 18-month time-lag exists between the application date and the date of publication, though good training, use of existing tools and development of new ones will be able to improve things].  ...

USPTO is taking steps to address the challenges examiners face in reviewing applications and issuing high quality patents—most notably through the agency's Enhanced Patent Quality Initiative [this is another Summer 2016 project: see here]—but some steps have limitations and opportunities exist for further improvement. For example,
  • USPTO is taking steps to strengthen monitoring of examiners' work. However, USPTO still faces limitations in assessing patent quality overall, including the thoroughness of examiners' prior art searches, because, for example, USPTO has not established a consistent definition of patent quality or guidance on what constitutes a thorough prior art search for different technologies [the consistent definition is less important in the short run than a recognition that different technologies make different demands, and also that mature technologies pose different challenges to green-field ones]. Additionally, while USPTO has an overall strategic goal that includes optimizing patent quality, the agency has not developed specific goals and performance indicators related to patent quality and prior art search improvement. Without consistently and clearly defining patent quality and a thorough prior art search, and establishing goals and performance indicators to monitor examiners' work, USPTO will be unable to fully measure progress toward meeting its patent quality strategic goal consistent with internal control standards and leading practices for federal agencies [but 'patent quality' -- if it exists -- is such a Protean concept, particularly when viewed from outside the USPTO from the perspective of the owner, the investor, the industrial competitor or the licensee that one wonders if it wouldn't be better to concentrate on efficiencies on a de facto basis and ignore 'patent quality'. It's also worth pointing out that part of the examiner's task is to reject applications and that, if an examiner's output consists of 100% perfect gold-standard patents, he or she may be rejecting plenty of not-so-perfect but still valid ones]. 
  • USPTO has not comprehensively assessed the time examiners need to perform high quality patent examinations, including thorough prior art searches, and has not fully assessed the effects of other agency incentive policies on patent quality. For instance, USPTO recently adjusted the time allotted to examiners for reviewing applications in some technologies, but has not recently assessed the time needed for a thorough examination in all technology areas [we can't blame the USPTO here, since there is no simple equation that matches a specific technology to an allocation of time]. GAO estimates, based on its survey, that 70 percent of patent examiners say they do not have enough time to complete a thorough examination given a typical workload [naturally, since if most examiners said they had enough time they would suspect a shortening of this time in the name of operational efficiency, thus increasing workloads and stress]. Additionally, most stakeholders GAO interviewed said that the time pressures examiners face is one of the central challenges to ensuring patent quality; however, USPTO has not analyzed the effects of its production-based incentive policies on patent quality. According to federal standards for internal control, operational success requires providing personnel with the right incentives for the job. Without comprehensively assessing the time needed to conduct a thorough examination or USPTO's current incentives, USPTO cannot be assured that its time allotments and incentives support the agency's patent quality goal [it's ironical that the GAO is looking for incentives that lie outside the patent system as a means of boosting the through-put of applications for patents -- which are themselves incentives].
... 
We all want an ideal world in which patents are a reliable indicator that something new has been properly divulged to the public in exchange for a limited-term exclusive right to control its use -- and it is plain to see that some patents should not have been granted at all, being obscure, lacking in subject matter or entirely covered by easily-discovered prior art.  We have a choice of seeking to define and aim at 'patent quality' or merely to rectify the mistakes that are made institutionally and by individual examiners and to seek to rectify them. In the fast-changing world of innovation protection and investment, can we be sure that the first approach is preferable to the second?

To access the full report, click here.

Monday, 10 October 2016

Can a commodity be reluctant to be commoditised? Early news of IP3

Back in May of this year, a good deal of attention was directed to the IP3 initiative -- officially called the Industry Patent Purchase Program -- which was designed to make the sale of patents swifter and simpler by imposing an arbitrary set of deal-making criteria [see, for example, the earlier Aistemos blogposts here and here].  Five months later, with a much smaller fanfare, the initial results of this transactional experiment have been published [for an excellent overview and some helpful factual material see Richard Lloyd's post on the IAM blog, here].

It would appear from the USPTO assignment database that so far just 78 US patents and applications have changed hands, a figure which may be disappointingly low, given IP3's aspiration to facilitate the sale of not merely individual patents but entire patent families.  That database cannot show how many IP owners had initially sought to sell their patents through IP3, but it may be conjectured that that number was not high, given (i) reluctance to be guinea-pigs for a hitherto-untested initiative, (ii) the short lead time for sellers to evaluate the relative advantages of taking the IP3 route, using other disposal methods or retaining the patents for other purposes, and (iii) criticism of the actual drafting of the IP3 scheme, as articulated by leading transaction experts such as Mark Anderson [here].

It is too early to draw long-term conclusions from these early-day dabblings in the creation and operation of markets for the disposal and acquisition of patents.  In the short term, all we can say is that patents are a sui generis asset class and little or nothing of relevance can be gleaned from the study of other, longer established asset classes. In short, patents are commodities but they are proving exceedingly hard to commoditise.

Wednesday, 5 October 2016

Patent Box: why so few take-ups?

A recent feature on the website of Startups ("The UK's No.1 service for starting a business") carried the alarming title "Small businesses not taking advantage of Patent Box relief", its theme being that, in 2013-4, the first year for which statistics have become available, only 700 claims for Patent Box tax relief were made by small and medium-sized businesses.

In percentage terms this adds up to just 4.6% of potential relief claims were lodged between 2013 and 2014 – the first year of statistics available.  According to this post:
" ... Patent Box expert Kari Campbell has revealed that only 700 claims made between 2013 and 2014 – the first year of available statistics – compared to over 10,000 claims made for research and development tax relief over the same period.

Surprisingly, firms from many sectors usually characterised as innovative such as the information & communication, financial & insurance and real estate (25) and the professional, scientific & technical (65) made only a small number of claims. Despite this, both sectors have high amounts of relief per claim at an average of £2.34m and £332,000 respectively.

Introduced to increase the development and level of patenting of intellectual property in the UK, businesses can pay a rate of corporation tax on any patent box profits earned after 1 April 2013 lower than the current 20% main rate.

Campbell commented: 
“Smaller businesses are often put off claiming tax relief available to them, particularly the Patent Box, due to the complexities of making the first claim and fears of getting it wrong. However, it should be emphasised that, despite recent negative press, the Patent Box is a government backed scheme designed to benefit those businesses within Britain who are making the effort to innovate products within the UK.”
While Campbell is right to point out that complexity is a deterrent factor when it comes to making Patent Box relief claims, there are a number of other reasons why the 4.6% figure is as low as it is, and they need not raise too much cause for alarm.

For one thing, not all R&D leads to the grant of a patent at all, let alone a profit-generating one. This is especially so in the relatively restrictive legal regime that governs the grant of patents for business methods, information presentation and computer software in Europe. This may help to account for the discrepancy between the number of Patent Box claims and those made for research and development tax relief.

To the complexity of the scheme we can add the factor that some patent owners may have been advised not to apply on the basis that they would not be eligible for it under the criteria for relief provision.

There was also quite a bit of uncertainty about the ambit of the UK Patent Box scheme as initially designed, since its legitimacy was challenged under EU rules. This too may have had a dampening influence on claims made during the period 2013-4.

However, the main culprit may well be a combination of ignorance of the provisions together with the low priority given to intellectual property issues in the first place,

It is good that the low level of applications has been flagged. Let's hope that, by reducing the level of complexity of the Patent Box and by raising awareness of its availability, this state of affairs can be changed.

Sunday, 2 October 2016

September's Aistemos blogposts: a handy summary

We say goodbye to September with happy memories of a busy month of which the star feature was our keynote "More value, less cost" webinar on IP due diligence [you can follow it in full, complete with visuals, here]. But IP diligence was far from the only topic on which we blogged. In keeping with our regular practice, here's a list of the previous month's substantive Aistemos blogposts, for your convenience if you have been away or simply too busy to follow them in real time.


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:


***   Wednesday, 28 September 2016   Swayed in Sweden? Making the case for Industry 4.0

Following the conclusion of this year's CIP Forum, Aistemos CEO Nigel Swycher, who was honoured to be one of the presenters in this prestigious invitation-only event, gives an insight into some of its features and offers some data on the growth and spread of patents for some relevant areas of Industry 4.0 (= Internet of Things) technology.

***   Sunday, 25 September 2016   More value, less cost: IP due diligence, unexpurgated

Earlier this month Aistemos held a webinar examining IP analytics in the context of due diligence and the savings that can be made in patent portfolio management when this task is carried out. This blogpost carries links to the recording of the webinar -- which lasts around half an hour -- as well as the accompanying PowerPoints.

***   Thursday, 22 September 2016   Wake up and smell the fertilizer? Big changes ahead for agribusiness

Agribusiness is big business for several reasons. Most obviously, there are over 7 billion people on this planet and they all consume food that someone, somewhere has grown.  Producing more food, better food and cheaper food is therefore a market that will likely continue for as long as the human race continues to exist.  This blogpost looks at the way the biggest players in this sector jostle for control, focusing on their patents.


***   Saturday, 17 September 2016   IP in Africa: a golden opportunity to make an impact?

Over 800 intellectual property books recently found their way to the Africa University, Zimbabwe.  This blogpost points out that educating our colleagues in Africa with regard to the benefits of IP analytics, as well as listening to what they have to say about their own problems and how to address them, is an ongoing project to which all can contribute.

***   Thursday, 15 September 2016   DSC disruption? Close shaves and cutting-edge patents

Developments in the lucrative male grooming market have caught the headlines for many reasons. However, little attention has been given to the spread of patents that lie beneath the surface of the literally cut-throat competition that drives technological progress in a market that is not only global but has the extra attraction of products that their users must regularly replace. Deploying the Cipher patent analytics tool, we take a look at some of the market's salient features.

***   Tuesday, 13 September 2016   Patent litigation and damages in the US: cause for migration?

The Final Report of the Berkeley Center for Law & Technology Patent Damages Workshop (UC Berkeley Public Law Research Paper No. 2823658) has been written up for publication in a forthcoming issue of the Texas Intellectual Property Law Journal. The Aistemos blogteam takes note of it and adds a couple of comments of its own.


***   Friday, 9 September 2016   Due diligence: so essential, so easily overlooked

"Due diligence is a critical tool when entering into an M&A transaction". So says Mark Scott, this being the title of a Smart Business article where he interviews Elizabeth G. Yeargin (Partner in Ohio law firm Brouse McDowell). This message is scarcely hot news, which is actually quite depressing. Due diligence is indeed a critical tool, not just for M&A transactions but for many other tasks -- but it is increasingly apparent that many people in the business world seem to forget it almost as quickly as they heard it.  It should not be any more necessary to tell corporate decision-makers that due diligence is a critical tool than to remind them to get dressed before going out to work, or to turn their cellphone on before trying to make a call -- a point which this blogpost strongly endorses.

***   Thursday, 8 September 2016   Cipher User Conference 2016: a rallying-point for IP analytics believers

We preview the October get-together of users of the Cipher IP analytics tool. 

***   Tuesday, 6 September 2016   The language of innovation: whose responsibility is it?

"When Innovation Meets the Language of the Corner Office", posted by Berkeley academic Dave Rochlin on the MIT Sloan Management Review [available here], asks a question on which many of us have pondered: "What are the best ways to tailor the language of innovation to the executive suite?"  This blogpost wonders whether too little is expected of C-suiters, who seem quite able to grasp more complex concepts than IP innovation when they are not at work.

***   Thursday, 1 September 2016   Putting a price on Copaxone: pharma patents at a premium?

"Teva Plunges After Two U.S. Copaxone Patents Invalidated", posted to Bloomberg by Susan Decker and Catherine Larkin, tells the tale of another stock price fluctuation in the wake of a patent invalidation decision. Whether the 3% drop in Teva's value constitutes a 'plunge' or something less dramatic -- or indeed whether a larger fall could have been expected, given Copaxone'spredicted level of contribution to Teva's profits -- are questions for debate between headline writers and financial analysts, but any movement in stock value that follows a legal ruling on the validity of an intellectual property right is a topic that attracts the attention of this weblog.

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