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Main article: Patent Law

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Topics from 1 to 10 | in all: 13

IP strategy: How should startups decide whether to file patents

17:03 | 3 July

Bryant Lee, Ed Steakley & Saleh Kaihani Contributor
Bryant Lee is the co-founder and managing partner of Cognition IP, a YC-backed IP law firm for startups. Ed Steakley was the Head of IP at Airware and Senior Patent Counsel at Apple. Saleh Kaihani is a partner at Cognition IP.

Deciding what to patent can be a confusing process but by creating a formal process it is something that every startup can manage.

Intellectual property (IP) is one of the most valuable assets of a startup and patents are often chief among IP in terms of value. Patents allow the startup to prevent competitors from using their technology, which is a powerful feature that can grant unique advantages in the marketplace.

From a business perspective, patents can help with driving investment and acquisitions, provide protection during partnerships and business deals, and help defend itself against patent lawsuits by others.

However, startups also often have a hard time determining when and what to patent. Innovative startups are inventing new things on a regular basis, and there is a danger of slipping into a haphazard approach of patenting whatever happens to be available rather than systematically analyzing the business needs of the company and protecting the IP that moves the needle the most.

Moreover, startups must balance the need to protect IP with other areas of the business: Patents are complex documents that require an investment of time and resources to obtain. They often require specialized legal counsel to write and a lengthy examination process at the U.S. Patent & Trademark Office (USPTO).

This article is a how-to guide for startups to make the decision on when and what to patent with a mature approach to IP strategy.

Table of Contents

Creating a regular IP harvesting process

Index 02

In order to make a decision about what to patent, a startup must first know what IP it has. For very small teams, it may be possible for everyone to have a shared idea of the IP. However, once teams grow beyond a few people, it is no longer possible to have complete visibility into what everyone on the team is doing and potentially inventing. Therefore, a regular IP harvesting process must be put in place to ensure proper reporting of IP to the executive level.

Most startups are best served with a simple IP harvesting process involving just three steps: (1) disclosure (2) invention review and (3) patent filing. In the disclosure stage, employees who are in IP creation roles must be trained to disclose ideas that are potentially protectable IP.

 


0

Startup Law A to Z: Regulatory Compliance

22:17 | 4 April

Startups are but one species in a complex regulatory and public policy ecosystem. This ecosystem is larger and more powerfully dynamic than many founders appreciate, with distinct yet overlapping laws at the federal, state and local/city levels, all set against a vast array of public and private interests. Where startup founders see opportunity for disruption in regulated markets, lawyers counsel prudence: regulations exist to promote certain strongly-held public policy objectives which (unlike your startup’s business model) carry the force of law.

Snapshot of the regulatory and public policy ecosystem. Image via Law Office of Daniel McKenzie

Although the canonical “ask forgiveness and not permission” approach taken by Airbnb and Uber circa 2009 might lead founders to conclude it is strategically acceptable to “move fast and break things” (including the law), don’t lose sight of the resulting lawsuits and enforcement actions. If you look closely at Airbnb and Uber today, each have devoted immense resources to building regulatory and policy teams, lobbying, public relations, defending lawsuits, while increasingly looking to work within the law rather than outside it – not to mention, in the case of Uber, a change in leadership as well.

Indeed, more recently, examples of founders and startups running into serious regulatory issues are commonplace: whether in healthcare, where CEO/Co-founder Conrad Parker was forced to resign from Zenefits and later fined approximately $500K; in the securities registration arena, where cryptocurrency startups Airfox and Paragon have each been fined $250K and further could be required to return to investors the millions raised through their respective ICOs; in the social media and privacy realm, where TikTok was recently fined $5.7 million for violating COPPA, or in the antitrust context, where tech giant Google is facing billions in fines from the EU.

Suffice it to say, regulation is not a low-stakes table game. In 2017 alone, according to Duff and Phelps, US financial regulators levied $24.4 billion in penalties against companies and another $621.3 million against individuals. Particularly in today’s highly competitive business landscape, even if your startup can financially absorb the fines for non-compliance, the additional stress and distraction for your team may still inflict serious injury, if not an outright death-blow.

The best way to avoid regulatory setbacks is to first understand relevant regulations and work to develop compliant policies and business practices from the beginning. This article represents a step in that direction, the fifth and final installment in Extra Crunch’s exclusive “Startup Law A to Z” series, following previous articles on corporate matters, intellectual property (IP), customer contracts and employment law.

Given the breadth of activities subject to regulation, however, and the many corresponding regulations across federal, state, and municipal levels, no analysis of any particular regulatory framework would be sufficiently complete here. Instead, the purpose of this article is to provide founders a 30,000-foot view across several dozen applicable laws in key regulatory areas, providing a “lay of the land” such that with some additional navigation and guidance, an optimal course may be charted.

The regulatory areas highlighted here include: (a) Taxes; (b) Securities; (c) Employment; (d) Privacy; (e) Antitrust; (f) Advertising, Commerce and Telecommunications; (g) Intellectual Property; (h) Financial Services and Insurance; and finally (i) Transportation, Health and Safety.

 


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Microsoft gives 500 patents to startups

13:00 | 28 March

Microsoft today announced a major expansion of its Azure IP Advantage program, which provides its Azure users with protection against patent trolls. This program now also provides customers who are building IoT solutions that connect to Azure with access to 10,000 patents to defend themselves against intellectual property lawsuits.

What’s maybe most interesting here, though, is that Microsoft is also donating 500 patents to startups in the LOT Network. This organization, which counts companies like Amazon, Facebook, Google, Microsoft, Netflix, SAP, Epic Games, Ford, GM, Lyft and Uber among its well over 150 members, is designed to protect companies against patent trolls by giving them access to a wide library of patents from its member companies and other sources.

“The LOT Network is really committed to helping address the proliferation of intellectual property losses, especially ones that are brought by non-practicing entities, or so-called trolls,” Microsoft  CVP and Deputy General Counsel Erich Andersen told me. 

This new program goes well beyond basic protection from patent trolls, though. Qualified startups who join the LOT Network can acquire Microsoft patents as part of their free membership and as Andresen stressed, the startups will own them outright. The LOT network will be able to provide its startup members with up to three patents from this collection.

There’s one additional requirement here, though: to qualify for getting the patents, these startups also have to meet a $1,000 per month Azure spend. As Andersen told me, though, they don’t have to make any kind of forward pledge. The company will simply look at a startup’s last three monthly Azure bills.

“We want to help the LOT Network grow its network of startups,” Andersen said. “To provide an incentive, we are going to provide these patents to them.” He noted that startups are obviously interested in getting access to patents as a foundation of their companies, but also to raise capital and to defend themselves against trolls.

The patents we’re talking about here cover a wide range of technologies as well as geographies. Andersen noted that we’re talking about U.S. patents as well as European and Chinese patents, for example.

“The idea is that these startups come from a diverse set of industry sectors,” he said. “The hope we have is that when they approach LOT, they’ll find patents among those 500 that are going to be interesting to basically almost any company that might want a foundational set of patents for their business.”

As for the extended Azure IP Advantage program, it’s worth noting that every Azure customer who spends more than $1,000 per month over the past three months and hasn’t filed a patent infringement lawsuit against another Azure customers in the last two years can automatically pick one of the patents in the program’s portfolio to protect itself against frivolous patent lawsuits from trolls (and that’s a different library of patents from the one Microsoft is donating to the LOT Network as part of the startup program).

As Andresen noted, the team looked at how it could enhance the IP program by focusing on a number of specific areas. Microsoft is obviously investing a lot into IoT, so extending the program to this area makes sense. “What we’re basically saying is that if the customer is using IoT technology — regardless of whether it’s Microsoft technology or not — and it’s connected to Azure, then we’re going to provide this patent pick right to help customers defend themselves against patent suits,” Andersen said.

In addition, for those who do choose to use Microsoft IoT technology across the board, Microsoft will provide indemnification, too.

Patent trolls have lately started acquiring IoT patents, so chances are they are getting ready to making use of them and that we’ll see quite a bit of patent litigation in this space in the future. “The early signs we’re seeing indicate that this is something that customers are going to care about in the future,” said Andersen.

 


0

It’s a draw in latest Qualcomm v Apple patent scores

12:54 | 27 March

It’s Qualcomm 1, Apple 1 in the latest instalment of the pair’s bitter patent bust-up — the litigious IP infringement claim saga that also combines a billion dollar royalties suit filed by Cupertino alleging the mobile chipmaker’s licensing terms are unfair.

Apple filed against Qualcomm on the latter front two years ago and the trial is due to kick off next month. But a U.S. federal court judge issued a bracing sharpener earlier this month, in the form of a preliminary ruling — finding Qualcomm owes Apple nearly $1BN in patent royalty rebate payments. So that courtroom looks like one to watch for sure.

Yesterday’s incremental, two-fold development in the overarching saga relates to patent charges filed by Qualcomm against Apple back in 2017, via complaints to the International Trade Commission (ITC) in which it sought to block U.S. imports of iPhones.

In an initial determination on one of these patent complaints published yesterday, an ITC administrative law judge found Apple violated one of Qualcomm’s patents — and recommended an import ban.

Though Apple could (and likely will) request a review of that non-binding decision.

Related: A different ITC judge found last year that Apple had violated another Qualcomm patent but did not order a ban on imports — on “public interest” grounds.

ITC staff also previously found no infringement of the very same patent, which likely bolsters the case for a review. (The patent in question, U.S. Patent No. 8,063,674, relates to “multiple supply-voltage power-up/down detectors”.)

Then, later yesterday, the ITC issued a final determination on a second Qualcomm v Apple patent complaint — finding no patent violations on the three claims that remained at issue (namely: U.S. Patent No. 9,535,490; U.S. Patent No. 8,698,558; and U.S. Patent No. 8,633,936), terminating its investigation.

Though Qualcomm has said it intends to appeal.

The mixed bag of developments sit in the relatively ‘minor battle’ category of this slow-motion high-tech global legal war (though the ITC’s final decision looks more significant), along with the outcome of a jury trial in San Diego earlier this month, which found in Qualcomm’s favor over some of the same patents the ITC cleared Apple of infringing.

Reuters reports the chipmaker has cited the contradictory outcome of the earlier jury trial as grounds to push for a “reconsideration” of the ITC’s decision.

“The Commission’s decision is inconsistent with the recent unanimous jury verdict finding infringement of the same patent after Apple abandoned its invalidity defense at the end of trial,” Qualcomm said in a statement. “We will seek reconsideration by the Commission in view of the jury verdict.”

Albeit, given the extreme complexities of chipset component patent suits it’s not really surprising a jury might reach a different outcome to an ITC judge.

In the other corner, Apple issued its now customary punchy response statement to the latest developments, swinging in with: “Qualcomm is using these cases to distract from having to answer for the real issues, their monopolistic business practices.”

Safe to say, the litigious saga continues.

Other notable (but still only partial) wins for Qualcomm include a court decision in China last year ordering a ban on iPhone sales in the market — which Apple filed an appeal to overturn. So no China iPhone ban yet.

And an injunction ordered by a court in Germany which forced Apple to briefly pull certain iPhone models from sale in its own stores in January. By February the models were back on its shelves — albeit now with Qualcomm not Intel chips inside.

But it’s not all been going Qualcomm’s way in Germany. Also in January, another court in the country dismissed a separate patent claim as groundless.

 


0

A long and winding road to new copyright legislation

17:30 | 3 November

Dave Davis Contributor
Dave Davis joined Copyright Clearance Center in 1994 and currently serves as a research analyst. He previously held directorships in both public libraries and corporate libraries and earned joint master’s degrees in Library and Information Sciences and Medieval European History from Catholic University of America.
More posts by this contributor

Back in May, as part of a settlement, Spotify agreed to pay more than $112 million to clean up some copyright problems. Even for a service with millions of users, that had to leave a mark. No one wants to be dragged into court all the time, not even bold, disruptive technology start-ups.

On October 11th, the President signed the Hatch-Goodlatte Music Modernization Act (the “Act”, or “MMA”). The MMA goes back, legislatively, to at least 2013, when Chairman Goodlatte (R-VA) announced that, as Chairman of the House Judiciary Committee, he planned to conduct a “comprehensive” review of issues in US copyright law. Ranking Member Jerry Nadler (D-NY) was also deeply involved in this process, as were Senators Hatch (R-UT) Leahy (D-VT), and Wyden (D-OR). But this legislation didn’t fall from the sky; far from it.

After many hearings, several “roadshow” panels around the country, and a couple of elections, in early 2018 Goodlatte announced his intent to move forward on addressing several looming issues in music copyright before his planned retirement from Congress at the end of his current term (January 2019).  With that deadline in place, the push was on, and through the spring and summer, the House Judiciary Committee and their colleagues in the Senate worked to complete the text of the legislation and move it through to process. By late September, the House and Senate versions had been reconciled and the bill moved to the President’s desk.

What’s all this about streaming?

As enacted, the Act instantiates several changes to music copyright in the US, especially as regards streaming music services. What does “streaming” refer to in this context? Basically, it occurs when a provider makes music available to listeners, over the internet, without creating a downloadable or storable copy: “Streaming differs from downloads in that no copy of the music is saved to your hard drive.”

“It’s all about the Benjamins.”

One part, by far the largest change in terms of money, provides that a new royalty regime be created for digital streaming of musical works, e.g. by services like Spotify and Apple Music. Pre-1972 recordings — and the creators involved in making them (including, for the first time, for audio engineers, studio mixers and record producers) — are also brought under this royalty umbrella.

These are significant, generally beneficial results for a piece of legislation. But to make this revenue bounty fully effective, a to-be-created licensing entity will have to be set up with the ability to first collect, and then distribute, the money. Think “ASCAP/BMI for streaming.” This new non-profit will be the first such “collective licensing” copyright organization set up in the US in quite some time.

Collective Licensing: It’s not “Money for Nothing”, right?

What do we mean by “collective licensing” in this context, and how will this new organization be created and organized to engage in it? Collective licensing is primarily an economically efficient mechanism for (A) gathering up monies due for certain uses of works under copyright– in this case, digital streaming of musical recordings, and (B) distributing the royalty checks back to the rights-holding parties ( e.g. recording artists, their estates in some cases, and record labels).  Generally speaking, in collective licensing:

 “…rights holders collect money that would otherwise be in tiny little bits that they could not afford to collect, and in that way they are able to protect their copyright rights. On the flip side, substantial users of lots of other people’s copyrighted materials are prepared to pay for it, as long as the transaction costs are not extreme.”

—Fred Haber, VP and Corporate Counsel, Copyright Clearance Center

The Act envisions the new organization as setting up and implementing a new, extensive —and, publicly accessible —database of musical works and the rights attached to them. Nothing quite like this is currently available, although resources like SONY’s Gracenote suggest a good start along those lines. After it is set up and the initial database has a sufficient number of records, the new collective licensing agency will then get down to the business of offering licenses:

“…a blanket statutory license administered by a nonprofit mechanical licensing collective. This collective will collect and distribute royalties, work to identify songs and their owners for payment, and maintain a comprehensive, publicly accessible database for music ownership information.”

— Regan A. Smith, General Counsel and Associate Register of Copyrights

(AP Photo) The Liverpool beat group The Beatles, with John Lennon, Paul McCartney, George Harrison and Ringo Starr, take it easy resting their feet on a table, during a break in rehearsals for the Royal variety show at the Prince of Wales Theater, London, England, November 4, 1963. (AP Photo)

You “Can’t Buy Me Love”, so who is all this going to benefit?

In theory, the listening public should be the primary beneficiary. More music available through digital streaming services means more exposure —and potentially more money —for recording artists. For students of music, the new database of recorded works and licenses will serve to clarify who is (or was) responsible for what. Another public benefit will be fewer actions on digital streaming issues clogging up the courts.

There’s an interesting wrinkle in the Act providing for the otherwise authorized use of “orphaned” musical works such that these can now be played in library or archival (i.e. non-profit) contexts. “Orphan works” are those which may still protected under copyright, but for which the legitimate rights holders are unknown, and, sometimes, undiscoverable. This is the first implementation of orphan works authorization in US copyright law.  Cultural services – like Open Culture – can look forward to being able to stream more musical works without incurring risk or hindrance (provided that the proper forms are filled out) and this implies that some great music is now more likely to find new audiences and thereby be preserved for posterity. Even the Electronic Frontier Foundation (EFF), generally no great fan of new copyright legislation, finds something to like in the Act.

In the land of copyright wonks, and in another line of infringement suits, this resolution of the copyright status of musical recordings released before 1972 seems, in my opinion, fair and workable. In order to accomplish that, the Act also had to address the matter of the duration of these new copyright protections, which is always (post-1998) a touchy subject:

  • For recordings first published before 1923, the additional time period ends on December 31, 2021.
  • For recordings created between 1923-1946, the additional time period is 5 years after the general 95-year term.
  • For recordings created between 1947-1956, the additional time period is 15 years after the general 95-year term.
  • For works first published between 1957-February 15, 1972 the additional time period ends on February 15, 2067.

(Source: US Copyright Office)

 (Photo by Theo Wargo/Getty Images for Live Nation)

Money (That’s What I Want – and lots and lots of listeners, too.)

For the digital music services themselves, this statutory or ‘blanket’ license arrangement should mean fewer infringement actions being brought; this might even help their prospects for investment and encourage  new and more innovative services to come into the mix.

“And, in The End…”

This new legislation, now the law of the land, extends the history of American copyright law in new and substantial ways. Its actual implementation is only now beginning. Although five years might seem like a lifetime in popular culture, in politics it amounts to several eons. And let’s not lose sight of the fact that the industry got over its perceived short-term self-interests enough, this time, to agree to support something that Congress could pass. That’s rare enough to take note of and applaud.

This law lacks perfection, as all laws do. The licensing regime it envisions will not satisfy everyone, but every constituent, every stakeholder, got something. From the perspective of right now, chances seem good that, a few years from now, the achievement of the Hatch-Goodlatte Music Modernization Act will be viewed as a net positive for creators of music, for the distributors of music, for scholars, fans of ‘open culture’, and for the listening public. In copyright, you can’t do better than that.

 


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What President Trump Doesn’t Know About ZTE

16:30 | 26 May

David Kline Contributor
David Kline is a journalist, author and intellectual property strategist.

After meeting with Chinese Vice Premiere Liu He this week, President Trump is still considering easing penalties on Chinese telecommunications giant ZTE over its violation of sanctions against Iran and North Korea. But what Mr. Trump may not realize is that ZTE is also one of the world’s most notorious intellectual property thieves — perhaps even the most notorious of all.

Since stopping Chinese theft of U.S intellectual property is one of the President’s most important trade objectives, Mr. Trump should refuse to ease sanctions against ZTE until it stops its high-tech banditry and starts playing by the rules in intellectual property (IP) matters.

To get a sense of just how egregious ZTE’s behavior truly is, we need only to consult PACER, the national index of federal court cases. A search of PACER reveals that in the U.S. alone, ZTE has been sued for patent infringement an astonishing 126 times just in the last five years. This number is even more shocking when you consider that only a subset of companies who believe their IP rights have been violated by ZTE has the means or the will to spend the millions of dollars needed to wage a multi-year lawsuit in federal courts.

But ZTE’s IP thievery is not confined just to the United States. According to one Chinese tech publication, ZTE has also been sued for patent infringement an additional 100 times in China, Germany, Norway, the Netherlands, India, France, the United Kingdom, Canada, Australia, and other countries. As an intellectual property renegade, ZTE certainly gets around.

Even when it’s not being sued, ZTE thumbs its nose at the traditional rules of fair play in intellectual proper matters, commonly engaging in delay, misrepresentation, and hold out when dealing with patent owners. While ZTE is more than happy to accept royalty payments for the use of its own intellectual property, it rarely if ever pays for the use of others’ IP.

Consider ZTE’s treatment of San Francisco-based Via Licensing Corp, a Swiss-neutral operator of patent pools covering wireless, digital audio, and other building-block components of complex products. Patent pools offer one-stop shopping for product makers to acquire licenses to patents from multiple innovative companies at once. Pools are generally a more efficient, and less litigious, way for product makers to acquire the IP rights they need at reasonable prices.

In 2012, ZTE joined Via’s LTE wireless patent pool, whose members also include Google, AT&T, Verizon, Siemens, China Mobile, and another Chinese tech powerhouse, Lenovo, maker of Motorola-branded smartphones. It helped set the royalty pricing of the pool’s aggregated patent rights, and even received payments from other product makers for their use of ZTE’s own patents within the pool.

But in 2017, precisely when it was ZTE’s turn to pay for its use of other members’ patents in Via’s LTE pool, it suddenly and without ceremony quit the patent pool. Via and its member companies are still trying to get ZTE to pay for its use of their intellectual property — and to abide by the very rules it helped establish in the first place.

Even among much-criticized Chinese companies, ZTE’s behavior is completely outside the norm. Despite what you may hear, some Chinese companies are actually good IP citizens — Lenovo for one. In fact, Via’s various patent pools include more than two dozen Chinese companies who play by the rules.

But ZTE is not one of them. It is a blatant serial IP violator who gives other Chinese companies a bad name. And our government should not reward such behavior.

Ease sanctions on ZTE only when it finally starts respecting intellectual property rights.

 


0

A peace plan to end the wireless wars

03:30 | 11 April

Boris Teksler Contributor
Boris Teksler is the former licensing chief at Apple and current chief executive of the patent licensing company Conversant IP.
Joe Silino Contributor
Joseph Siino is the former intellectual property chief at Yahoo and the current president of Via Licensing .
Ira Blumberg Contributor
Ira Blumberg is the vice president of IP at Lenovo .
More posts by this contributor

No one would have predicted that the three of us would ever find ourselves on the same side of the corporate patent wars, let alone speak with one voice about how to end them.

We have come together because we see that patent owners and product makers have become trapped in an endless cycle of demands, counter-demands, and unproductive litigation. Unless we find a way out of this conflict, we will almost certainly see a repeat of yesterday’s costly and wasteful smartphone wars in tomorrow’s wireless connected car sector.

Product makers accuse patent owners of threatening lawsuits and using the expense of the legal process in order to demand extortionate royalties for their patent rights. For their part, patent owners say product makers refuse to pay fair compensation for the patented wireless, audio, and video features that give their products value as communication and entertainment devices.

The truth is, both sides have a point. That’s because patent owners and product makers are caught in a classic “prisoner’s dilemma,” in which the lack of transparency and fair ground rules in patent licensing lead companies on each side of a patent dispute to try to game the other. This only ensures that both sides suffer a negative outcome in outrageously-expensive litigation.

Unlike in the real property business, in intellectual property (IP) licensing there is little or no independent appraisal of the assets (i.e., patents) or transparency as to how prices are determined. And because most patent license agreements are confidential, there is little or no information or “comps” on what others have paid for similar patent rights. Nor are there any widely-accepted ground rules for what constitutes fair negotiating practices between buyers and sellers.

This is especially true in regards to standards-essential wireless patents, which are supposed to be licensed on fair, reasonable, and non-discriminatory (FRAND) terms. But what’s fair or reasonable about the fact that an impossibly-large number of LTE (4G) cellular patents — more than 60,000, in fact — have been declared “standards essential” without any independent evaluation of those patents whatsoever?

That’s right, those 60,000-plus patents have all been self-declared “standards-essential” by companies each seeking their own commercial advantage. What you’ve got is a wireless gold rush — with plenty of fool’s gold posing as real gold.

So the three of us, working with industry leaders on both sides of the patent owner vs. product maker divide, have developed a three-pronged plan for ending the wireless patent wars and creating a more productive and less litigious patent licensing sector.

First, whittle down this ridiculous mountain of self-interested wireless patent claims to the fewer than 2,000 patent families that most experts believe are truly essential to smartphone handset makers. We can do this by excluding duplicative patents, expired patents, patents not in force in major economic markets, and patents for base station, infrastructure, and other innovations not relevant to handset makers. Independent, neutral evaluators will then confirm each patent’s relevance to the LTE standard for handsets.

Second, base royalty prices not on the subjectively-argued value of each individual patent examined in a vacuum, but on the objective value of the entire stack of LTE patents in a phone. A recent court judgment valued that LTE stack at roughly $20 for a smartphone with an average selling price of $324, but with greater price transparency from both sides, the market itself will likely set a rational price for the LTE stack. Royalties can then be paid to patent owners roughly proportionate to each patent owner’s percentage share of the total LTE patent stack.

And third, ensure greater transparency by promoting collective licensing solutions such as patent pools that openly publish their pricing frameworks and offer consistent terms to all licensees. Given the “prisoner’s dilemma” dynamics in patent licensing today, it is unrealistic to expect any one patent owner to unilaterally forego potential business advantage by revealing its pricing strategies. But collective licensing approaches such as patent pools reduce the risks of transparency for everyone.

As the IP journal Intellectual Asset Management recently noted, “There’s a growing sense that a collective approach to licensing could help solve some of the problems of the industry which, in sectors like mobile, has been scarred by long-running and costly disputes between patent owners and potential licensees.”

Our “peace plan” would eliminate many of the incentives and opportunities for gamesmanship in wireless patent licensing. And most importantly, it would help patent owners and product makers avoid a repeat of yesterday’s costly smartphone wars in tomorrow’s connected car, autonomous vehicle, and Internet of Things (IoT) industries.

It’s time for a new realignment in the industry — one in which the conflict is no longer between product maker and patent owner, but between those who license patents on a fair and transparent basis, and those who do not.

 


0

Home decorating gets a new AR toolkit thanks to Intellectual Ventures’ new incubator

15:05 | 21 November

Taking another step toward shedding its reputation as the tech industry’s most notorious patent troll, Intellectual Ventures is launching the first company from its incubator.

The company’s ISF Incubator has licensed technology to LexSet —  a spinout launched by two bi-coastal serial entrepreneurs (and recovering architects) Leslie Karpas and Francis Bitonti — to roll out a suite of augmented reality tools for interior design and furniture assembly.

The multi-billion dollar home design industry is a massive global business. Everyone in the world, it seems, wants to keep up with the Joneses — or at least with the images they see on the Joneses’ Instagram and Pinterest accounts.

Just ask the investors in companies like Wayfair, which is now publicly traded with a market cap of nearly $5.8 billion; or Laurel and Wolf, which raised $20 million at a nearly $100 million valuation from none other than Benchmark Capital — one of Silicon Valley’s marquee investment firms.

In all venture investors have backed roughly 60 deals with some $1.4 billion in financing in the home decorating or interior design space, according to a search on Crunchbase. So it’s no surprise that a market that vast would be one of the first to attract the attention of entrepreneurs and the imagination of Intellectual Ventures’ newly minted ISF Incubator.

Seattle-based Intellectual Ventures has long been viewed with no small amount of contempt (and a large amount of fear) by Silicon Valley’s investment class, because of its reputation as a patent hole — a gaping maw in the Northwest corner of the U.S. where patents go to die and be reborn as fodder for litigation.

As an Economist profile put it in a 2015 article:

In its 10 year life, [Intellectual Ventures] has filed more than 3,000 patents for its own inventors’ work, and acquired 70,000 more, putting it ahead of the likes of Google, Toyota and Boeing. “What venture capital did for startups,” Myhrvold says, “we want to do for inventions.”

Critics would argue that Myhrvold’s high-minded talk is belied by his company’s predilection for litigation over innovation.

The same article sees Myhrvold responding to those Valley critics.

“Silicon Valley is a very aspirational place. Everyone’s aspiring for their Nirvana or heaven, which is to become super-fucking-rich and powerful very young. ‘Oh my God, I’ve got this god-given right to go out and take any idea I want and become a billionaire at age 30.’ Very few get that, but that doesn’t stop them idealising [sic] it. It’s kind of a secular religion, and what we do, rewarding people who originate ideas, is apostasy to them because it’s not their algorithm.”

And for the past several years the firm has been working hard on research to generate its own intellectual property and to use that trove of patents to build new companies rather than just suing existing ones.

LexSet is one of the early fruits of that labor.

Using a combination of machine learning and visualization tools culled from the IV portfolio along with the skills Karpas and Bitonti honed as architects and designers, LexSet has built a clutch of products for furniture makers and home design retailers to boost sales. The products let users scan their homes and furniture to come up with design and decoration suggestions.

  1. LexSemble

    LexSemble demo
  2. LexSight

    LexSight demo
  3. LexTile

    LexTile
 View Slideshow
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Right now it’s a recommendation engine for interior design and an instruction manual for building out furniture — if the company’s recommendations were generated by an incredibly sophisticated algorithm that was refined by two of the foremost designers operating at the intersection of technology and the arts.

Karpas, previously invented manufacturing processes for Turner Award-winning artist Anish Kapoor and developed new ways to print medical grade silicone as the founder of the medical device company, Metamason. Bitonti, founder of Studio Bitonti (and an old New York contact of mine) has designed 3D printed objects, one of which is included in the collection of the Smithsonian.

Karpas first heard about the ISF Incubator from a mentor who’d encouraged him to do a bit of digging through the intellectual property on offer.

He started working with ISF in June with Azam Khan, director of new ventures at ISF Incubator, on potential products and received formal approval to develop technology with the spinout later that summer.

The company’s products consist of four distinct tools:  LexSight, which combines image recognition tools that identify objects in a room and recommends other decorations or spatial configurations to compliment the existing objects; LexGuide, which offers a catalogue of offerings from different retailers; LexTile which can create different tiling patterns for surfaces; and finally, LexSemble, which provides instructions for making furniture in augmented reality.

“A lot of these things are hard to describe,” says Bitonti. “The leverage the work we’ve done in generative tooling.”

For Khan, the pairing was nothing short of serendipitous. “Les had the spark to build the suite on top of the inventions in our portfolio,” he said. “And he had validation from Fancis on the technical side.”

Bitonti and Karpas may have built the toolkit, but it’s the capital and intellectual property from Intellectual Ventures’ incubator that’s been the engine driving the initial business, according to Khan.

It’s important to note, that the LexSet business is the first to spin out from Intellectual Ventures’ newly formed incubator. The company has actually spun out 15 companies already, according to Khan, which have raised $700 million in venture funding.

“What you’re sowing now is an ability to rapidly do that,” Khan said.

Another critical component of the incubator program is that it applies only to patents that have been developed inside of Intellectual Ventures, according to Khan. For him, it’s about, “creating a program to unlock other parts of our portfolio.”

The Invention Science Fund is tapping the parent portfolio of things that have been invented exclusively inside of Intellectual Ventures. Khan said that it’s a prime subset of the IV patent portfolio.

Khan didn’t disclose the amount of capital that the parent company committed to the fund, but said that the incubator would be seeding companies to the tune of “the low hundreds of thousands of dollars.”

The central thesis, said Khan, is to give the spinouts control of the intellectual property upon spinout, and not charge a licensing fee for future applications of the technology.

In the case of LexSet, those goals are much larger than simply providing tips and tricks for design thinking in a built environment, according to Karpas.

“What Francis and I are doing is to give anybody, anywhere an ability to create anything with the tools that they have around them,” Karpas said.

Featured Image: Tom Sibley/Getty Images

 


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Outside of AI, companies are doing less research and more development

19:25 | 4 July

If you’ve been following the headlines in the world of AI, you might be fooled into thinking that corporations are doubling down, rather than withdrawing, from pure research. But on the ground, things are considerably more complicated — tech companies are spending more on the development part of R&D while relying more on cash strapped universities to move the needle on research.

The Golden Goose Project, a new data visualization effort from Duke University’s Fuqua School of Business, attempts to highlight this paradigm shift with patent and research output statistics as well as data quantifying how research is applied, both inside companies and in the broader ecosystem.

For example, you can see how IBM’s patent output rose continually while publications involving employees peaked and fell off around 1992.

But while all of this data underscores a decline in corporate research, it doesn’t indicate that corporates are becoming any less innovative. Instead, new pipelines are opening up to facilitate the diffusion of research.

Startups are increasingly acting as vehicles for commercializing research and carrying it into aging corporates. On the aggregate, startups contribute very little research, but they do help make new technologies palatable.

Unfortunately, it increasingly seems like the university backbone of innovation is under siege from political interests. Research is heavily subsidized by the Federal Government. And while private philanthropies like the Gates Foundation and the Chan Zuckerberg Initiative have helped to fill that void, these groups can only do so much.

One fortunate branch of research that has been less impacted is artificial intelligence. Huge research group acquisitions, like Google’s $500 million purchase of Deep Mind, highlight an industry-wide desire to conduct more AI research internally. This thirst has forced corporates to cater to the interests of researchers — separating research groups as much as possible from revenue-centric company interests.

“Everyone has to have the capacity for AI,” Ashish Arora, the Duke Professor spearheading the research, told me in an interview. “Universities haven’t produced enough AI researchers, so companies have to invest internally.”

But while this research has helped companies like Facebook, Microsoft and Google make huge strides in AI, it isn’t a universal formula for corporate innovation. Executives often struggle to draw clear lines between research and development, making it hard to pull off independent and valuable research over the long hall.

One major shortcoming of The Golden Goose Project is that it only takes into account data collected between 1980 until 2006. Hundreds of billions of dollars of market value have been created in that time, limiting the contemporary applicability of the work.

The National Science Foundation has played a key role in backing the data visualization project. Arora told me that he has put in a grant to continue the research and fill in the missing years as soon as possible.

 


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Google’s and Intertrust’s new PatentShield helps startups fight patent litigation in return for equity

22:00 | 25 April

Google and Intertrust today announced the launch of PatentShield, a new program that aims to help defend startups from patent litigation — in return for a stake in those companies.

The basic idea here is to give startups that join the program ownership of a selection of patents from Google’s and Intertrust’s portfolio that they can then use as a deterrent against potential patent litigation from established players in their fields. Google is seeding the program with a selection of its own patents and Intertrust, which itself has built up a patent portfolio around media streaming, IoT, security and other areas, will also give these startups access to some of its own patents and its intellectual property team.

If a startup gets sued, it can then choose patents from the PatentShield portfolio to defend itself by countersuing its opponents.

“The program extends the array of initiatives Google has developed to help reduce frivolous litigation in the technology space,” said Allen Lo, Google’s Deputy General Counsel for patents in today’s announcement. Indeed, Google has long shown at least some interest in helping others defend themselves from patent litigation. With its Open Patent Non-Assertion Pledge, for example, the company already pledged that it wouldn’t sue third parties that develop free or open source software that potentially infringed on a selection of its patents. It’s worth noting, though, that this list of patents hasn’t been updated since 2014.

Google, Microsoft, Facebook, IBM and others also teamed up last year to create a new marketplace for buying and selling patents.

The most interesting aspect of this new program, though, is that the companies that are accepted into the program provide a small equity grant to PatentShield. Intertrust tells me that the size of the stake “is a function of the maturity of the company, its products and the litigation risk in their market.”

We have asked Google to clarify its role in this program and if it also plans to take a stake in these companies. We will update this post once we hear more.

 


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