Overview
The IP industry, which is traditionally very conservative in nature, is currently experiencing a significant sea change requiring all companies to re-examine their IP strategies. This theme formed the basis of ipCapital Group’s 12th IP thought leadership conference, which we held on Thursday, April 30 in Burlington, Vermont. Business, technical & legal professionals from various organizations gathered in downtown Burlington to discuss the external environment, share IP strategy best practices, and obtain continuing legal education (CLE) credit. After facilitators provided introductions to specific topics, the group engaged in roundtable discussion to offer unique perspectives and solutions to key issues.
Below, please find ipCG’s summaries of the individual topics discussed.
See the conference agenda.
Welcome & State of the IP Industry
Facilitated by Marshall Phelps, former Deputy General Counsel of IP and Corporate Vice President of Microsoft Corporation.
Marshall Phelps kicked off the conference by touching on a wide variety of important topics currently affecting the IP industry, including:
the State of the IP Industry
- Growing importance of patent quality;
- Emerging licensing business models that foster innovation;
- Decline in litigation;
- International considerations (e.g., European unitary patent; China); and
- Declining patent values.
Key takeaways from the discussion included:
- U.S. is falling behind in innovation as companies begin to shift away from R&D and leverage acquisitions to gain new technologies. “Silicon Valley is starting to look like the Pharma Industry with all of its acquisitions.”;
- Craig, Caroline. “MIT paints grim picture for future of U.S. tech research.” Infoworld Tech Watch, Infoworld, 1 May 2015.
- International patent systems like China are improving in terms of quality. This adds to concern with regard to the U.S. falling behind in R&D; and
- With so much change and uncertainty in the IP industry, we are starting to see a shift in patent quality and innovation. Companies are leveraging new tools to help innovate faster and at a higher quality.
Changes in the Patent Landscape & Impact on IP Strategies
Facilitated by Larry Meier, Director & Intellectual Property Chair at Downs Rachlin Martin and Tim Brisson, Senior Advisor at ipCG.
Larry Meier and Tim Brisson continued our discussion of external changes by focusing in on several specific current events:
Recent court decisions regarding subject matter eligibility (e.g., Alice v CLS Bank, Mayo v Prometheus);- Opposing legislative patent reform (e.g., Innovation Act, Strong Act); and
- The changing role of litigation with regard to the American Invents Act (e.g., focus on Patent Trial and Appeal Board, Inter Partes Review).
Key takeaways from the discussion included:
- Quality patenting must start at the beginning of the innovation process;
- To develop quality patents, focus on the business advantage of the invention (e.g., what is the usefulness of my invention?);
- AIA and other changes have created new tools and pathways to defend patents; as a result, some investors are pulling money out of litigation; and
- To increase IP monetization success, include & motivate inventors.
Corporate Level Viewpoints on IP Strategy
Facilitated by Kristin Westgard, Deputy General Counsel at Koch Industries.
Kristin Westgard helped the group transition from external changes into discussions around IP strategy. She introduced the Koch companies, its business interests across a wide range of industries (e.g., agriculture, oil & gas) and its large supporting IP portfolio. Our facilitator also explained that with such a large diversity of business units, it is essential that Koch have a unifying corporate-level IP strategy with executive buy-in.
One way to garner executive support for an IP strategy is to communicate IP “return on investment” (ROI) by focusing on specific value drivers. She presented six different examples of Koch IP value drivers and various methods that Koch uses to quantify return.
Development & Execution of Business Unit IP Strategies
Facilitated by Mark Pobanz, IPD & Global IP Process Leader at Dow AgroSciences.
Mark Pobanz presented on the topic of business IP Strategy & execution through the Dow AgroSciences (DAS) lens. After introducing DAS & the Intellectual Property Development (IPD) team, our facilitator described DAS’ IP strategy & its value to the organization.
Key subtopics explored during the discussion included:
- Key components of an IP strategy that make it a highly effective business tool;
- Tangible business benefits of an IP strategy;
- Key performance indicators (KPIs) used to measure effectiveness of strategy execution; and
- Business use cases for IP landscaping.
Strategies for Monetizing Intellectual Property
Facilitated by Kim Pugliese, Director of Intellectual Property Licensing at Xerox and Sri Divakaruni, Director of Innovation Business Development at United Technologies.
Kim Pugliese and Sri Divakaruni facilitated a dynamic discussion on considerations for IP portfolio monetization. Coming from two very different corporate contexts, our facilitators walked us through recent eye-catching deals, culture and motivation considerations of monetization processes, strategic tradeoffs to consider, staffing, and metrics.
Particularly interesting discussions touched on:
How to structure monetization groups within the organization, whether as a profit or cost center, and reporting to whom;- Monetization considerations when partnering with other organizations: how to successfully support partners in bringing innovations to market;
- Balancing payoff amount with time to payoff, keeping in mind the ‘sweet spots’ of negotiation; and
- Getting buy-in from the C-suite, using key benchmarks and approaches likely to succeed.
IAM Topic #1: Trade Secrets
Facilitated by Bruce Story, Senior Advisor at ipCapital Group & former Senior Director,
Intellectual Capital Management at Dow Chemical.
Bruce Story facilitated a very interesting discussion around trade secrets. He introduced the growing importance of this asset class and touched on the three key factors that contribute to a successful trade secret program:
- Written trade secret policy;
- Employee agreements and training; and
- Reasonable security measures.
Key takeaways from the discussion included:
- Corporate IP Strategy should take into account trade secrets and know-how, along with patents and trademarks;
- To protect IP offshore – consider “black-boxing” technology, by splitting IP into patents and trade secrets, where the trade secret IP cannot be reverse-engineered by examining the product;
- Inventorying of trade secrets is key to demonstrating “reasonable” protection efforts; and
- Trade secret recordkeeping critical to support AIA “prior use defense” to patent infringement.
IAM Topic #2: Emerging Models for IP Research
Facilitated by Pete Vanderheyden, President at Article One Partners.
Pete Vanderheyden summarized a current state of IP research and the push for higher quality IP research. Topics discussed included:
- Past events that have driven companies to look at patent quality;
- The need for new IP research models to support this new push for higher quality patents;
- Traditional and new IP research models; and
- How companies are leveraging IP research for new use cases other than litigation/invalidity.
Key takeaways from the discussion included:
- IP research (prior art research) is no longer a “checkbox item” on a “to do list” when filing a patent. Organizations must leverage IP research throughout the entire innovation process.
- Vanderheyden, Peter. “Prior Art Searching: A Journey Or an Event?” go.articleonepartners.com/e/19302/er-Newsletter-Column-April2015/3ksccr/561572462;
- New IP research models support “technology scouting” as development and commercialization of invention has become more "open."
- Ashish Arora, Wesley M. Cohen, John P. Walsh. “The Acquisition and Commercialization of Invention in American Manufacturing: Incidence and Impact”
www.nber.org/papers/w20264; - How firms justify added investment in IP research while developing higher quality patents.
IAM Topic #3: Emerging Business Models: Patents & Patent Information
Facilitated by Chris Smyth, Vice President of Business Development at Patent Properties.
Chris Smyth provided the group with a high-level view of new approaches to the business of patents and patent information. This fascinating session touched on uses of patent data to inform organic and inorganic growth in established firms, to manage legal and technology risk, to innovate and collaborate more effectively, and to invest and trade.
Discussion of these developing models sparked considerable interest among our attendees, in particular:
- How to use data analysis platforms in conjunction with more labor intensive analysis processes;
- Value of various defensive aggregators to operating firms; and
- Viability of these emerging business models, particularly in the context of the recent closure of IPXI.
Capstone: Thinking on Forward Innovation
Facilitated by John Cronin, Managing Director & Chairman at ipCG and former chief of IBM's "Patent Factory."
John Cronin wrapped up the conference by discussing why recent changes in the patent landscape, especially those brought about through the AIA and cases such as Alice vs. CLS Bank International, have created a need for organizations to devise new IP development strategies that address the issues of speed, quality and relevance.
Key takeaways from the discussion included:
- Corporate interest is shifting away from patents in factor of invention creation. This trend is greatly aided by innovative corporate cultures in which the motivation for invention comes from the top;
- Speed becomes a defining factor for winning at strategy, especially as companies stay ahead of their competition in a first-to-file, post-AIA environment;
- Large numbers of new invention concepts are critical for accelerating invention development; and
- Investors will support innovative companies by investing in invention, not litigation. This has changed the investment model towards more speculative IP development, in which inventors are asked to predict IP needs 3-5 years from now (e.g., to invent-in-front of new technology trends).
Participant Feedback: Important Topics for Future Conferences
Our attendees shared the following in relation to the most important issues facing their organizations today:
Strategy
-IP Strategy: understanding and Implementation in a matrix organization
-Optimal IP strategies in emerging/critical markets (China, India, Brazil/Argentina, etc.)
-Implications/strategies if Patent Reform legislation passes
-Potential blind spots to competitors with new business models
IP Monetization
-Communicating the monetization message across the organization
-Optimizing creation of strategic and assertable IP to support our new developments
-Scaling up team to support IP Monetization efforts
Engaging Management
-Engaging and motivating R&D and executive management
-Overcoming ultra-conservatism in senior executive ranks regarding leveraging IP
Financing of IP
-Recovering research/investment costs
-Resources to support IAM
Other topics: Litigation, Protection/Trade Secrets/Technology for IP Management
-Unwarranted patent litigation, not always from NPEs
-Protection of IP or confidential (trade secret) information internally and externally
-Finding docket management software
Please let us know if any of these topics pique your interest, and we would be happy to follow up with you for further discussion. To share your thoughts on this email us at info@ipcg.com.
Agenda & Discussion Topics
Wednesday April 29
5:00 - 8:00 pm Registration, Wine & Cheese Reception, Dinner
Bleu, Northeast Seafood, Courtyard Marriot Burlington Harbor
Thursday April 30
8:00 - 8:30am Breakfast
8:30 - 9:00am Welcome & State of the IP Industry
Speaker: Marshall Phelps, former Deputy General Counsel of IP and Corporate Vice President of Microsoft Corporation
9:00 - 10:30am Changes in the Patent Landscape & Impact on IP Strategies
Group discussion led by: Marshall Phelps & Larry Meier, Downs Rachlin Martin PLLC
10:30 - 11:00am Networking Break
11:00 - 11:45am Corporate-Level Viewpoints on IP Strategy
Group discussion led by: Kristin Westgard, Koch Industries
11:45am - 12:30pm Development & Execution of Business-Unit IP Strategies
Group discussion led by: Mark Pobanz, Dow AgroSciences
12:30 - 1:30pm Lunch
1:30 - 2:15pm Strategies for Monetizing Intellectual Property
Group discussion led by: Kim Pugliese, Xerox & Sri Divakaruni, UTC
2:15 - 2:45pm IAM Topic #1: Trade Secrets
Group discussion led by: Bruce Story, former Senior Director, Intellectual Capital Management, Dow Chemical
2:45 - 3:15pm Networking Break
3:15 - 3:45pm IAM Topic #2: Emerging Models for IP Research
Group discussion led by: Peter Vanderheyden, Article One Partners
3:45 - 4:15pm IAM Topic #3: Emerging Models for IP Utilization
Group discussion led by: Chris Smyth, Patent Properties
4:15 - 5:00pm Capstone: Thinking on Forward Innovation
Speaker: John Cronin, ipCreate
