The Licensing Executives Society, Inc., recently released the results of the LES High Tech Sector Royalty Rates & Deal Terms Survey. This survey covers the ever-changing world of intellectual property licensing and patents. Data from the survey digs much deeper than what can be found through public sources. Information from this survey and the past two LES surveys gives us a closer look at what is happening over time to the licensing market from 2008 to 2017.
Taking a look at the numbers
Protecting the value of a patent is an important part of intellectual property asset management. A lot of strategies for doing this are tried and true, but as we have written about previously, some strategies don't always work.
In the earlier case, the tactic in question involved a pharmaceutical company that sought to extend the security of a drug patent by transferring a patent to a Native American tribe and licensing back exclusive rights to the product. The theory was to have the tribe claim sovereign immunity against against patent validity challenges from potential competitors through inter partes review (IPR). That move didn't fly with the Patent Trial and Appeal Board (PTAB) and the U.S. Court of Appeals for the Federal Circuit affirmed the board's decision.
Road Runner cartoon fans know that if Wile E. Coyote pulls out a bucket of glue to capture the elusive bird, things are not going to go well. Whatever happens, the nature of the sticky situation is one that will mean trouble for the canine and elicit laughs from viewers.
In the intellectual property realm, the patent thicket is a sticky situation many may encounter. The humor is lacking, however. As described by most observers, it involves creating a web of patents around a single product or process. The result is that a long list of patents that makes it easier for a company to extend its exclusive right to monetize a product beyond the original patent expiration.
A common element of patent challenges these days through inter partes review (IPR) is the claim that a patent shouldn't have been granted in the first place because of obviousness due to prior art. This is a claim that Apple attempted to use in responding to allegations that it had infringed on a patent held by PersonalWeb Technologies, LLC. Apple's argument succeeded in IPR before the Patent Trial and Appeal Board (PTAB). However, PersonalWeb won on appeal.
The U.S. Court of Appeals for the Federal Circuit faulted the board for accepting an Apple expert's view that the PersonalWeb patent for data processing "must" have combined elements of two earlier patents, therefore making the PersonalWeb patent invalid. The problem, in the court's view, is that Apple's narrative represented only one possible method of application, not the only one.
Nondisclosure agreements (NDAs) are part and parcel of effective intellectual property management. What elements an NDA should include depends on your intent. To be sure you meet your specific needs, you should consult an experienced IP attorney.
That said, most experts agree that there are certain provisions every confidentiality agreement should include, and in this post we explore them.
Few would argue the U.S. legal system is perfect. It is what we have and it is up to us to manage it in ways that achieve optimal justice. In recent years, the concept of arbitration has taken root. The idea being that by removing disputes from courts, resolution becomes more efficient and less costly.
Businesses seem to like these private venue methods. According to a recent study by the University of California Davis Law Review, 81 of the 100 biggest U.S. companies require arbitration of disputes. But not everyone agrees that this is a good thing. Critics say the arbitration destroys consumer rights.
The sports technology industry is quickly growing, and more companies are finding themselves facing patent lawsuits. Inter partes review, a faster and less expensive alternative to litigation, provides benefits to companies involved in patent disputes. Inter partes review (IPR) is a trial proceeding conducted at the United States Patent and Trademark Office to review the patentability of claims in a patent. Typically, final determinations are issued within one year. IPR allows for less discovery than in district court and challenges may only be based on existing patents or publications, resulting in a cheaper streamlined process.
Legal processes in the United States tend to offer a lot of opportunities to try to reverse a decision if one doesn't go the way you prefer. Litigating challenges of patents is no exception. However, as we have written about previously, just because the option of an appeal is available doesn't necessarily mean that it should be taken.
Depending on the circumstances of the case, the appealing party runs a risk of finding that the appeal never gets to the point of being argued. This can happen if the court decides the party has lost the right to pursue the matter any further. This can happen for a variety of reasons. To identify and avoid possible hurdles before deciding to press ahead on a claim, it makes sense to consult with experienced legal counsel.
It doesn't matter if you are a small technology company working your way up through the business ranks or an entity with a massive mother ship in Silicon Valley like Apple, intellectual property litigation tends to be a high-stakes game. Protecting your IP interests represents one significant challenge when you are a patent holder. On the other end of the scale is the prospect of your company facing accusations of infringement.
Regardless of which side of the fence you be on, one thing that often remains a constant is that the complexity of the legal processes are going to be such that it demands he help of experienced counsel.
Assessing damages in any type of legal case can be a tricky proposition. Often the amount sought tries to encompass not only actual damages, but projected losses. In a personal injury case, the physical evidence can go a long way toward proving the loss. But damages in patent law can be harder to quantify.
Federal patent law clearly states that when infringement of a patent is determined, the claimant is entitled to "damages adequate to compensate for the infringement, but in no event less than a reasonable royalty." The issue then becomes, how do you determine adequate compensation? A loss of profits can be difficult to prove making the royalty option more common. But then, what constitutes a reasonable royalty?
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