Demand Surges for Talent to Strategically Manage IP Assets
In a slowing economy, corporations must find ways to expand and generate income. Today, a growing number of companies are focusing on the strength of their patent portfolio. Strategic use of IP assets, particularly licensing and franchising, has become a significant and reliable source of income for many companies, according to the World Intellectual Property Organization (WIPO). For example, IBM, Texas Instruments, and Qualcomm each generate $1 billion and more in revenues from patent licensing annually, while many Japanese and Asian companies pay out similar amounts for licenses every year, according to EDN.
As more businesses leverage IP to generate revenue and remain competitive, executive search firm, A.E. Feldman, reports that many are growing their IP asset management teams. As a result, demand for IP licensing talent is surging. The need for legal assistance is also creating opportunities for attorneys, who are increasingly responding to IP issues. A.E. Feldman says top tier law firms with booming intellectual property practices are currently seeking patent attorneys.
Traditionally, intellectual property (IP) systems were established to create a barrier from competitors. Today, however, more corporations are using their IP assets as instruments for developing business relationships and accessing new technologies, reports WIPO. In short, IP assets can be leveraged to access markets, generate dependable income and provide a significant boost to a company’s bottom line.
Two key strategic ways to maximize IP assets include licensing and franchising. Licensing is when an owner of an intangible asset, transfers the right to use that asset to another, for a price, while retaining ownership of that asset, according to WIPO. It provides a legal way to protect knowledge and creativity (i.e. patents, trademarks and copyrights) while simultaneously taking advantage of a valuable tradable intangible asset.
In contrast, a franchise is a specialized license where for a fee a franchisee is allowed by the franchisor to use a particular business model and is licensed a bundle of IP and supported by training and technical support.
IBM maintains an active… and lucrative… patent and technology licensing program. The company, which has earned more U.S. patents than any other company for the past 14 years, says patents have become a principal means of establishing value for the creators and users of knowledge-based assets.
Now, with a global patent portfolio exceeding 40,000 active patents, IBM says it is expanding its use of IP to accelerate the adoption of open standards through creative licensing and stewardship programs.
Acacia Technologies Group, last year, more than tripled its stock price and quadrupled its revenue, to $35.9 million, according to IP Law & Business. The report quotes Paul Ryan, Acacia’s Founder and CEO, as saying the company’s growth is a validation that IP licensing has become a big business. “What we’ve basically done is to build an IBM licensing model and make that available to everyone,” says Ryan.
After joining Kodak back in 2003, CEO, Antonio Perez, mined the company’s patent archives for intellectual property - a step that is yielding well above $250 million a year in licensing fees, according to the NYT. The report quotes Kodak’s President, Philip J. Faraci, as saying, “Finally, we have a structure that promotes commercialization of research.”
Law Firms Expanding IP Practices
The need for IP legal assistance has exploded in the past decade as more companies rely on ideas, technologies and processes. That has led to a boom in the number of IP attorneys. Membership in the American Intellectual Property Law Association (AIPLA) has grown to more than 17,000 professionals, according to the Arlington-based association.
The New York office of Kirkpatrick & Lockhart Preston Gates Ellis LLP just added two intellectual property attorneys. K&L Gates Chairman and Global Managing Partner Peter J. Kalis, says the recent hires are a major step forward in “the establishment of a top-tier intellectual property practice in our New York office and promotes the development of our leading firmwide intellectual property practice.”
Washington Business Journal also reports that a number of firms have plans to expand their IP practices in the foreseeable future: Crowell & Moring has hired seven patent prosecutors and litigators. Covington & Burling plans to add 10 attorneys to its IP group over the next two years. The report also states that Dickstein Shapiro, which started its IP group in 1986, plans to add 15 to 20 more over the next two years. McDermott Will & Emery also expects to grow its IP practice by 14 attorneys by the end of next year.
