Jeffer, Mangels, Butler & Marmaro announced that it has filed a patent infringement lawsuit on behalf of EMG Technology against Apple. The lawsuit, which seeks unspecified damages, accuses Apple of infringing U.S. Patent No. 7,441,196 in the way the iPhone navigates the Internet. This is just one example of the growing number of lawsuits being filed – an indication of the high value associated with intellectual property (IP).
Intellectual property, such as patents, copyrights and trademarks, have become increasingly important to our economy both regionally and nationally, according to The Business Review in Albany. The report contends that as manufacturing and production facilities (and the jobs that accompany them) are exported overseas, the emphasis on corporate valuation in the U.S. has shifted from physical property to intellectual property. In order to stimulate and sustain economic growth, however, the ideas that provide economic value must be commercialized and protected.
The slowing economy has pushed more companies to become rigorous in protecting their ideas and find ways to expand and generate revenue. IP assets can be leveraged to access markets, generate dependablerevenue and provide a significant boost to a company’s bottom line. As a result, a growing number of corporations are focusing on the strength of their patent portfolio. Now, as more businesses leverage IP to generate revenue and remain competitive, executive search firm, A.E. Feldman, reports that corporations are expanding their IP asset management teams and introducing significantly higher levels of sophistication to their IP asset management process. As a result, demand for IP talent is intensifying.
Firms Seek to Extract More Value from IP Portfolios
Industry experts recruiting for A.E. Feldman say technology executives seek to maximize the value of their IP portfolios, which have become increasingly significant to a company’s bottom line.
Intellectual property (IP) refers to creations of the mind: inventions, works of art and literature, symbols, names, images, and designs used in commerce, according to the World Intellectual Property Organization (WIPO). Intellectual property is divided into two categories: industrial property, which includes patents, trademarks and industrial designs as well as copyright, which includes literary and artistic works. PrincewaterhouseCoopers (PwC) argues that IP has become the most critical component of value creation for companies around the world.
PwC quotes Horatio Gutierrez, VP and Deputy General Counsel at Microsoft, IP and Licensing Group, as saying, “We are moving toward a global economy where the true strategic asset is IP. We invest over $7 billion a year in R&D, and then we turn that knowledge, that IP, into licensing revenue.”
Explosion of Patent Litigation
A review of federal litigation trends over the last 10 years reveals an increase of approximately 50% in the number of intellectual property lawsuits filed throughout the country, according to the WSJ. In fact, the WSJ report states the growth in patent litigation has been characterized as an “explosion.”
Eastman Kodak sued Samsung Electronics and LG Electronics, accusing them of infringing Kodak patents in the design of camera phones, according to the WSJ. The report states that Kodak has increasingly turned to its patent portfolio in search of profit. The company’s Chief Executive, Antonio Perez, pursued revenue from licensing fees as part of his effort to help the company recover from years of huge losses. According to the WSJ Perez told investors Kodak receives between $250 and $350 million a year in revenue from its IP portfolio. Kodak has already reached licensing deals with most rival makers of digital cameras as well as most makers of camera phones.
Addressing Patent Risk
Several organizations referred to as defensive patent aggregators, acquire patent rights and provide them to clients for a fee, reducing risk and litigation costs.
A San Francisco start-up, RPX, has announced plans to join this group of defensive patent aggregators and has lined up Cisco Systems and IBM as initial members, according to the WSJ. The WSJ report states that RPX estimates that those firms have raised more than $6 billion over the past decade to finance patent purchases.
The WSJ quotes John Amster, RPX’s co-chief executive, as saying he hopes to attract hundreds and eventually thousands of corporate members. “At thousands of members I think it’s a game-changing business,” Mr. Amster said.
In contrast to RPX, there is another group of organizations that buy up patents and seek royalties from other companies. These licensing firms are often called nonpracticing entities (NPEs), or patent trolls, because they don’t make or sell products that use patents.
In the last decade, NPEs have raised over $6 billion in private capital to acquire patents to use offensively against companies that manufacture and sell technology products and related services. Offensively initiated lawsuits by NPEs grew nearly 300% during this period and now represent 16% of all patent litigation in the U.S., according to PatentFreedom.
A. E. Feldman is successfully working with well known companies who are leveraging their IP portfolio to generate additional revenue. Are you looking to extract more value from your IP portfolio? If you want to grow your career or your company’s bottom line, contact A.E. Feldman’s President, Mitch Feldman today!