Best Practices in IP 2013: the monetisation session

Following Jonathan Taub's keynote speech, today's "Best Practices in IP 2013" conference continued with a panel session featuring Paul Lerner (WiLAN), Naftali Levy (Alvarion), Ilan Ben David (Genoa Color), Zvi Marom (BATM), Steven Steger (Global IP Law Group) and Naomi Assia (Naomi Assia Law Offices). Moderator Monte Silver handled this session as a Q and A as follows:

Q. Whatever happened to Nortel?
Steven Steger: after Nortel became bankrupt its only major asset was its IP portfolio -- and no portfolio of that magnitude had gone up for sale before. Nortel had the opportunity to become a licensing company or to sell up.  Given that the biggest players in the mobile technology sector were young, patent-naked companies, the option of selling Nortel's incredibly unencumbered portfolio was too good to miss. Once Google indicated that it was prepared to pay $900 million, that raised a great deal of interest in acquiring the patents -- which ultimately sold to $4.5 billion.

Q. What makes a patent valuable?
Paul Lerner: lots of things. It may be useful for litigating, exploiting or using defensively.  In each case its value will be different.  As a patent litigator, the value to me is what I expect to make by enforcing that patent.

Ilan Ben David: when people have a defensive or offensive marketing strategy, they will buy a technology rather than just the patents. However, once the objective is enforcement, all the interest is in an allegedly infringed patent -- you can't expect to sell an entire technology portfolio and perhaps not even its uninfringed patents.

Naftali Levy: the value of patents is not always apparent, even in the course of litigation. As an in-house manager, one has to know the status of each patent in standards-related technology.

Q. How do you decide what to do with your resources: when do you invest in R&D, litigation or just sell up?
Zvi Marom: there is always a limit to the amount one can invest in patents at the R&D stage, before patents for new products are filed. As a start-up, it's also useful to guard one's flow of revenue by getting the big guys to protect you against the risks and costs of patent litigation. Investment in protecting patent rights in countries that (at the mildest) have no respect for patent rights must also be taken into account. One has to put all possible expenses into a "witches' brew" and see what comes out.

Naomi Assia: it's good for start-ups to focus not just on the fact that they have a couple of patents but on the potential for monetisation in the future.

Q. What is a non-core asset and when do you sell it?
Zvi Marom: (i) an asset that is not capable of generating 10% of one's income and it's not so new; (iii) when you can sell it to someone other than a competitor.

Marathon Patent Group – The Hot Bet?

Apparently since around mid-November of last year, Marathon Patent Group (MPG) evolved from American Strategic Minerals and discarded its mineral and real estate assets in favor of an IP management and enforcement services business model.  MPG has been very, very active since then and has received quite a bit of (mostly positive) press (here, here, here and here).  MPG detailed some of its activities in an April 25, 2013 report:

·         Acquired CyberFone Systems and its patent portfolio which has generated 32 settlement and license agreements for a total of $15.5 million in revenue

·         Acquired US Patent 5,331,637 from MOSAID Technologies, one of the world's leading intellectual property management companies

·         Entered into a strategic relationship with IP Navigation (IPNav), the leader in full-service patent monetization

·         Completed the acquisition of Sampo IP LLC acquiring its patent portfolio consisting of three patents and one pending patent application

·         Commenced our first licensing campaign on March 20, 2013 by filing a patent infringement lawsuit in the United States District Court for the Eastern District of Texas against Sony Computer Entertainment America LLC, Siemens Energy, Inc., CB Apex Realtors, d/b/a Coldwell Banker Apex Realtors, Blue Cross and Blue Shield Association, Juniper Networks, Inc., Winn Dixie Stores, Inc., and Dell, Inc.

·         Established a new IP Research and Services Center at the University of Arizona Science & Technology Park in Tucson, Arizona . . . .

Since April 25, 2013, MPG has also, through its subsidiaries, filed patent infringement lawsuits against Ambit Energy Holdings LLC, BMC Software Inc., HomeAway Inc., Hoover's Inc. and Ristken Software in the Eastern District of Texas; Thompson Reuters in the District of Delaware; Sprint Nextel Corporation, Juniper Networks, Cisco Systems, Bloomberg L.P., Hitachi Cable America, D-Link Corporation, Avaya, Hewlett-Packard Company, Enterasys Networks, Extreme Networks, TIBCO Software, BT Group, SAVVIS Inc., Zhone Technologies, Huawei Technologies, Allied Telesis, and Adtran in the District of Delaware;  and E*Trade Financial Corporate Services Inc., Liberty Mutual Group Inc., Aetna Inc., Avon Products Inc., Starbucks Corporation, Yum! Brands Inc., Hewlett-Packard Company, and Alcatel-Lucent USA Inc. in the Eastern District of Texas. Like I mentioned before, MPG is getting a lot of press for its activity. 

Co-blogger Neil Wilkof recently raised the question about the interest of boards in questions concerning IP—and he expressly excluded an entity such as MPG.  An entity such as MPG, of course, is primarily concerned with IP and notably, patent expert Professor Craig Nard recently joined MPG's board of directors.  I think that the importance of IP will lead companies to move toward accessing the services of companies like MPG although presently MPG seems mostly (?) involved in the enforcement of its IP.   I also think more companies will seek to draw in more IP experts on their boards—including some professors.  Does anyone have a sense of whether companies are utilizing the valuation, auditing or related services of companies similar to MPG (although MPG may be a different breed according to Forbes)?  The Forbes article indicates that some companies may be doing just that with MPG.