Hey “Patent Experts”: How Do You Like Groupon’s Patent Now? *Crickets*

Yesterday’s announcement of the firing of Groupon’s CEO and the hope for a rebirth of the company’s business model brought to mind a post that I wrote a couple of years ago railing against the self-interested opinions of “patent experts” on why Google offered $6 Billion for Groupon in late 2010.  Re-reading the post in the rear-view mirror, it is more clear than ever that Google made the offer for the precise reason I set out below in December 2010: Google, and other acquirers, buy business models, not patents.  As we strategy-focused IP people have been saying for years, a patent is worthless unless it covers a viable business model–either yours or one you want to own.  Google is interested in Groupon because it offers them an established business model in an area that fits into their long term business strategy.  Are the patents nice to have? Of course, but if Groupon didn’t have the patents, Google would still want to own them, and likely for a price in the same neighborhood as it bid.  At the end of the day, the Google’s offer for Groupon was a “build vs. buy” decision:  Google ran the numbers and believed that it would make more money buying Groupon than by building something Continue Reading →

Google Changes the Game Again–This Time for Patent Owners and Those Who Serve Them

Patrick Anderson of the great Gametime IP blog reported the details of Google’s new prior art searching tool*.   This is such important news, I thought it important to repeat it in a separate post.  Patrick provides detailed instructions for how to use the Google patent searching tool, and I will not repeat that information here.  This post provides commentary on why I think this is a very good development for the patent world.   Google’s original announcement on its blog is here.  It does not appear coincidental that Google is upgrading its patent searching capabilities:  in this press release from June 2010 we are informed of the partnership between Google and the USPTO to increase the amount of US patent information available to the public. When used correctly, Google’s tool can help “democratize” the patent analysis process by putting more power in the hands of those who are not part of the closed “guild” of patent professionals.  For example, before spending money on a search (and the opinion that most patent professionals will insist on writing to put context to the search), an inventor can herself get a feel for not just the patentability of her invention, but also Continue Reading →

Success at Open Innovation Requires Finding the Right Partners: Here’s How to Improve Your Success Rates

With more companies building open innovation into their product development platforms, there would appear to be increasing opportunities for companies and independent IP owners to sell or license their technology.  In my many conversations with corporate innovation professionals, I find that that the desire to in-source externally developed products and technology may be strong, but few know how to go about finding and acquiring what their companies need.  As I have written about before, developing fruitful open innovation relationships is very much like dating:  you may want to do so, but unless you know where to show up, and how to initiate conversation, chances are you will remain single for a long time unless you engage a matchmaker. Well, I guess you could be your own “matchmaker” and search for potential partners.  This is easier today than it used to be because many corporations have idea submission portals and a few, like General Mills and Clorox, are even publicizing their detailed needs to the public.  This is a lot like finding your own mate, however.  You may show up someone all dolled up, but if your ideal mate isn’t also at the same place with the same message at the Continue Reading →

New Study Reinforces Value of Patents in Venture Capital Investment

Regular readers of the IP Asset Maximizer Blog will know that I am a strong advocate of the use of IP analytics by venture capital investors, as well as others.  Clearly, VC’s need better ways to gauge the appropriateness of an investment when more than 50% of venture investment is a loss. My point of view is based on personal experience with various clients, as well as external review of a few investments that I thought signaled that a review of the IP landscape should have been conducted prior to completing the deal.  So, I was glad to see my opinions backed up by real data.  Specifically, my friends at IP Vision, a patent landscaping and data company originally out of MIT, conducted an extensive study of 9,000 venture backed firms.  The study was done with investors, corporate executives and members of the faculty at MIT Sloan School of Management. Joff Wild discusses provides an overview of the results on his IAM Magazine blog.  (The original article is behind a pay wall at IAM Magazine, but I will post a link to it when it available for review in the future.)  What I find interesting, is that the baseline for Continue Reading →

Guest Blogger: How Patent Vulnerability Impacts Valuation by David Wanetick of IncreMental Advantage

(This week, David Wanetick, Managing Director of IncreMental Advantage provides readers if the IP Asset Maximizer Blog with an excellent overview of the various factors that he believes affect patent valuation.  Please let me know if you would like to be a Guest Blogger.) How Patent Vulnerability Impacts Valuation by David Wanetick of IncreMental Advantage As I often tell business leaders who attend my course on Valuing Early-Stage Technologies, valuing patents isn’t rocket science. It is much more difficult. Or to paraphrase Winston Churchill, valuing patents is a riddle, wrapped in a mystery, inside an enigma. Measuring even a well-delineated permanent entity is much more difficult than may be imagined. As Neil deGrasse Tyson (a renowned astrophysicist) and Benoit Mandelbrot (the father of fractal geometry) have discussed, no one really knows what the circumference of the coastline of the United Kingdom is. The tides will cause varying degrees of erosion on the coastline depending on the hour of measurement while the cumulative affect of choosing which rock formations to measure around will have a dramatic impact on the final assessment of circumference. Patent valuation is infinitely more difficult to determine than the measurements of a given land mass due to Continue Reading →

Seeking to Sell Your Patent to a Big Company? Think About These Negotation Tips

Over the past year of so, I have become friends with Victoria Pynchon, an accomplished California litigator and ADR expert.  She is a great source of information for people seeking advice in the area of ADR and negotiation, whether IP or otherwise.  Victoria has just posted some information that I think will be of great use to any entrepreneur or start up that is seeking to sell their patent(s) to a larger entity.  Except for very rare circumstances, these IP owners will be at a significant disadvantage in comparison to the company to which it seeks to sell.  This post, entitled “More on Bargaining from a Position of Weakness” should be the first step before any small IP owner approaches the possible purchaser to help them understand how to succeed in the typically highly uneven bargaining process. Specifically, people or companies with IP to sell today are hoping to succeed in a market where there are a whole lot more sellers than there are buyers.  (More on this here.)  These IP owners are invariably negotiating from a position of weakness, which makes the advice set out in the Victoria Pynchon’s blog post not only relevant, but also critical for anyone seeking Continue Reading →

For Inventor of 21 Patents, Patent Troll Litigation Not Very Lucrative

  Recently, I wrote a post on why I think that patent litigation is not a viable business model for inventors.  Given a realistic deconstruction of the costs and possible damage awards, I concluded that, in most situations, it is not realistic for an inventor to presume that she will “hit the jackpot” by suing infringers and extracting settlement or damage awards.  I obtained some pushback from this post, mostly from patent litigation lawyers, who contend that I am wrong in my view that patent litigation does not pay for inventors.  Of course, everyone is entitled to their opinion, and I respect the views of others, however, no one who objects to my (somewhat) negative view of patent litigation as a business model, has provided me with numbers to discount my economic analysis of patent litigation.  This recent post from The Prior Art blog entitled “Revealed! How Much Money a “Patent Troll” Makes” provides some insight into usually confidential inventor returns when dealing with a patent licensing program.  The underlying patents related to GPS technology and were asserted against several prominent technology companies.  The post gives a rare look into the numbers involved obtained in sending “patent licensing letters” to technology companies.  In Continue Reading →

“It’s Not You It’s Them” or “They’re Just Not into You”: Why Being an Independent Inventor is Like Dating

The view that a good idea will result in a windfall for an independent inventor seems to be embedded in the fabric of US culture–perhaps it’s because the patent system dates from our earliest days.  Indeed, a surprisingly large number of people think that getting a patent will result in a large company paying them huge sums of money for the ability to introduce a product covered by that patent.  This belief serves to motivate countless numbers of inventors to spend $1000′s on patent protection, as well as years of hopeful waiting for their patent to exit the Patent Office.  Few ever see their product make it to the marketplace, however. As an attorney at a prestigious IP law firm, I really gave little thought to what my clients would do with their idea once I succeeded in obtaining a patent for them.   My job was to help my clients convince the Patent Office that their idea passed the legal requirements for patentability.  Indeed, my clients came to me for legal advice, not business advice, and they likely would have considered it to be inappropriate if I questioned their motives for wanting to get a patent in the first place.  However, after recently spending time Continue Reading →

A Response to PWC’s "Starry-Eyed" View of the Value of Litigation as Effective Way to Monetize Patents

I recently became aware of this patent litigation analysis prepared by PriceWaterhouseCoopers (“PWC”) (hat tip: Marcus Malek of the Intangitopia blog). The report appears to be rigorously prepared from data obtained from a large number of reported patent litigation cases dating from 1995. I read this report with interest and think that anyone who is interested in the ROI of patent enforcement should read it also. The data provide a wealth of information for anyone even thinking about bringing a patent case or who is involved in defending against claims of patent infringement. Although the data in the PWC provides informational value, I nonetheless have a big problem with the following assertion that is prominently presented on page 18 under the title “What This Means for Your Business”: “In light of the findings in this study, patent litigation appears to continue to be an effective protection and monetization path for patent holders.” (emphasis added) This unqualified statement gets a big “WHAT?!” from me. Tweet This Buzz This Delicious Digg This Reddit Stumble This

The IP Zone: A New Concept for Introducing Needed Information and Efficiencies into the Patent Monetization Market

Many corporations and entrepreneurs today understand that patents are increasingly bought, sold and traded, just like many other assets. However, the patent monetization market is only just emerging and, as a result, few information sources exist today to assist patent owners in selling their patents. The nascent nature of the industry also means that most patent owners do not themselves possess the necessary expertise to successfully monetize their patents. Put simply, today, patent monetization is “easier said than done.” In view of the challenges currently faced by patent owners seeking to generate revenue by monetizing their patents, I was intrigued to learn about the “IP Zone” to be established later in 2009 in the Harlem area of New York City. The IP Zone will be physically located at 125st Street and Lenox Avenue in the Upper Manhattan Empowerment Zone, which was established in the mid-1990′s to provide enhanced job and economic opportunities for the residents of this historically low income area of New York City. I heard about the IP Zone from Tracey Thomas, who is currently Chief IP Strategist at American Express. As Mr. Thomas related the origins of the IP Zone project, under his supervision, American Express has Continue Reading →