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How to Prevent IP Ownership Issues When A Corporate Strategic Alliance, Joint Venture or Open Innovation Project Fails

Technology-focused collaborations form a foundation of today's corporate planning strategies. Such collaborations can be in the form of strategic alliances, joint ventures, open innovation or other legal structures. Regardless of how the participants characterize and legally structure such collaborations, the most common motivation for forming such alliances is to pool technology and R & D resources. When technology and R & D is involved, it must follow that IP ownership issues should loom large in the planning stage of the collaboration. However, my experience shows that the parties rarely give appropriate consideration to IP ownership in the agreements that are supposed to fully set out the rights and responsibilities of the parties. I can say with authority that IP issues are not usually given proper consideration in collaborative agreements because my expertise in this area results primarily from helping clients after their collaborations

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Confessions of a Non-Recovering Patent Troll Enabler

I came across this TechDirt article: Exposing The Patent Troll Playbook... And How To (Almost) Beat It (h/t Ron Carson, VP of Marketing at Innovation Asset Group). This is an insider's account of what it is like to be the victim of a so-called "patent troll". Perhaps better than the article itself are the comments which make it clear how passionate people are about the topic of patent trolls. This is recommended reading, if just for the entertainment value of the comments. Reading the TechDirt article made me recall my time as a junior litigator at a well-known Atlanta law firm. As a very green (and tired) young attorney, I sent many "licensing offer letters" for the AudioFax Company. In this role, I was an enabler of a very successful patent troll. And, as set out in this post, I have continued to enable patent trolls throughout my more

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Response to WSJ Online Article: What Business Owners Should Know About NOT Patenting

Today, the Wall Street Journal Online published an article entitled "What Business Owners Should Know About Patenting". In this article, Stuart Weinberg interviews James McDonough, an attorney at the well-respected Fish & Richardson law firm. Mr. McDonough gives excellent advice about the process of building an intellectual property portfolio. However, he skips over a crucial first step--does building a patent portfolio really create long term value for your business? In many cases, the answer will clearly be "yes". In many other cases, building a intellectual property portfolio could actually reduce or destroy your company's asset value. By focusing his advice on the portfolio building step and later, Mr. Donough ignores the foundation on which your company should start the portfolio-building process. First, an admission: I created a lot of value for myself and my law firm partners over the years by obtaining patents that did not ultimately create business value for

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The Problem with Patent Due Diligence in Mergers and Acquisitions and How to Fix It

As a business or investment professional involved in mergers and acquisitions ("M & A"), are you conducting patent due diligence according to the standard practices of your M & A attorneys and investment bankers? When patents form a significant aspect of the value of the transaction, you are probably getting incorrect advice about how to conduct due diligence. The due diligence process must take into consideration the competitive patent landscape. If competitive patents are not included in your vetting process, you may be significantly overvaluing the target company. In my many years of intellectual property and patent experience (more info here: http://www.jackiehutter.com/), I have been involved in a number of M & A transactions where patents formed a significant portion of the underlying value of the deal. As the patent specialist on these transactions, I took direction from highly compensated M & A attorneys and investment bankers who were acknowledged

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Technology Start-up Entrepreneurs and CEO’s: If Your Goal is Investment or Acquisition by a Big Company, You are Probably Patenting the Wrong Things

Do you treat your patents as a fence or a tollbooth? If you wish for your start-up technology company to obtain investment from or acquisition by a bigger player, you had better understand the difference. Most start-up technology company entrepreneurs and CEO's understand that patents can be key to establishing the value of a new business idea. Typically, entrepreneurs and CEO's such as yourself will engage patent attorneys to build an IP portfolio that protects the start-up's technology and products to the fullest extent possible. The motivation for this effort and expense is, of course, to to protect your start-up's idea from use by others. As management of a start-up you may be seeking to build an ongoing business around the patented technology, but often the goal of building a solid patent portfolio is to make your business an attractive target for investment or acquisition by a larger company. As an intellectual

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Recent BusinessWeek Article Confirms that Energy Innovation is Rampant: Why These Innovations Should be Patented

This current BusinessWeek article entitled "The Real Question: Should Oil be Cheap?" confirms that innovations directed toward energy savings are rampant in these days of high energy prices. Specifically, the article states that "[h]igh energy prices [] water the flowers of innovation, making investments in alternatives pay off . . . ." As I wrote in this blog previously, along with such innovations comes the opportunity for savvy corporate managers to obtain exclusive rights to these energy usage improvements by developing and executing on patent strategies that prevent their competitors from benefiting from their investments in innovation. Moreover, as I wrote in this blog post, I believe that The Pickens Plan will open the floodgates of patenting in the area of wind energy and turbine technology. I realized after writing these blog posts that some people might find the idea of patenting energy innovations distasteful. Such a perspective

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Innovators: Make Sure Your Company Owns the Fruits of Your Open Innovation Projects

In case there was any doubt, this New York Times article of July 22, 2008 shows that Open Innovation is "hot". And it is not just consumer products companies that have jumped on the bandwagon: companies such as HP, IBM and Microsoft have reportedly embraced the Open Innovation model. But, did you also know that, if your company is not careful, you could end up sharing patent rights to any inventions resulting from your Open Innovation collaborations? If you are going to play in the Open Innovation game, you must also understand how to prevent collaborators outside your company from owning the fruits of your company's innovations. This is a very easy issue to address on the front end of the Open Innnovation process and should be standard procedure for any innovation professional. However, as detailed by Greg Daines in his Ideanomics blog, intellectual property strategy is not

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It’s All About the Numbers: SuperCrunchers of Patent Data will Gain Competitive Advantage

A recent book entitled Super Crunchers: Why Thinking-By-Numbers is the New Way to Be Smart (available at http://www.amazon.com/Super-Crunchers-Thinking-Numbers-Smart/dp/0553805401) presents an intriguing perspective of how forward-thinking companies can use the wealth of data available today to obtain an edge against competitors. The book, written by Ian Ayres, an econometrician and law professor at Yale University, posits essentially that he who crunches the available data will come out ahead in this modern world of massive amounts of data. A detailed review of this book from Newsweek is found here: http://www.newsweek.com/id/40860. The "Super Crunchers" premise applies strongly to the world of patents. Indeed, when leading companies such as P &G, GE and others engage in multi-faceted corporate intelligence programs, it cannot be a controversial to contend that those companies that mine and apply the results of data analysis of both their own patent portfolios and those of competitors will obtain valuable information

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50% of Money Invested in Venture Capital is Lost: The Right Patent Analytics Can Improve These Odds

According to this article by Arlene Jacobius in Pension and Investments Online, 50% of all investment in venture capital is a loss. This article, which is based upon separate research projects by a Chicago Graduate School of Business professor and a former Chief Economist at the SEC, indicates that the actual return on venture capital investment is not much different from the average annualized returns on the smallest NASDAQ stocks. In particular, the return on venture capital investment from 1987 to 2001 in these smallest stocks was 62% as compared to the 59% mean return of venture capital funds. This 59% value certainly does not reflect the investing public's general perception that venture capital return on investment markedly outweighs what one can obtain on the stock market. And, it is this apparently erroneous assumption of perceived higher return that presumably justifies the risks associated with venture capital investment by

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Prediction: The Pickens Plan for a Green Energy Infrastructure will Launch a Gold Rush of Patenting Followed by Rampant Patent Litigation

The day after I posted this about patenting green energy innovations: Corporate Managers: Are You Failing to Obtain Maximum Value from Your Energy Savings and Green Innovations by Ignoring Patent Issues?, multi-billionaire oil man T. Boone Pickens announced The Pickens Plan. This plan, if successfully implemented, will constitute a giant step toward reducing America's dependence on foreign oil by embracing domestically-produced green energy as a significant source of America's power. To show he is serious about this plan, Mr. Pickens intends to spend $58 million of his own money to publicize it and, if the number of radio commercials I have heard about his idea in the last week is any sign, he is well on his way to spending his advertising budget. In the last week, much has been written, both laudatory and critical, about The Pickens Plan. You can check out some of the articles indexed by

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