Many companies today enter new product or technology markets through acquisition. However, this is far from a sure-fire plan for business success. For example, in 2006, Inc.com reported that 60-70 % of acquisitions fail and more than 90 % of acquired businesses lose value. These somewhat dismal results leave no doubt that acquiring companies need better sources of information to properly vet and select acquisition targets. Of course, companies typically conduct extensive pre-deal research to identify good acquisition targets and use the M & A due diligence process decide whether to consummate the deal. However, such efforts are inherently limited because much about the target will remain unknown until the acquisition is completed. There can nonetheless be no doubt that more sources of relevant information will improve the probability that the acquiring company will make a better decision about completing the deal. Since the degree of competition to
Using Patent Landscaping Analytics to Improve the Quality of M & A Decisions: A Review of Cox Enterprises’ $300 Million Purchase of Adify
Learning from Microsoft’s Hard Trademark Lesson: Your Company Needs a Multi-Faceted IP Strategy
This New York Times article entitled "A New Battle is Beginning in Branding of the Web" demonstrates that companies such as Microsoft and Dell are adopting aggressive Intellectual Property (IP) strategies that include forms of legal protection others than patent rights. The basis of this approach might not be obvious to those who consider these companies "technology companies" at their respective cores. That is, the product lines of Microsoft and Dell (and their counterparts) might more logically be considered by some to be the subject matter for patents, as opposed to trademarks. Nonetheless, the article confirms that more and more companies are reaching outside of the traditional mode of technology patent protection to develop comprehensive IP strategies directed toward creating IP value in multiple dimensions. It is interesting to find out that Microsoft apparently learned the lesson of the need for an IP strategy by almost making a colossal
How to Make Sure Your IP Strategy Plan is Not Doomed to Failure
Smart business leaders understand today that IP Strategy should form a fundamental pillar of their value creation-directed business strategy. By taking a "business eye view" toward IP, forward-thinking corporate managers seek to capture the true value of their company, which today is increasingly measured in the form of intangible assets such as patents, trademarks, copyrights and trade secrets. If you have read this far in this post, you no doubt realize that your company must develop and execute on an IP Strategy in order to maximize intangible asset value. But, IP Strategy is only one part of the process of generating and maximizing this asset value. As an IP and Patent Business Strategist (more info here: The Hutter Group), I have found that even the most robust business-directed IP Strategy is likely doomed to failure if your company does not also establish an IP Culture within your organization. Put simply,
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
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
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
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
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
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
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