Mark Kokes - the final interview before he departed BlackBerry head of IP licensing role 06 Oct 17
Last month we broke the news that BlackBerry VP of IP, licensing and standards, Mark Kokes, had unexpectedly left the company in mid-August, without a replacement being named. Last week the company released its latest quarterly figures – showing a big jump in licensing revenues – but made no mention of Kokes’s departure. Given the comments CEO John Chen has made about the importance of sustainable IP income to BlackBerry’s future, that might be seen by some as a bit of an omission, but clearly senior management does not believe his exit is something that investors need to know about.
In the IP market, though, Kokes was undoubtedly a player. He re-engineered the BlackBerry IP strategy to focus it squarely on monetisation and had begun to do some eye-grabbing deals. As a result, he was due to feature as one of our 40 IAM Market Makers of 2017 in the recently-published issue 86 of the magazine – though we pulled him from the list once we found out he was no longer with BlackBerry.
However, that was not before Kokes had sat down to do an interview that was to feature in our write-up of this year’s ranking. It did not run in issue 86, for obvious reasons, but following is what had been put together on the back of what he told us. In retrospect, it makes for fascinating reading; not least, this bit: “I have had quarterly targets from day one. I hit a lot of them, but not all. This market is bumpy.” It’s unlikely that we will ever find out why Kokes left BlackBerry, but maybe that had something to do with it.
The brief is clear, explains Mark Kokes, senior vice president of intellectual property, licensing & standards at Blackberry: “My mandate is a simple one - monetise the BlackBerry portfolio using every means possible. That’s pretty far-reaching.”
It’s a task he has been performing with gusto – mostly under the radar. Since Kokes’s arrival in 2014 the company has secured well-publicised royalty-bearing agreements with the likes of Cisco, Canon and International Game Technology, while it has also launched suits against companies including Nokia, Avaya and BLU. On the sales side, meanwhile, patents have been transferred to Centerbridge Partners and Chinese mobile company Oppo, among others. Most transactions the company does, though, are not made public. The ones that BlackBerry does talk about, says Kokes, are “to let people know that we are operating in certain verticals”.
What makes the BlackBerry portfolio so potent, he continues, is the breadth of what it reads on. “Our patents cover multiple technologies – maybe 40 plus,” Kokes states. “We have depth in areas like smart grids, gambling, manufacturing, mobile communications, radars and tracking, logistics, and many more.” And no stone is left unturned: “I have 24 PhD level people constantly mining the portfolio looking at new verticals. They have very diverse backgrounds and know what is going on in a wide range of technologies.”
A non-lawyer with an engineering background, as well as the holder of six granted patents, Kokes came to BlackBerry from InterTrust, where he gained in-depth experience working across the transactions spectrum. “We were bundling IP deals, doing IP investing. I got to play the venture capitalist and was on the management team of 15 portfolio companies,” he explains. “No-one does this stuff better than InterTrust.”
BlackBerry happened to be one of his clients and Kokes saw an opportunity to generate more work: “I had just done a deal with them and that gave me a lot of insight into the company, which led me to formulate some ideas about other things they could be doing. I decided to pitch them to see if they were interested. I was introduced to [CEO] John Chen and chatted with him as well as other executives, and they invited me to go in-house to do what I had proposed to do as an agent.”
On joining, Kokes’s first job was to reconfigure the BlackBerry IP function. “We built the licensing team from scratch and expanded the prosecution team, while consolidating the number of outside law firms we used,” he explains. That took a year and then it was all systems go: “We were ready to launch our programmes and we have been doing deals for just over two years now.”
On the licensing side, in terms of deal structure it is very much a case of patents plus, Kokes says: “In the majority of transactions we have done our partners have benefited from our portfolio and also from other BlackBerry products and services. That’s the way we like to do it. We are very reasonable and can bring real value.” He is, he states, opposed to a shoot-first, ask questions later approach: “We are not a litigation-driven operation; it’s a model that is dated. However, we have to be able to defend our rights and we are not afraid to litigate.”
But there is a lot more to the operation than straight monetisation. For example, BlackBerry now has an IP services business. “This does standalone advisory work and helps our partner businesses. It gets us a ton of additional visibility,” Kokes says; while other things are going on that he is less keen to discuss in depth. “There is a ton of private equity liquidity in the market right now. Many of the large institutions and the bulk of the family funds are looking at IP as a way to diversify their portfolios. And that is part of our secret sauce,” Kokes states, before refusing any further comment.
As he goes about his work, Kokes knows that he is being watched from the very top. “I speak to our C-suite on a regular basis, but only very rarely attend board meetings. Pretty much everyone at that level knows what I am doing in detail,” he explains. Company CEO John Chen has put patent licensing at the heart of BlackBerry’s future and Kokes knows he has to deliver: “I have had quarterly targets from day one. I hit a lot of them, but not all. This market is bumpy.”
Like most senior corporate IP professionals, Kokes is often on aeroplanes travelling the world to build relationships and close deals. “I spend equal time in the US, Asia and Europe. In telecoms and mobile we are seeing a shift to Asia and to a lesser extent Europe; but if you look at it holistically it doesn’t matter where you are. There are equally lucrative verticals with applicability in different places.”
China gets a special mention - “We have had tremendous success at IT licensing there with the approach we have adopted.” – as does the US, though for less positive reasons: “The legal environment has changed dramatically. If you look at it from an asset perspective at a minimum you’d say that values are suppressed – even for high quality ones.” But overall Kokes is optimistic: “Innovation and having IP-centric economies is the right way to go. They are getting a lot more entrepreneurial in China and in parts of Europe, just as things are declining a little in the US.” But despite some head-winds his philosophy is very simple, he concludes: “If you are creative enough you can build your own markets.”
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