100 not out

Over the past two decades, IAM has interviewed the industry’s leading personalities, analysed the biggest companies that dominate the patent landscape and dug deep into the hottest IP trends. To celebrate our centennial issue, we invite some of our past cover stars to reflect on their time in the spotlight and offer insight into the market’s – and our own – evolution

In the 17 years since IAM was founded, we have covered the dynamics of the global IP market like no other title.

In that time we have morphed from a bi-monthly magazine into a digital-led information platform with breaking news, analysis, comment and in-depth features; launched a suite of directories including the Patent 1000 and the Patent Strategy 300; and built a thriving events business led by our flagship IPBC conferences. With our roots in London we have grown a dedicated reporting team that covers the entire globe, with people on the ground from Washington DC to Hong Kong.

Now, we are taking the next big step in the IAM lifecycle and moving from paper to fully digital form. But it was print that kicked it all off and what better time than our 100th issue to look back on how IAM has covered the market and set the agenda for the use of intellectual property as a driver of value for companies worldwide.

Over the course of IAM’s lifetime we have tracked the progress of some of the world’s largest rights owners – including Microsoft, Google, Philips and Ericsson – and charted the rise of China as an IP powerhouse, the recent relative decline of the United States in the global market and the globalisation of patents in general. We have followed the growth of NPEs, such as Intellectual Ventures (IV), and reported on the ebbs and flows of investment capital in the space.

What was in issue 1?

IAM 1 cover“For too long, intellectual property has been covered only as a subject that is of interest either to science, or to the legal profession,” Joff Wild wrote in the welcome note to issue 1 of IAM. “But while the law is clearly a vital issue, there is surely much more to it than that. Over the coming years, IAM will be exploring just how IP can, and indeed should, be seen as a significant corporate asset that has the potential increase profitability and enhance shareholder value.”

Those opening words set the tone for the next 100 iterations, with issue 1 hitting on many of the themes that would come to dominate IAM’s reporting.

The cover story looked at the evolution of tech transfers in the United States and how a handful of US universities and research institutions had generated highly sophisticated models for monetising their innovations, generating hundreds of millions of dollars in the process. There was a profile of the IP function at Unilever, analysing how it managed its giant portfolio of patents and trademarks, while another feature focused on the challenges facing brand-name pharma in protecting IP rights while facing hostility from politicians and the public.

The issue also included a piece examining share price movements in the aftermath of IP licensing deals being announced, which showed that “the markets attach a premium to licensing activity”. And in a prelude to what was to come in the IP sector in the form of giant licensing programmes in the mobile telecoms space, the final feature took a deep dive into how Lucent was leading a “telco revolution”, in which more companies in the sector were starting to view their intellectual property as sources of revenue, rather than merely defensive tools.

“I hope you will agree we have created something more than a little bit different from other IP magazines,” Wild wrote at the end of his welcome. It is a message that is as true today as it was then.

To tell this story we invited industry leaders who have previously graced the cover of IAM to share their experiences of the media spotlight and their reflections on how the market has developed.

IAM has been at the forefront of important subjects for a long time,” declares Sherry Knowles, the former chief patent counsel of GSK who, in issue 50, was named as one of the 50 people and companies to have shaped the IP market. “It has been a showcase for some of the thorniest matters and from 2003 to today we’ve certainly had our fair share of them.”

Saved by the bell

The way that Carol Beckham remembers it, she and her team were for the chop. “We were pretty sure we were out of the door,” she recalls. But as luck – or some very astute PR planning – would have it, Beckham and the other members of the senior leadership in BellSouth’s IP team, including Scott Frank and Michael Bishop, had recently granted an interview to Joff Wild, IAM’s editor in chief and founder. Together the trio appeared on the cover of issue 21 in early 2006 under the headline “The making of a cash machine”.

It was a classic IAM story of how an underdeveloped IP function had been re-engineered as its company learned to appreciate the growing importance of intangible assets as a strategic advantage and revenue generator. “BellSouth Intellectual Property is a three-company operation that in under 10 years has grown from almost nothing to become an operation that now files dozens of US patent applications annually and helps generate hundreds of millions of dollars for BellSouth’s bottom line,” the article explained.

Along with Frank and Bishop, Beckham was a key player in that evolution. The IP function also benefitted from a big internal champion in Keith Cowan, who was effectively the third in charge at the company and, as Beckham remembers it, wanted the IP team’s story “out there”.

The piece coincided with a far wider narrative – the acquisition of BellSouth by AT&T, which represented a massive shake-up of the telecoms landscape in the United States. The combined business would take the AT&T name but while Beckham and her colleagues worried that they would be cut in favour of the legacy IP team at the telecoms giant, it was the BellSouth group that survived.

Once the issue hit desks the article was circulated among senior leadership at AT&T – Beckham believes that this contributed to the decision to keep her and her colleagues. “We sent it to them but we didn’t think they would care,” she admits. “I think it caused them to take a better look at us which they may not have done had the article not been published. There was so much chaos at the time [of the merger] that I don’t think they would have taken the time to do some in-depth analysis and figure out which group was doing the best.”

While Frank still heads AT&T’s IP group and Bishop is its general counsel, Beckham retired in early 2011. She now dabbles in consulting work and stays actively engaged in IP matters through organisations such as the Gathering and, more recently, as executive director of the Georgia Intellectual Property Alliance, an organisation which is chaired by Frank and includes Cowan among its leadership.

She remembers reading IAM from the start, when she and her BellSouth colleagues would share their single copy around. “IAM was the standard and it was about the only international IP magazine at the time,” she reflects.

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Joining the club

As well as throwing the spotlight on how large corporate patent owners were changing their view of intellectual property as a creator and driver of value for their wider businesses, IAM also helped to bring a generation of business leaders to the fore. These included individuals such as Beckham, Bishop and Frank, who were comfortable talking about intellectual property in business terms, not simply as an asset framed in law. Many who reached the top of the industry – and onto the pages of IAM – such as Ruud Peters from Philips and former Ericsson chief IP officer Kasim Alfalahi, who is now the head of Avanci – did not train as lawyers. Others combined their legal training with business savvy and discovered like-minded individuals among IAM’s subscribers.

“I gravitated to IAM because it was written for a group of people who were dealing with the same issues I was and trying to think through the implications from a business, policy and legal perspective,” recalls former Microsoft IP head Horacio Gutierrez, now head of global affairs and chief legal officer of Spotify.

“[Before IAM] there wasn’t really a place where the thought leaders and practitioners in the field could read about each other, read about the deals and read about the business side of intellectual property,” he adds.

Gutierrez has the honour of having appeared on IAM’s cover, written an IAM cover story (in 2011 on the potential of cloud technology) and been crowned our inaugural market maker in 2014. Before being appointed as the software giant’s IP chief in 2004, he was the head of law and government affairs for Microsoft in Europe, where he started to see intellectual property rise up the agenda.

Gutierrez remembers seeing people march on the streets of Brussels in favour of protection for computer-implemented inventions while others rallied against them.

“For me it became clear that the issue had really reached the mainstream from both a policy and business standpoint back in the early 2000s when we started discussing the patentability of computer-implemented inventions,” he explains.

After he was appointed to helm the IP function, taking over from one of the industry’s leaders in Marshall Phelps (whose time at Microsoft was featured in issue 2), Gutierrez focused on what he calls “professionalising the IP function” and giving it “a set of business tools that we would borrow from other disciplines”.

It was this professionalisation that became a big part of the story that landed the Microsoft IP supremo on the cover of IAM in a piece written by David Kline in 2009. Underpinning the shift was a far greater use of metrics to determine the contribution made by the software giant’s IP assets to the wider business – a topic that Gutierrez would also return to when we made him our inaugural, number one market maker.

“As soon as I started [in the role], it became clear to me that a lot of decisions were being made based on subjective criteria and perceptions instead of using more practical, analytical means,” he outlines. “I saw an opportunity to deploy tools and frameworks from the worlds of finance and technology and other areas to help the organisation evaluate opportunities and value assets in a far more objective way.”

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The Dutch touch

Much like Gutierrez, former Philips chief IP officer Peters came to IAM because he found a publication that was speaking his language. Having worked his way up to become chief IP officer in 1999, he oversaw the transformation of the Dutch company’s IP function, which he says entailed “business-driven IP management, IP value creation and the professionalisation of the global IP function”.

It was a shift that would hand Peters responsibility for the group’s own profit and loss account and would see him reporting on his team’s progress to Philips’ board of directors on a quarterly basis.

The company’s approach to intellectual property tallied perfectly with IAM’s focus, Peters recalls. “IAM came out with an emphasis on the business use of intellectual property, rather than the legal aspects and that for me was great.”

Like BellSouth’s transition and the professionalisation of Microsoft’s IP team, Philips’ evolution into an IP value creation heavyweight was tailormade for a big splash in the press and Peters landed on the IAM cover in 2008 with the headline “Dutch power”. Few companies then had – or even today have – the same approach to intellectual property, with responsibility for generating a significant return for the business and answering to the top echelons of management.

“We were quite unique,” claims Peters, “and I think we’ve seen relatively slow progress in that direction since. Most IP departments have not been able to translate what they do into financial terms.”

Peters’ push to change the IP agenda at Philips was helped by the fact that he had a strong internal champion in his boss, who was the chief technology officer and head of R&D. But his rise was also helped by the fact that he was prepared to talk to the powers that be in language they understood.

“Company leadership and boards of directors are focused on a business’s goals and those goals are expressed in hard data, in financial terms, and if you can’t show the importance of intellectual property in those terms then it remains a difficult story to tell,” he maintains.

While the progress of intellectual property up the corporate ladder has by no means been linear – if anything, it has arguably plateaued of late – the efforts of Phillips, IBM, Microsoft and other companies to treat it as a business asset has also led to patents, in particular, receiving far more media attention. For some, that scrutiny has not been particularly comfortable.

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In the spotlight

Throughout IAM’s 100 issues, few if any businesses have attracted the same level of attention and intrigue as IV. The giant NPE co-founded by former Microsoft chief technology officer Nathan Myhrvold was created just three years before IAM launched and transformed the way that ideas and patents were ultimately monetised. In the process it raised hundreds of millions of dollars, acquired thousands of assets, spun off a string of tech businesses and provided a plentiful supply of fodder for the patent market grapevine.

“Go to any IP bar functions or meeting of the Licensing Executive Society and the lead topic of gossip rumbling around the edges of the meetings is Intellectual Ventures and its supposed evil plans,” a 2006 IAM cover story recounted. Given that it had hundreds of millions of dollars to invest and that its top ranks contained a group of undisputed industry leaders, it was no surprise that IV cast a looming shadow over the market. There simply was no other business through the 2000s hoovering up patents quite like the Bellevue, Washington state-based NPE.

But the intrigue was not helped by the fact that IV rarely, if ever, played ball with the media, almost never granting substantive, on-the-record interviews with its leaders. That made the issue 19 IAM cover story in 2006 – for which Myrhvold and fellow co-founder Peter Detkin agreed to be quizzed – all the more special.

When he was in-house at Intel, Detkin was one of the first senior figures in the industry to be given a budget for patent acquisitions, which he used to add key strategic assets to the company’s portfolio. His started with $10 million, which was expected to last him several years. “It was an unheard of concept and there was no market out there,” he recalls. “And then IV comes along and not only 10x’ed that, we 100x’ed that.”

While Intel and a few others in the high-tech space had dabbled in acquiring patents, it was – as Detkin points out – IV’s financial firepower that marked it out from previous deal making and did more than anything else to create a secondary market for patents. For a title focused on the status of intellectual property as a strategic business asset, IV was always going to loom large in the pages of IAM.

“I do recall thinking when IAM started that IV was going to be the main beat,” Detkin says. The IV co-founder reports that he was unfazed by the glare that IAM and other titles brought to the likes of the giant NPE. “There have been reporters who misunderstood what IV was trying to do and at times the coverage felt one-sided, but there are no regrets there,” he comments. “We shared our stories, kept faith in the model, and did the work – and we’re still here doing it today.”

But the coverage of IV by the wider media over the past 20 years highlights what has proved to be one of the most controversial topics in the patent community – the role of NPEs. They became the favourite targets of large parts of the tech press, which continues to cast them as a block on innovation and as placing a tax on the true inventers of the high-tech world. And none came in for more scorn than IV.

As a specialist IP title, IAM has engaged with and reported on all parts of the stakeholder community, and while it has at times been critical of NPEs, it has not looked to demonise the likes of IV.

Brian Hinman – who, like his predecessor Peters, also featured on an IAM cover (issue 83 in 2017) – admits that the IP industry has not always had an easy time of it with the media. But he gives IAM credit for trying to chart a middle course. “I think you guys more than any other media have played a neutral role,” Hinman comments. “You let the patent ‘trolls’ get their word out, you allow the pro-patent companies to communicate their message, and then the Googles and the Oracles, you let them get their perspective in.”

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Back to the future

As well as asking our former cover stars to look back on their interaction with IAM and the evolution of the market in general, we asked them how they thought the big issues confronting IP owners might develop and what we would be writing about in 2030.

For Gutierrez the main focus should continue to be the role of intellectual property in the digital economy. “Business and technology have developed at such a pace that they have really left behind some of the IP legal structures that were built for the world in the first half of the 20th century. In the world of patents, we have seen cases grapple with subject-matter eligibility. In copyright, Spotify and others in the industry advocated for the Music Modernisation Act, which was designed to adapt the IP regime of licensing music to the world of the Internet because the old system did not serve the needs of music creators or digital music services. Getting that passed was a positive step, but by no means the only step that is needed.”

“I think you will continue to see the IP legal and business structures adapting to match the realities of the Internet economy,” Gutierrez adds.

Rather than predict the future, Detkin says that he has three big hopes for the market, which boil down to improved patent quality, more coherent policy around SEPs and standard-setting organisations, and a more uniform approach to determining damages in infringement suits. “Improving patent quality would go a long way to people generally having more faith in the system,” he says of his number one wish.

As a former patent head in the pharmaceutical industry and someone who continues to consult for many life sciences clients, Knowles also frames her main forecast around a big hope for the patent community. “I’m going to hope that industry has got together, made compromises, seen each other’s views and supported legislation in the United States that will once and for all fix this patent eligibility issue,” she says.

With legislation focused on subject matter eligibility still on the agenda for the US Congress, it seems safe to assume that the ins and outs of patent reform will continue to be a hot topic for IAM and its readers for years to come.

In the shorter term there is also the ongoing impact of the covid-19 pandemic and the likely economic downturn that will follow. Detkin cautions that it is still too early to tell how a wider economic crisis will affect intellectual property, but he highlights that it has performed relatively well in previous recessions.

“In recessions generally intellectual property is strong because people tend to focus on what they’re good at,” he comments. “From a licensing perspective the dollars will be down but in terms of investing in intellectual property, the good companies know that you have to invest in a recession, you can’t save your way through, and that means investing in research which by definition means investing in intellectual property.”

How the next few years unfold will surely have a huge impact on the stories being reported on by IAM in 2030. “This will be a decade marked by significant change and hopefully thoughtful legal reform,” Gutierrez enthuses. One thing is for sure, there will be plenty more stories from the giants of the industry on the – now digital – pages of IAM.

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