Future watching, convergence, US optimism, UPC doubts and more: Day Two IPBC Global 2017
After two and a half jam-packed days, IPBC Global 2017 has finally come to an end. Before IAM’s editorial team splits up to return to London, Hong Kong and Washington DC, we will offer a few bold predictions about what’s to come in the IP market over the next year in asdvance of us all coming together once more next June for IPBC Global 2018 in San Francisco. North America editor Richard Lloyd (RL), Asia editor Jacob Schindler (JS) and senior reporter Sara-Jayne Clover (SJC) get out their crystal balls and also report on other key take-aways from the conference’s final day…
Stars of the show – This morning saw the 2017 inductees into the IP Hall of Fame formally inducted in a ceremony held in their honour. While the Hall of Fame may be difficult to enter, once you are there you’ll find the reception very warm, and a number of past inductees and Academy members were in attendance to welcome and support their new colleagues. Among this year’s inductees was Carl Horton, who sadly passed away at the end of last year aged only 52. Collecting the induction certificate on behalf of the Horton family was Carl’s brother Ken. He made a deeply moving speech in which he gave just a few examples of how Carl had used his life to try to improve those of others, both in his professional and personal capacities, and followed it with a video in which Carl shared his desire for society to keep improving the human condition using innovation which, as we all know, will only happen with the support of the IP system. If ever there was a perfect example of what the IP Hall of Fame was established to recognise in the IP community it was there in that moment this morning. (SJC)
Possible comeback – One of the features of recent IPBC Global events has been a distinct pessimism in relation to patent rights in the US. But according to IPWatchdog’s Gene Quinn that might be coming to an end. Speaking on the US pendulum panel in the afternoon Quinn said that he was, “more optimistic than I’ve been at any point in the last five years”, adding that he expected the tone to be very different at next year’s IPBC Global. He added some context, pointing out that there was a feeling among many delegates that things couldn’t get much worse and he sensed that the current climate might be “the dark before the dawn”. Quinn pointed to a series of possible court decisions from the Supreme Court and Federal Circuit involving IPRs as one potential source of optimism. This may well turn out to be the case; but it's also worth remembering that delegates have been looking for US silver linings at IPBC Globals for several years now. As yet, the hope has not turned to reality. Maybe this time, though, it will be different: Quinn is a realist and if he is feeling upbeat, change really could be on the way. (RL)
Crystal balls – IAM planned Tuesday’s second plenary session – 20/20 vision – in the hope of provoking speakers and audience members to make some bold predictions about where they see the IP market heading. They did not disappoint. Each panellist was supplied with a crystal ball by TechPats president and moderator Marek Wernik and each wrote a prediction for the next three years, sealed it in a box, and pledged to reopen it at IPBC Global in 2020, wherever it may be.Tgis is what was forecast:
- Heath Hoglund, Dolby: The UK will not Brexit, and will be part of the UPC within three years.
- Jim Skippen, WiLAN: There will be fewer US patent suits filed in 2020 than in 2017.
- Murali Dharan, IPVALUE: US patents filings will be in secular decline, and US law school admissions for patent lawyers will be down from 2017.
- Ilkka Rahnasto, Nokia: By 2020 we will see new, innovative IP business models.
- Kurt Brasch, Uber: Automotive will become the new smartphone space, and the sector will have its own Nortel. (JS)
Challenge of the new – One of the effects of technological convergence is that many sectors are now seeing the kind of advances that have long been the preserve of the high-tech space. That shift was highlighted in the ‘Meeting the convergence challenge’ plenary session by Microsoft’s Erich Andersen. “All of us in IT are used to dealing with computers, connectivity and interoperability, but there’s a whole world out there that’s really just starting to adopt this technology,” he remarked. Fellow panelist, Monica Magnusson of Ericsson, highlighted some of the areas where this is happening. The Swedish telco, she revealed, is collaborating with mining companies to connect equipment so that it can be operated remotely underground and is also working on remote surgery so that doctors can carry out operations hundreds of miles from isolated areas. As her examples show, the opportunities presented as technologies come together are boundless, but that also throws up some interesting questions around IP licensing in new sectors. As well as not being accustomed to the high levels of connectivity that convergence and the development of the Internet of Things promise, many industries are unused to sophisticated IP licensing or even any licensing at all. That poses challenges for members of the licening community as they try to work out how to do deals with a new universe of businesses which might be reluctant to start paying royalties. Given the problems we’ve seen in some tech sectors that boast sophisticated IP expertise, a few bumps in the road seem likely - patience, empathy and skilled negotiaiton are going to be vital attributes for big players in the IP market over the next few years. (RL)
What not to do – As Erich Andersen said this morning, open source is mainstream – but it does involve choices. It has never been easier to bring open source software and technology into your business and keeping track of the various rights and licences involved is a very basic part of IP managmenet. But, panellists agreed, it is often neglected, even in major organisations. “I’m amazed how disorganised some large companies are when it comes to these issues,” said Rovi’s Courtney Quish. The definitions of open and proprietary have become somewhat muddied, added ABB’s Bruce Shelkopf. The good news about technology convergence, he noted, is that “the IP department just got a lot more important”. One risk however, is that in addition to its traditional status as a cost centre in most companies, the IP function is now also potentially a “rights lost” centre. That should drive home its importance to CEOs, but will also ramp up pressure on IP managers. (JS)
Patent power – Mark Twain’s quote “The rumours of my death have been greatly exaggerated” can be well applied today to utility patents, remarked Microsoft’s Erich Andersen in this morning’s session on meeting the convergence challenge. There has certainly been a buzz surrounding the potential decline in the importance of patents in favour of other forms of IP such as trade secrets, but Andersen urged delegates not to get too carried away. Patents are there, facilitating the collaboration and cooperation that we are witnessing at increasing levels in this age of convergence, he noted. So, while there is a sound argument for innovators taking an holistic approach to IP strategy, we should borrow another well-used phrase and not rush to throw the baby out with the bathwater just yet. After all it does not automatically follow that just because IP rights are growing in importance patents ahve to be in decline. (SJC)
Jumping in – As noted previously, the second plenary of the day, ‘20/20 vision’, was all about predictions as the panelists weighed up how the patent market might change over the next three years. There were many bold forecasts made including one from Uber’s Kurt Brasch around a possible growth in the popularity of patent pools. From their 2000s heyday pools have largely fallen out of favour as a mechanism for quickly and efficiently licensing a market and helping to promote widespread adoption of a particular technology. But, said Uber's head of patent transactions, that may change. "Now is the perfect time for pools and in 2020 the licensing environment will be much more pool based,” Brasch asserted. He cited transparency and certainty over price as big pool benefits. This enables manufacturers to easily factor in the cost of licensing when pricing their products. But not everyone was totally sold on the idea. IPVALUE’s Murali Dharan observed that pools are by no means a panacea for ecverything and everyone; while WiLAN’s Jim Skippen cautioned that although pools can work well for large operating companies, for smaller players - whose rights may get lost within a poiol or substamtially undervalued - they may be far less appealing. (RL)
More people – One of the biggest trends in licensing is that deals are rarely just about patents anymore. Instead, they often include some element of technical collaboration. One of the consequences of that is that once the ink is dry on an agreement, you can’t simply move on to the next one. Douglas Naab of General Electric told attendees at this afternoon's Doing brilliant licensing deals masterclass that 10 years ago once he signed a deal he didn’t have much of a relationship with the counterparty other than tracking their income. That has changed, he said; for most of the deals he has done over the last couple of years, he still has almost weekly conversations with the other side. That has benefits and drawbacks. “It’s great for forming a relationship and setting up the next deal”, Naab said, “but it’s also very time consuming. You almost need another layer in your organisation to handle it.” Naab explained that ongoing conversationis especially relevant to the agreements GE has made in China. As broad technology deals – and Chinese relationships – become increasingly common, IP executives may find themselves asking the board for more human resources to manage these complex relationships. (JS)
European doubts – The perfect storm has been brewing in Europe for some time now, as the unified patent system teeters on the edge of implementation and faith in the US patent environment has waivered, so making other markets look increasingly appealing. With the UPC Europe had looked set to emerge as a highly competitive, dynamic patent market in which greater opportunities to monetise IP would exist. But last June’s Brexit vote has cast this bright prospect into some doubt and left those invested in the future of Europe’s patent market asking what lies in store. In this afternoon’s breakout addressing Europe’s changing landscape the panel questioned how a country set to leave the EU can possibly particopate in a unified court system in which the Court of Justice of the European Union is set to have an important role. No definitive answers were provided; perhaps because right now there aren't any - especially after the UK's recent general election left the Conservative government without a majority. It's no surprise that around the conference, many people were saying that they now expect significant delays to the UPC coming into force - if it ever does in its presently planned form. (SJC)
Old hands – The over-arching theme of this year’s IPBC Global has been ‘Meeting the convergence challenge’ and so managing the interactions between different sectors not surprisingly crept up in numerous sessions. For many companies this presents new challenges, but as Orin Herskowitz, head of Columbia University’s tech transfer office, pointed out in the Doing brilliant licensing deals masterclass, universities have been living with convergence for years. As he highlighted, research typically brings together different fields of expertise to work on very early-stage innovation which can lead to “some crazy mash ups”. It also means that university discoveries are often licensed to a broad range of use cases. In one example, Herskowitz referenced licensing of a brain/computer interface which he said had been licensed for sports analytics, as well as medical diagnostics. The challenge of this kind of multifacted technological application, he concluded, involved how to price the innovation and in determining whether you would be able to charge a royalty at all. (RL)
Being brilliant - In one of the final sessions of this year's IPBC Global a sizeable audience turned up to receive a masterclass on being a brilliant in-house IP group. What quickly became clear is that one size does not fit all. For WiLAN's COO Michael Vladescu, brilliance is intrinsically linked to revenue generation, and strong, sustainable revenue generation at that. Santosh Mohanty, who heads up Tata Consultancy Group's IP team, argued that the team who integrates IP into a company's value chain is doing top work. We heard from Robertha Hoglund, Elkem's head of IP, that her definition of a brilliant IP group is one which manages to communicate the importance of IP to all colleagues, and most crucially to the corporate management team. Finally, Roger Gobrogge of ITIP ProFiciency, weighed in that the best IP group has the ability to think and speak like a company's business units and ensure that it is well aligned with business strategy. It will no doubt offer comfort to those IP execs looking to shine within their own organisation that there's no one way to do it. (SJC)
PTAB fairness – Malcolm Meeks of France Brevets told delegates in the Policy priorities breakout that there remain major issues with the IPR process that cast doubt on their fundamental balance. Meeks noted that while typical appeals processes must rely on the established case record, he has known PTAB judges to ask questions that are not on that record, and bring up positions that the other side hasn’t mentioned previously. “There’s no consistency or certainty there,” Meeks said, arguing that the 80% rate at which patents are invalidated by the PTAB indicate that there are problems with the system rather than the patents themselves. It’s a reminder that even if the US Supreme Court leaves the PTAB process in place in the Oil States case, as many here are predicting, there are still going to be major questions around its fairness. (JS)
Welcome Mr Prime Minister – Well, almost. IPBC has shared the Shaw Centre these two days with the University of Ottawa, which is holding its graduation ceremonies in another part of the building. In fact, IPBC delegates may be unaware that they were in the same building on Monday as Canadian Prime Minister Justin Trudeau, who delivered the commencement address to graduates from the Faculty of Arts that afternoon. Trudeau made technology a central theme of his address, telling graduates: “The pace of change has never been so fast, and yet it will never be this slow again. It’s hard to imagine what the future might hold.” He should have popped back again today for this morning’s panel about managing the challenges of convergence. He might have learned something! (JS)
Sharing is caring – Partnerships and cooperations are, more than ever, part of an IP executive’s reality. And if this year’s IPBC delegates and speakers are anything to go by it is something that they are embracing. The virtues of open source platforms and collaborative approaches generally have been extolled far more by attendees this year than previously. Gone, it seems, is the widespread fear of opening up the IP treasure chest and sharing its contents with competitors. What we are seeing instead is a growing appreciation that in a period of rapid change and technological advancement the only way to reach strategic objectives may be to be open to finding some of the solutions to your problems away from home. Those companies that do still hold the view that everything they could possibly need can be found in-house – and that it will be just theirs for the keeping - may be in for tricky times as everything points to the IoT market moving from strength to strength. In the age of convergence, where the aim is for your innovation to not only be adopted by your industry, but also by many others as well, being open to working in new ways and with new partners is key. When IPBC Global 2018 convenes in San Francisco next year, there’s little doubt in my mind that collaboration will be an even hotter topic than it is now. (SJC)
Tea leaves – There have been a whole host of milestones in China over the last year – a Qualcomm suit against a Chinese company, multiple NPE litigations against foreign companies, an SEP injunction and a Chinese firm teaming up with a foreign NPE. We’re going to keep seeing developments like this in the year to come - probably from a wider variety of players, based on conversations I’ve had with delegates during this event. There’s one big piece missing, though, and that is an NPE of any type filing a litigation case against a Chinese company. Someone has to try it eventually. If China is truly going to be at the centre of the patent world, it has to be the kind of place where any patent owner can enforce its rights against any kind of defendant. IP Hall of Fame inductee Gao Lulin, the father of China's patent system, was asked yesterday whether foreign parties should feel comfortable about suing Chinese companies in China; “yes, definitely,” he responsed. Gao and all the other stakeholders in the country's IP system have an immense interest in demonstrating to the world that the courts there are “efficient, cheap and fair”, as he summed it up. So my long-shot prediction for the next year is that a foreign NPE – likely working with a local partner – puts that characterisation to the test and seeks to enfiorce its rights against a local operator in a Chinese court. (JS)
Change, but no revolution – Since a few weeks ago when the Supreme Court granted cert in Oil States Services, a case which challenges the constitutionality of inter partes reviews (IPRs), speculation has mounted over whether IPRs will even exist in 12 months time. My prediction for the next year is that SCOTUS will not undo them, but that at the next IPBC Global in San Francisco, we will be talking about some significant difference sin the review process. As well as granting cert in Oil States, the US’s highest court has also taken a second IPR-focused case, SAS Institute v Lee, looking at whether the Patent Trial and Appeal Board should issue a final written decision on any claim challenged by a petitioner. The Federal Circuit is also due to issue its decision in Aqua Products, which addresses the particularly controversial topic of claim amendments. Depending on how those cases turn out, the PTAB might appear a lot more favourable to patent owners this time next year. (RL)
Goodbye and au revoir – And that’s all from Ottawa. This city and the many top IP executives who make their homes here have proven to be fantastic hosts for the 10th anniversary of the IPBC conference. A huge thank you to them, to all of the delegates, speakers and sponsors who made the trip - and to all the many Tweeters who kept a running commentary on what was going on. We’ll see many of you in Tokyo for IPBC Asia this October 29th-31st, and IPBC Global will be back for the start of its second decade at the Palace Hotel in San Francisco from 10th to 12th June 2018.