My grandfather’s watch

While US lawmakers consider legislative reform of the patent system, the LES Standards initiative has been launched with the intention of bringing conscientious self-regulation to the IP transactions marketplace

When my father passed away two years ago, I inherited a pocket watch that had belonged to his father, which my father had kept in a dusty drawer in a bureau in his home for decades. It had stopped working before my father was born; the crystal was cracked, the face was faded and the stem had been mangled and broken.

Turns out that the watch is more than 100 years old and is a ‘railroad watch’ or a ‘railroad standard watch’, which were built to standards developed by the railroads in the United States in the second half of the 19th century. My grandfather Elkington was a fireman on a railroad for a number of years and carried this watch as a condition of employment. The standards were developed to reduce the probability of train crashes caused by differences in the time-keeping of railroad employees’ timepieces. In addition, they were designed to ensure that the trains ran on time, efficiently and effectively transporting people and goods to their destinations.

The whole concept of time-keeping standards and standard time itself was an outgrowth of a concern for safety and efficiency. In the early 19th century and before, every little Podunk town in the United States set its own time. It was the coming of the railroads that drove all these towns and their states, and finally the federal government, to adopt uniform time standards.

Standards today

Today, we swim in an ocean of standards. My wife is a nurse and began her career as a medical-surgical nurse. So I looked up the Academy of Medical-Surgical Nurses and learned that over the years it has published several editions of a document called Scope and Standards of Medical-Surgical Nursing Practice.

And let us not forget the stock market crash of 1929 and the Great Depression which followed. One might think of these events as the Big Bang of financial and accounting standards. The US Generally Accepted Accounting Principles are the basis for how all publicly traded companies in the United States collect and structure their accounting information and meet their requirements for financial reporting. These standards were developed after 1929 by private-sector professional associations (predecessors of the American Institute of Certified Public Accountants and the Financial Accounting Standards Board).

Financial and accounting standards, as well as standards associated with trading and brokerage of financial products, were developed by private sector professional organisations rather than US Congress or the Securities and Exchange Commission because key government and private sector decision makers believed that the private sector would do a better job of it. Standards in these areas have remained in the hands of private sector organisations to this day and for this reason.

Self-regulation or rules from above?

Companies have been lobbying Congress intensively for years to change the behaviour of patent licensing entities through legislation, particularly enterprises that do not build products based on the patents they are licensing. Competing draft bills are being evaluated by the Senate and House Judiciary Committees. A few of us from LES have briefed congressional staffers on LES Standards and its objectives, as an input to their decision making.

We have done this to make sure that Congress is aware that there are self-regulatory approaches available to address some of the more egregious behaviours and deleterious effects of companies’ misuse of their IP rights. Just as we restored investor confidence after the 1929 crash through self-regulatory standards, so we should also be able to address misbehaviour, Podunk behaviour and the risks of opacity and misinformation in the field of intellectual property.

If we do not take the path of self-regulation through standards, I am afraid – and many of my colleagues are afraid – that the US Congress will define our IP management practice for us in detail. Various powerful companies and powerful industry lobbyists are queueing up a legislative agenda in the field of intellectual property that will likely occupy Congress for decades, with uncertain outcomes for the health of innovation in the United States.

Self-regulation through standards gives us the ability to operate on the problems in IP management with the appropriate surgical instruments, in a sterile and orderly environment, with well-schooled specialists in charge. Relying on Congress to tell IP management people how to manage intellectual property is like inviting senators and representatives into the operating theatre to direct surgeons, nurses and technicians as they perform brain surgery. Congress certainly means well and is rightly outraged by some of the behaviour reported, but good intentions and a desire to right wrongs may not necessarily yield favourable outcomes.

My objective in this roundtable article is to speak to several of the key people involved in LES Standards and, by doing so, to provide some insight into what is happening in this important area of LES’s work. The purposes of LES Standards are to:

  • raise the standards of business conduct in IP-oriented transactions;
  • improve the practice of IP management and by so doing mitigate its risks;
  • reduce the cost and time required to carry out IP-oriented transactions and IP management; and
  • protect and preserve the value of intellectual property for innovative individuals and enterprises, thereby encouraging investment in innovation and enhancing the economic wellbeing of society.

Three standards committees have been formed: the Patent Licensing Entity Standards, the IP Brokerage Standards and IP Protection in the Supply Chain Standards.

The people interviewed in the following pages are involved in one or more of these committees. They come from diverse backgrounds, but are bound together by a conviction that self-regulation through standards is an important new direction for IP management – one that they expect to result in real value for everyone.

Joining me for this roundtable discussion are Michele Riley, managing director at Stout Risius Ross; Mike Gross, senior licensing manager at Kimberly-Clark; Craig Moss, chief operating officer at the Centre for Responsible Enterprise And Trade (; Natasha Radovsky, director, IP management at Boeing; and Brian O’Shaughnessy, a shareholder at RatnerPrestia.

Introducing the participants

The following panellists join Bill Elkington for this issue’s roundtable discussion:

Mike Gross is a senior licensing manager at Kimberly-Clark. The company’s well-known global brands include Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend. In his position in global licensing in the corporate research and engineering organisation, Gross is responsible for monetising Kimberly-Clark’s patents and know-how.

Craig Moss is chief operating officer of the Centre for Responsible Enterprise and Trade ( He is responsible for developing and delivering CREATe Leading Practices, a programme designed to help companies and their supply-chain partners to reduce the risks associated with trade secret theft, counterfeiting, piracy and corruption.

Brian P O’Shaughnessy is an attorney at law and a shareholder in the Washington DC office of RatnerPrestia. He is a registered patent attorney with both private practice and in-house experience. His practice focuses on global IP protection and strategic use of intellectual property to maximise return on innovation.

Natasha Radovsky is director, IP management at Boeing. She has negotiated and closed significant patent, software, and technology licensing and acquisition agreements with leading companies throughout the world. She also handles matters relating to IP enforcement and IP-related collaboration, joint development and M&A agreements.

Michele M Riley is a managing director with Stout Risius Ross in the firm’s Washington DC office. She leads the firm’s IP practice, which provides a full suite of services at the intersection of finance and intellectual property, including valuation, monetisation, compliance and litigation support services.

Michele M Riley, managing director, Stout Risius Ross

“Standards carry more weight than best practices because they require buy-in and agreement from LES members”

First of all, what are you thinking about when you use the term ‘LES Standards’? For example, will LES be developing product standards, testing standards or interface standards? Does what you have in mind have anything to do with reasonable and non-discriminatory (RAND) or fair, reasonable and non-discriminatory (FRAND) licensing?

Michele Riley (MR): When I think about LES Standards, I think about best practices and guidelines for licensing industry professionals to refer to and rely on in their day-to-day work. These standards will set expectations within the community and define behaviours, practices and forms of communication that we can all aspire to. I do not think that the LES Standards will have anything to do with RAND or FRAND licensing. Rather, they will capture and reflect the substance of the productive and informative discussions that LES members have with their counterparts in licensing entities all over the world, every day of the week.

Mike Gross, senior licensing manager, Kimberly-Clark

“The LES Standards are focused more on business processes than legal processes”

Mike Gross (MG): When I think about LES Standards, I think about standard ways of dealing with other parties when negotiating licensing agreements. These can mean following certain guidelines for conduct and/or using standard documentation to execute transactions. Regarding RAND or FRAND licensing, since my work is outside these areas, I do not have anything in mind for LES Standards that might apply.

Craig Moss, chief operating officer,

“We want to encourage companies to be able to measure where they are now and then take practical steps to improve”

Craig Moss (CM): LES has a broad reach with a diverse membership that spans many industries and countries. It makes sense for it to try to drive the standardisation of certain aspects of how companies interact in relation to intellectual property. Standards can help to make interactions and transactions more efficient. We are developing standards for how companies act and expect others to act in developing, using and protecting their own and others’ intellectual property.

Natasha Radovsky, director, IP management, Boeing

“The fact that industry standards exist will shorten the deal cycle and provide for improved workflow”

Natasha Radovsky (NR): When I use the term ‘LES Standards’, I am thinking especially about some interface/agreement type of standards that relate to general terms and conditions for IP-related transactions.

Brian P O’Shaughnessy, shareholder, RatnerPrestia

“It cannot be done overnight and it cannot be done without a lot of hard work by a great many people”

Brian O’Shaughnessy (BOS): I think of LES doing what it has done best throughout its 50-year history. Since its inception, LES has been the principal forum for global leaders in licensing to build a network of peers and colleagues, and to share strategies and tactics for efficiently bringing the fruits of innovation to market. Licensing leverages the efficiencies of specialisation by the orderly conveyance of IP rights. As in any enterprise, there are best practices and a community striving for continual improvement. LES, and its standards initiative, is at the vanguard of identifying such practices and supporting such improvements.

LES Standards is principally focused on creating consensus in the licensing community as to the best practices in licensing, irrespective of industry sector, and creating an inventory of them. The initiative will identify how the licensing community as a whole can integrate those practices to make the exchange of IP rights more efficient, ethical and profitable.

However, unlike the ISO standards, LES Standards will be less prescriptive as to products, focusing more on systems, processes and practices for licensing. The standards will be devoted to developing systems that are transparent (insofar as the realities of the business world permit), ethical, efficient and reliable. By ‘reliable’, I am referring to processes and practices that have been tested over time and have found acceptance within the community as a whole. Thus, standards will be established as to certain terms and conditions, and financial and accounting practices as applied to the conveyance of intellectual property, as well as to how IP rights are created, identified and tracked throughout the value chain and, of course, accepted and ethical practices in negotiating and consummating transfers of such rights.

Could you give me some examples of standards that you are working on?

MR: In patent brokering, we are working on guidelines for fee structures and performance of due diligence when reviewing a portfolio, as well as a standard non-disclosure agreement and brokering agreement.

MG: I am working on the LES Patent Licensing Standards Committee, which will work to develop standard practices and behaviours for any entity that licenses its intellectual property – ‘any entity’ includes operating companies and non-practising entities. We will also develop standard documents to help streamline the transaction process. The highest-priority documents include non-disclosure agreements, patent licensing agreements, patent assignments and patent sale/acquisition agreements.

CM: Currently, LES is developing three different standards. I am on the working committee for one of these: “Intellectual Property in the Supply Chain.”

We are seeking to create a way for third parties to show that they have the business processes in place to better protect their own intellectual property and the intellectual property of other parties (eg, customers, suppliers, distributors and joint venture partners). We are addressing all types of intellectual property – patents, trademarks, registered designs, copyright and trade secrets.

The primary focus of the standard is on the business processes that companies can use to implement IP protection systems in the end-to-end supply chain. Today, most companies primarily rely on legal means to protect intellectual property. They file patents and trademarks; they include IP protection provisions in their contracts; and then they seek legal recourse if they discover a problem. Our goal is to enhance this legal protection by embedding IP protection in how a company operates and interacts with other companies. We are trying to create a common set of expectations for what a company should do to protect its own intellectual property and that of customers, suppliers and partners.

For many, it helps to think of quality management standards such as ISO 9001 as a reference. This uses a business process approach for attaining high levels of product and service quality. In today’s global economy, being certified to ISO 9001 or another recognised quality standard is virtually a requirement to be able to compete.

The LES supply chain standard would set the bar for what management systems companies should have in place to enhance the legal and contractual methods that they use to protect intellectual property. Of course, every company is in someone’s end-to-end supply chain, so ultimately the standard will have to affect what a company does internally and what it does to manage its relationship with other companies. The standard would address the following elements:

  • Policies and procedures – are there policies on using and protecting intellectual property? Are they communicated to third parties? Are there procedures to ensure that the policies are being followed?
  • Record keeping – are there adequate and accurate records about how intellectual property is handled?
  • Senior management commitment – is IP protection promoted from the top and throughout the organisation? Is this commitment communicated to other companies?
  • Management of third parties – is IP protection part of contract provisions, due diligence and the oversight of suppliers, customers and partners?
  • Information technology and physical security – are security systems and practices, such as access control, in place?
  • Monitoring – is someone checking to ensure that policies and procedures are being followed?
  • Corrective actions – if a problem is discovered, what actions are being taken to fix the problem and its root cause?
  • Training and awareness building – do employees know what intellectual property is and how to protect it? Is effective training in place?
  • Continual improvement – what is the company’s commitment to and level of implementation around improvements?

The hope is that the standard can help companies to gain a competitive advantage by demonstrating that they have a commitment to protecting intellectual property – and that they are doing something about it.

NR: My interest in LES Standards is an outgrowth of my work on some internal best practices relating to Boeing’s accepted terms and conditions for IP licensing and sales transactions. At Boeing, I am also working on some standards relating to the types of entity with which we should engage – or not – for patent sale transactions. This background will be the focus of my work in LES Standards, at least initially.

BOS: My personal interest in the LES standards-setting process is to create industry-accepted practices for negotiating and conveying IP rights that will enhance efficiency, transparency and ethics. My focus is on the mechanics of how those rights are actually conveyed. Regrettably, a great deal of media attention has lately focused on unethical practices that tarnish the practice of licensing. As a result, the commercial exploitation of IP rights – once a laudatory endeavour – has now become suspect. Recent legislation has weakened IP rights and unless we take our time and get it right, pending legislation will do still more damage.

This country was founded on principles that recognise the rights and value of the individual, and that government is established of, by and for the people – not the other way around. The United States was the first country to grant patent rights to individual inventors. In so doing, the founders recognised and supported a culture in which inventors and entrepreneurs are rightly rewarded for their industry, for creating new and better products, and for bringing those products to market for the benefit of all.

We cannot deny that abuse of the system exists. However, the LES Standards initiative shows that the licensing community can police itself to discourage unethical behaviour and suspect business practices. It will do so by creating commonly accepted guideposts for good, efficient and ethical behaviour, and reliable means for identifying those who have committed to abide by such behaviour and are actually doing so.

Why are you developing ‘standards’ rather than ‘best practices’? Best practices are what we in the IP management community are focused on today – why is that not good enough?

MR: By definition, standards should generally incorporate best practices, so the good work of today’s IP management community will be subsumed into LES Standards. Standards carry more weight than best practices because they require buy-in and agreement from LES members. This standards initiative is exactly the kind of initiative that LES must undertake in order to increase its relevance as a professional organisation in the licensing community among current and target members. By setting the standards, LES becomes the standard bearer, so to speak.

MG: We are developing standards that are American National Standards Institute (ANSI) approved – this will allow licensing entities to be accredited by an independent agency as meeting the standards. In turn, through this accreditation, patent licensors can demonstrate that they follow accepted norms in the industry and do not practise bad behaviour.

CM: What we envision is a standard that integrates best practices. A standard offers companies of all types the opportunity to demonstrate a level of commitment and competence in a given area. It also creates common expectations that are clearly communicated.

For IP protection, we think that the most effective approach is to create a standard with maturity levels. A progressive standard (eg, based on a scale of one to five) provides multinational companies and their supply-chain partners with an understanding of the true strengths and weaknesses of a company’s IP protection programme. This approach also increases engagement in the process, rather than a periodic attempt to meet pass/fail requirements.

We want to encourage companies to be able to measure where they are now and then take practical steps to improve. It also formalises best practices and provides for independent verification rather than each company having a subjective interpretation of best practices.

A standard has several pillars that need to be developed:

  • the standard document detailing the specific requirements that a company will need to meet in order to be certified to a certain maturity level;
  • the certification programme detailing who will conduct the certification assessments and the criteria to be used; and
  • guidance targeted at two audiences:
    • companies seeking certification to the standard – practical information on developing the systems needed to meet the standard; and
    • auditors – guidance on how to verify the maturity level of the IP protection system against the standard.

 The IP management community has been focused on best practices rather than standards primarily because a best practices approach provides for more flexibility 

NR: The IP management community has been focused on best practices rather than standards primarily because a best practices approach provides for more flexibility. Since many companies have different policies and procedures as well as risk tolerance, most people believed that a best practices approach was the best we could do.

BOS: This gets to my last point. The purpose of standards is to create a systematic and commonly accepted catalogue of tools, tactics and practices that are identifiable and verifiable. Generally speaking, standards relate to minimally acceptable criteria or conduct, as opposed to aspirational best practices. Further, the protocol for setting standards is rigorous, yet open and transparent. It is essential that the process be inclusive and transparent. If there is not buy-in throughout the licensing community, the standards will be meaningless. Similarly, the various standards must be carefully articulated in a way such that they will be readily identified and understood by the user community, and such that they can be verified. As such, one’s commitment to abide by the standards can be tested and confirmed. Without that kind of rigour, the standards would have little value and an effective regime of enforcement would be impossible.

If LES develops standards of various kinds, will that not constrain enterprises to some extent? Most enterprises today have their preferred ways of doing IP management. Might LES Standards disrupt that? If so, why are companies signing on to moving LES Standards forward?

MR: All enterprises, although they may have preferred ways of carrying out IP management, benefit from their employees learning and becoming informed about other ways of doing business through their contacts in the licensing community. These standards formalise that process so that this learning can be memorialised through the development of the standard.

MG: I do not think that there will be anything constraining about LES Standards – they are not laws. If an enterprise wants to continue working as it is, it will be free to do so. Hopefully, the standards will help enterprises to conduct business more efficiently by increasing transparency and decreasing the time and cost of complete deals. If this happens, companies will be happy to follow standards.

CM: We have found in our work at – having worked with companies around the world on IP protection – that most companies focus IP protection on legal and contractual mechanisms. If you look at other improvements that have taken place in companies and supply chains, most have used business processes as a way of driving improvement. Two of the most well-known standards – ISO 9001 for quality management and ISO 14001 for environmental management – are based on a management system model and are implemented by more than 1 million organisations across 175 countries. Companies around the world understand the ‘measure and improve’ approach and can apply the same principles to IP protection.

Rather than being disruptive, we believe the opposite: implementing a standard to manage intellectual property in the supply chain has the potential to create greater efficiencies in the buyer-seller relationship. For the buyer, this approach helps to streamline third-party due diligence by enabling it to evaluate the comparative level of all the companies it deals with more efficiently, rather than taking an ad hoc approach. From the supplier or distributor standpoint, if they have verification of meeting the standard, they become more attractive because it shows that they have put the effort into building an IP protection management system. Additionally, LES Standards could potentially consolidate the various protocols required by a range of customers and enable a supplier to meet just one standard.

Standards have had a strong track record for driving lasting change in some areas. Initially companies baulked at ISO 9001. However, now it is a bare minimum to be in the game, as it shows that a company is committed to global leading practices. A standard can create efficiency and enable companies to shift resources from reacting to problems to implementing systems to prevent problems from occurring.

NR: LES Standards will not be disruptive, in my opinion. It may be that some companies will choose not to follow the standards, which is fine. The fact that industry standards exist will shorten the deal cycle and provide for improved workflow for those that do adopt them.

BOS: The objective in creating standards is to identify foundational principles of licensing that can be agreed upon by all involved – something more than motherhood and apple pie, but less than a formulaic prescription of tactics.

LES Standards will focus on higher-level principles and practices, and little – if at all – on tactical elements. LES has no intention of telling individuals or organisations how to conduct their day-to-day licensing operations. Instead, the initiative will focus on core principles that affirm commonly accepted behaviours and rudimentary practices that are routinely employed.

Licensing is more art than science. However, if we can firm up the science by identifying and adopting commonly accepted principles and practices, then the art will flourish. We hope to bring more certainty, transparency and continuity to those things that we can all agree on. Ultimately, this will permit us all to do greater, more creative and more rewarding things with what remains. Far from constraining the industry, we will be liberating it.

What are your thoughts about LES Standards membership? Are the rates published on the LES website reasonable? Why is membership of LES Standards not free?

MR: I am not sure.

MG: My initial thoughts about LES Standards membership were: why do we have to pay to volunteer? And why can LES not cover the cost, since the work will benefit everyone and not just those who work on it? While I think these questions can continue to be fairly asked, I understand that there are costs to developing standards that are not in the LES budget. These include ANSI fees and costs, web-based ANSI-compliant software, extra staff, supplies and staff travel. I understand that the LES Standards membership rates were set to meet anticipated costs by a number of participating entities, based on their size. Directionally, I would like to see rates halved and participation doubled to cover the costs, but the organising group had to start somewhere.

CM: We believe that getting more companies involved in the standards working committee is positive and important. It is also important to have companies from all levels of the supply chain – from multinationals to manufacturers and distributors, particularly with representation from emerging markets. Having a broader working group at an early stage provides a wide range of perspectives that will help LES to develop a standard that is practical, applicable and effective for all parties.

NR: That question will be asked by many members, since companies would want to see free membership, at least initially. It may be a good idea to have an introductory membership fee, so that executives can understand the benefits of having an LES Standards membership.

BOS: The LES Standards initiative is a bold and worthy effort. It will improve the practice of licensing for all concerned, in all industry sectors and in all regions of the world. It cannot be done overnight and it cannot be done without a lot of hard work by a great many people with diverse skills and experience. An effort such as this requires support, infrastructure and materials. LES is a volunteer organisation. While many of our members are willing to devote their time and talent to this initiative, it is incumbent on LES to assemble a support structure that minimises the burden that we put upon our volunteers – and that kind of support requires resources.

Members of the LES Standards initiative will benefit from their participation. They will leave their mark on practices that will become the foundation of licensing for many years to come and they will participate in a new and improved market for IP licensing. LES is convinced that the benefits are worth the price of admission.

Help me to understand how to think about LES Standards. Is the focus mainly on legal process standards or is it on business process standards? Whichever way you think it will go, what are the implications of that?

MR: Our focus is on business process standards, which in my view are broader and encompass more elements than legal process standards (ie, the law is the law is the law). Because the focus is on business process standards, this will likely make the standards more difficult to develop, because there are more elements that need to be considered – as well as more points of view from different entities that have different ways of doing business. However, I do think that this focus will result in a better product at the end of the day.

MG: The LES Standards are focused more on business processes than legal processes. The outcome should make it easier to do business (which should mean fewer legal processes). The implication is that an enterprise that is accredited with the LES Patent Licensing Standard will be viewed as an ethical and efficient patent licensor.

CM: The LES IP in the Supply Chain Standard is based on a business process approach that enhances legal activities and helps to ensure that systems are in place for companies to meet legal obligations and the expectations of their business partners. For example, a contract may state that a company needs to keep trade secrets confidential. The business processes to support that obligation could include controlled access to the trade secrets on a need-to-know basis, employee training on trade secret protection, monitoring physical and IT security to verify access, and communications about the importance of protecting confidential information.

The business process or management systems approach is based on measuring and improving the maturity of how well IP protection is implemented across an enterprise. By first understanding the strongest and the most vulnerable elements of a company’s IP protection programme, a company can set priorities to make improvements. Overall, companies are familiar with the idea that they cannot improve what they do not measure.

In addition to looking internally, it is important for a company to measure and improve the ability of all companies they work with – suppliers, joint venture partners and distributors – to protect intellectual property. Ultimately, it is best for everybody if there is a consensus on how and what to measure, so that more energy and resources can be focused on improvement.

NR: Initially, I think that the focus will be primarily on legal process and some terms and conditions rather than on business process standards. A wide variety of businesses may want to belong to LES Standards and because of this variation, it may be challenging to come up with a standard set of business processes.

BOS: I think it is both, and more. There is certainly a focus on the legal process – the conveyance of IP rights is, after all, an inherently legal undertaking, with its roots in contract law. Thus, we cannot hope to accomplish our goals without ensuring that the underlying legalities and corresponding ethical obligations are addressed.

Similarly, the commercial exploitation of IP rights is an inherently commercial enterprise. Licensing is just one way of working towards commercial objectives through the strategic use of intellectual property. However, it is also where the business of intellectual property most intimately intertwines with the legalities.

By establishing standards for how the industry exploits intellectual property for commercial advantage, it is expected that the fruits of the legal process for procuring intellectual property will best be employed through business processes to efficiently achieve commercial objectives. The public benefits from more and better products, and the commercial enterprise benefits from greater efficiencies.

Today, there are three LES standards committees, each with a draft charter and scope of work. What are other areas for standards development that you think would be good to take on in the future? For example, ISO 10668 – “Monetary Brand Valuation” – was released by the International Organisation for Standardisation (ISO) in 2010, after three years of work by the ISO committee or taskforce. Should LES be taking up other areas of intangible valuation standards?

MR: I have no opinion on this at this time.

MG: I think LES should focus on making the three standards committees successful and not worry about what else to work on yet. There is a lot of work to do and spreading resources beyond what is already a big undertaking could be detrimental to the first three standards.

CM: LES has identified three very important standards to start. I believe that working through the process of drafting the standards, developing the certification programme, gaining broad acceptance and providing companies with the resources to implement the standard is enough of a focus for right now.

Successfully launching these standards will be incredibly valuable should LES seek to develop additional standards in the future. The lessons learned with the initial three standards will certainly enable LES to take up additional standards more efficiently.

NR: I have no opinion on this at this time.

BOS: IP valuation is perhaps the richest and most challenging, while also the most in-demand aspect of commercialising intellectual property. Intellectual property resists ready and reliable valuation, since each IP right is, by definition, unique. Nonetheless, as in any complicated discipline, the more that we investigate, analyse and debate the principles of valuation, and the nature of IP rights, the more likely we are to arrive at a better place.

We frequently hear from judges, technology transfer offices and business leaders that the uncertainties of valuation frequently frustrate the prompt resolution of disputes or the consummation of deals. Fear of leaving too much on the table often leaves the would-be licensing professional in paralysing uncertainty and the deal either does not happen or is unduly delayed. One of the principal motivators for licensing is to get promising products and processes to market sooner rather than later, which works to both societal and commercial advantage. If valuation is our stumbling block, then we owe it to ourselves to chip away at it. The LES Standards initiative is the ideal means we have for doing so.

At the end of the day, what are you in LES trying to do with LES Standards? What is your vision for its contribution to the IP management community?

MR: I would like to see LES Standards become as commonly referred to and relied upon as the Institute of Electrical and Electronics Engineers standards (in the relevant field, of course). I think that by virtue of establishing and promulgating these standards, the profile of LES will be raised, which will improve our success in recruiting new members, thus ensuring LES’s relevance and importance for future generations of licensing professionals.

MG: My vision for the Patent Licensing Standard is to increase the value of intellectual property – particularly patents and know-how – by making transactions involving intellectual property easier, faster and more cost effective. If people understand the value of intellectual property to their business and how transacting it can be done ethically and efficiently, then the practice of licensing patents and know-how will be recognised as a valuable business process.

CM: The standard aims to provide guidelines and foster a stronger culture of IP protection in the supply chain. Ideally, it will help companies to recognise the value of their own and others’ intellectual property. It will help companies to understand that filing patents and trademarks and relying on contracts is not enough to protect intellectual property in today’s global economy.

The vision is to achieve standardisation around how companies protect intellectual property in the future. Intellectual property needs to be better integrated into a holistic approach of mitigating risks in the end-to-end supply chain.

NR: I believe that LES Standards may provide the IP management community with some standard and industry-accepted terms and conditions for IP transactions. In addition, I believe that the existence of LES Standards will provide more credibility to LES as an organisation and to the IP management industry as a whole.

BOS: From my perspective, the LES Standards vision is to streamline the licensing process to bring more and better products to market rapidly and efficiently. We can do this by making licensing a more reliable, predictable and ethical process. We can achieve efficiencies by establishing common values and practices that enhance trust and confidence in the market generally, and among individual participants. To do that, we must have a broad and diverse body of participants in the standards-setting process. The process will be transparent, inclusive and welcoming. We are confident that the industry will find both the process and the outcome valuable. The extent of that value will, to some extent, be driven by its participants. LES is reflective of the larger licensing industry – both are communities that prize personal networks, reputation and sound business practices. The LES Standards initiative will burnish all three for those that choose to participate and contribute.

Ticking away

Standards can create great value for everyone. They have done so and continue to do so in many fields outside of IP management. The biggest question in my mind is where they may be best developed and applied to the field of IP management to give us the most benefit.

As the British Standards Institution – one of the most prolific standards development organisations in the world – indicates on its website: “Using standards can offer a set of powerful business and marketing tools for organizations of all sizes. You can use them to fine-tune your performance and manage the risks you face while operating in more efficient and sustainable ways; they’ll allow you to demonstrate the quality of what you do to your customers; and they help you to see how to embed best practice into your organization.”

A friend of mine – a leader in the field of IP management – said to me lately: “What you are trying to do with this standards thing is really hard, Bill. And you won’t realise how hard until you get into it much deeper.”

I have high regard for all my friends, including this one. Maybe he is right; I do not know. But it is likely that I will get a lot of help figuring out ‘this standards thing’. Many in the field are joining the effort and we are only in the beginning stages of the work – the early days of understanding what we can actually do.

It could take a while. Sometimes a standard will take years to draft up, get reviewed and commented on, voted on and published. Maybe that is what we are talking about here.

My grandfather’s watch – now fixed and cleaned inside and out, with a new crystal, new face and new stem – hangs today in a little glass-and-wood, bell-shaped display device, on the credenza behind me in my office, as I work. Like the repair to my grandfather’s watch, the IP community may be presented with draft standards before we know it. Who knows? Maybe this newly refurbished old idea will be ticking away behind us, on our credenzas, driving our days sooner than we might suspect. Let us work together to find out. 

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