This, too, shall pass ...
Holed up with my family in Leamington Spa, in the middle of England, it feels like everything is changing; that nothing will ever be the same again. The terrible human toll being exacted by the Covid-19 pandemic here and in other parts of the world is matched only by the awfulness of the economic news, notwithstanding the extreme – but absolutely necessary – mitigation measures being taken by governments and banks. None of us of working age has ever been through anything like this before.
It’s apocalyptic out there and undoubtedly that is feeding through to the world of IP. Earlier this week IAM published modelling that suggests global patent applications may fall by up to 20% in 2020. Mobile device sales have collapsed, auto manufacturers and countless others are heading into furlough. As people lose their jobs or are confined to their homes, purse strings are being tightened. The result is that royalty revenues are almost certainly going to end up way down on the numbers licensors were expecting at the start of the year. And that’s before you factor in how tough it is to negotiate new deals right now. Anecdotally, we have heard of many corporate IP teams that have gone into lockdown, with nothing but the most urgent work now being authorised. For third party legal advisers and service providers, that cannot be good news.
But this will not endure. We are going to move on from here. At some point, the coronavirus will be contained and pushed back, one day – perhaps relatively soon - a vaccine may defeat it. Then a new normal will emerge. And when it does, IP will still be what it has always been: a business asset of central strategic importance that, when deployed effectively, can drive revenues, build shareholder value, create and defend market positions, enable collaborations, and enhance the ability to attract funding – among other things.
But there will be even more on top. The recession of the early 1990s, the bursting of the dotcom bubble at the start of this century, even the crash of 2008, may not have been on the scale of what we are seeing now, but they all teach a similar lesson: out of adversity comes IP opportunity. When times are tough, entities fall back on the fundamentals to see them through, while protecting that which they hold most dear. Among those things is IP. On that basis, we can probably expect to see more patent disputes in the coming years. Even now, it looks like litigation numbers in the US courts and at the PTAB are holding steady.
Beyond that, though, there will be other opportunities. One unfortunate aspect of what is happening now is that it will lead to bankruptcies – probably a lot of them. Many of those companies hitting the wall will have high-quality IP. That means the chance to acquire portfolios.
There will be plenty of restructurings where IP assets play a central role, too, not to mention M&As. And there is still more. Many companies will be looking for ways to trim costs or to make their assets work harder. Skilled IP strategists, internal and external, will be able to help them do that, while also advising on developing patenting strategies fit for a brave new world. Novel ways of using IP will emerge as well. Individuals and firms who know IP backwards and how it fits into the reconfiguring business environment will find them.
What all this means is that IP professionals of whatever kind are going to have a hugely important role to play in enabling the global recovery. But, of course, none of this is going to happen automatically. It will have to be advocated, explained and demonstrated - often to people inherently suspicious of things they do not quite understand and used to seeing IP only as a cost. Again, though, history shows us that the right arguments will overcome such scepticism.
In fact, if you want a good way to get attention when making your pitch, you could do a lot worse than point out that the mobile connectivity that kept the world going during the crisis was down, in part at least, to IP owners that had spent billions on R&D being incentivised to work together to ensure it happened. Where would we have been had that not been the case? What’s more, when Covid-19 treatments and vaccines do appear it will almost certainly be largely because of the work done by biopharma businesses, large and small, alongside research institutions, and the decisions they made about how to deploy their IP. That’s the power of the asset you are talking about, you can say.
Understandably, in this time of pain all that may seem a little abstract. However, there will be a day when it becomes reality. Keep calm and carry on is a cliché, but like all the best examples of its type it also speaks an important truth. Now is not the time for panic. Hunker down, yes; preserve energy and resources, of course; keep your loved ones safe, for sure; but be ready to go again. Ensure you know what is going on in the wider IP world, arm yourself with the arguments you will need to make your case, remember that the assets you are talking about are of fundamental importance. That is the way to get through this. There is a big, bright tomorrow. Never, ever forget that.