The IP personalities of 2017

The world of IP value creation is getting bigger every year – as are the challenges facing those who work within it. This makes it increasingly tough to decide who to include in our annual listing of the personalities that we believe in some way capture the essence of what is going on. However, it is not one we shirk; and so, after a great deal of consideration, the final 10 have been identified. Of course, we define a ‘personality’ in broad terms. You do not have to be a human being or even a single identifiable entity to qualify – it is all about who and what caught our eye over the past 12 months. With that in mind, here in alphabetical order is who and what we feel defined the year just gone in intellectual property.

Kasim Alfalahi

CEO of the Marconi Group

A top-tier global player

Kasim ALFALAHI

It was something of a surprise when Kasim Alfalahi left his post as chief IP officer of Ericsson in early 2016 to become the CEO of a new Internet of Things (IoT) licensing platform named Avanci. The relatively low profile that he kept throughout the rest of the year seemed to suggest that one of the global patent market’s primary movers and shakers might have decided to take things a little easier after a hectic period growing the Swedish company’s licensing revenues to well in excess of $1 billion per annum. In 2017, though, we discovered that Alfalahi has no intention of slowing down – far from it, in fact.

In February 2017, it was announced that he would be heading up a new entity called the Marconi Group,  a company that will perform back office tasks for, among others, both Avanci and non-practising entitity (NPE) PanOptis (which owns a number of patents formerly held by Ericsson). Then in November came the news that another Marconi Group entity, Teletry, had agreed a deal with BlackBerry which gave it “the right to sublicense a broad range of BlackBerry patents to a majority of global smartphone manufacturers”. Given how unencumbered the Canadian company’s portfolio is, that represents a fair amount of potential. This was followed by Avanci’s first agreement with a major auto company, when BMW signed up to license wireless technology being offered via the Avanci platform, with Alfalahi promising more of the same in 2018.

Finally, just before the Christmas break Avanci embraced full transparency when it published its royalty rates for all car manufacturers, with prices ranging from $3 to $15 per car. After a year like this, there can no longer be any doubt that Alfalahi continues to play the IP game in the very top tier.

Colin BIRSS

Described as the “decision of the decade” in fair, reasonable and non-discriminatory (FRAND) standard-essential patent (SEP) licensing by former chief judge of the Court of Appeals for the Federal Circuit Paul Michel, in April 2017 the Unwired Planet v Huawei judgment handed down by Justice Colin Birss in the High Court in London electrified the patent world.

That it was the first UK ruling to consider the licensing of SEPs on a FRAND basis was noteworthy enough, but Birss’s detailed explanation of what constitutes fair, reasonable and non-discriminatory as he set out a worldwide royalty rate for the NPE’s patents marked the case out as globally significant.

“I think the judgment and the close reasoning by Justice Birss is altogether brilliant,” Michel told IAM. “It is a milestone regarding FRAND licences for products that are sold globally. From the standpoint of the United States I think it is entirely enviable, it is so practical and reflects all the economic realities and not merely legal theories.” If that was not enough, the English judge – who is a long-term IP specialist – then developed what has become known as the FRAND injunction: a new kind of flexible injunction specifically designed for FRAND-related cases.

In the space of a few short weeks, Birss ensured that his name was known in licensing circles across the world, creating a reference point for both negotiating parties and courts called on to hear disputes – and, quite possibly, helping to establish the United Kingdom as a go-to venue for those seeking to enforce SEP-related rights.

Just how influential he has been was confirmed at the end of the year when Judge James Selna issued an extremely rare US SEP/FRAND decision in TCL v Ericsson, in which much of Birss’s reasoning was followed, if not referenced. It was something of an irony that the suit did not go well for the Swedish company, given that a large part of the Unwired Planet portfolio consists of patents that it previously owned.

António CAMPINOS

António Campinos

next president of the European Patent Office

The most transparent EPO appointment yet made

In July, the Administrative Council of the European Patent Organisation did something that it had never done before and invited applications to be the next president of the European Patent Office (EPO). Previously, such appointments were made behind closed doors following a secretive election process with no criteria given as to why the successful candidate got the job. However, this time we know exactly what the council was looking for and that António Campinos – who will succeed current incumbent Benoît Batistelli on July 1 2018 – has been judged to have the following attributes:

• in-depth understanding of the needs of an international organisation;
• thorough knowledge and proven practical application of modern management methods, including an outstanding ability to establish and foster social dialogue;
• a genuine aptitude for communication, negotiating skills and the ability to make their opinions count; and
• an excellent command of at least one of the official languages.

These criteria provide a benchmark against which to judge Campinos’s success. Such a level of transparency was previously unknown at the EPO and it would be nice to think that this will be the shape of things to come (but do not hold your breath).

It always looked like the job, as described in the July announcement, was a perfect fit for Campinos, who as executive director of the EU Intellectual Property Office has established a strong reputation as a political operator – keeping sometimes fractious national agencies onside while ensuring a top-class service for users and maintaining an amicable relationship with staff members. It was for all these reasons that he was inducted into the IP Hall of Fame in April 2017.

They are skills he will need in abundance in his new job, given the breakdown in the relationship between the EPO’s senior management and elements of the examiner corps that took place during the Battistelli era. However, like the new president, the office’s discontented staff may be looking for a fresh start after years of confrontation. It could be that calmer waters lie ahead for the EPO.

CAO Jun

Although a name unfamiliar to many IAM readers, Cao Jun was one of the two principal characters involved in a stand-up row at a Chinese patent conference, a report of which was by far the most read story on the IAM blog in 2017. Gratifying as the numbers were, this is not the reason he is on our list. Rather it is because of what Cao represents – a confident, assertive and growing domestic NPE sector in China that has the potential to cause serious problems for foreign companies over the coming years.

The other player in the confrontation, which took place at the China Patent Annual Conference, held in Beijing in September, was Gordon Gao of Fangda Law Firm, which has represented Apple in a number of disputes in Chinese courts. Following a presentation by Cao at the event, the pair got into a public slanging match in which Cao accused Apple of abusing his company’s intellectual property and Gao made pointed remarks about the value and utility of the patents that Iwncomm owns and has succesfully enforced, as well as the WAPI wireless local area network standard of which they form a part. It ended with Cao questioning Gao’s credentials as a Chinese citizen and him walking off the stage saying: “You’ll pay for what you’ve done, on my honour.”

This is not the kind of exchange that you expect to see at a patent event, but the fact that it took place in China and involved the head of an NPE that had successfully asserted its rights against foreign businesses and someone who has represented a big multinational that has been targeted by Iwncomm shows how high the stakes are in the world’s biggest mobile telecoms market. Put simply, local NPEs are not only winning cases against non-Chinese parties in the country’s IP-friendly courts, but they are also obtaining injunctions. That gives them immense power to negotiate deals – and they know it, as do those on the other side of the table. What remains to be seen is whether the same leverage might exist with regards to domestic companies. Perhaps that is something we will discover in 2018.

Ilkka Rahnasto

head of patent business at Nokia

Number one IAM Market Maker of 2017

Nokia

How do you make a very good patent transactions year a great one? Perhaps by announcing the signing of a royalty-bearing licensing deal with one of China’s technology titans just before Christmas. That is exactly what Nokia did on December 21, when it confirmed an agreement with Huawei. “Nokia will follow its existing practices for disclosing patent licensing revenue in its quarterly financial reports and expects that revenue for the agreement will begin to be recognized in the fourth quarter of 2017, including an element of non-recurring catch-up revenue, with additional revenues expected during the term of the agreement,” the press release about the deal stated.

IAM recognised the tremendous work of the Finnish company’s patent transactions team when we placed Ilkka Rahnasto – who heads it up – in the number one spot in the 2017 Market Makers ranking. That decision came on the back of a $2 billion portfolio-validating deal with Apple, which may be the biggest licensing agreement ever publicly announced, and a major transaction carried out with Xiaomi. Nokia’s CEO Rajeev Suri described the latter as “a milestone win with a Chinese smartphone vendor, setting the stage for us to engage further with other vendors in the country”. The Huawei deal demonstrates he was not wrong about that. The good news for Nokia and its shareholders is that there are dozens more Chinese manufacturers to talk to in 2018. “The Nokia team is not soft… They are persistent and professional; they understand the key elements well and negotiate hard,” Xiaomi’s Paul Lin told IAM.

Other notable highlights from 2017 included a significant arbitration success against LG and the decision to retain Aqua Licensing to sell off a portfolio of over 4,000 telecoms-related patent families. But perhaps most eye-catching of all was the news broken by IAM in October that Nokia had transferred a portfolio of over 12,000 assets to an entity called Provenance Asset Group, set up and run by the principals of strategic IP advisory Quatela Lynch McCurdy. In a subsequent interview, Provenance’s Dan McCurdy and Rahnasto explained the motivations behind the deal and the innovative way in which the patents will be offered to prospective licensees. It is a new kind of proposition for an evolving marketplace and it is no surprise that Nokia is at the heart of it.

Arvin Patel

chief IP officer of TiVo

Big vote of confidence from company where patent monetisation is central to success

Arvin PATEL

The December announcement that Technicolor is in the process of negotiating the potential sale of its patent licensing business throws into sharp relief Arvin Patel’s decision to resign his post as the company’s chief IP officer and to take the same position at his old TiVo/ROVI stomping ground.

Whether Patel caught wind of a possible divestment or whether his departure prompted the Technicolor board to reconsider a path it had previously fought hard against is probably something we will never know. But what we can be sure of is that while at the Paris-based business Patel had a major impact.

Under his leadership in 2016, Technicolor achieved licensing revenues of €285 million, up by over 25% on the previous year’s figures, while earnings before interest, taxes, depreciation and amortisation (EBITDA) were 33% of total company EBITDA, even though licensing revenue represented just 6% of overall revenues. This led the company’s CEO Frederic Rose to hail a “fantastic performance by the licensing team in 2016 in terms of signing new deals and new contracts” in a call with analysts in February 2017 – a performance which, he stated, gave him “a lot of confidence for the robustness of our portfolio and the strength and quality of our teams in order to be able to negotiate new deals”.

Four months later came the news that Patel was on his way back to Silicon Valley to join up with a TiVo operation that already generates more than Technicolor’s in terms of licensing income and where the IP business is absolutely central to ongoing success. At a time when the global licensing environment is uncertain and the one in the United States is actively hostile, a company such as TiVo that commits to strategic IP value creation has a large pool of talent from which to recruit. That shows the confidence the company’s board has in Patel’s talents – something it demonstrated in practical terms in October by green-lighting Patel’s decision to recruit former IBM deal maker Marc Ehrlich as senior vice president of patent strategy.

A significant victory over Comcast at the International Trade Commission (ITC) in November will also have provided Patel with a boost, though the groundwork for that was laid long before his arrival. Speaking in October, before the Comcast decision was handed down, TiVo CEO Thomas Carson stated: “We believe there are multiple significant opportunities for our IP licensing business, where we can grow recurring revenue. This includes making further progress with international Pay TV operators, especially in Canada, signing additional deals in the mobile and OTT spaces, and opening some new adjacent verticals.” In 2018, Patel will begin to deliver on this.

Qualcomm

As one of the world’s most significant patent licensors – perhaps its biggest – Qualcomm is a perennial major player; but in 2017 the company excelled itself.

The year began with a double whammy that saw it sued by both Apple and the Federal Trade Commission (FTC) over allegations of unfair licensing practices. While there was no real response possible against the government agency except to present a case and hope for the best, Qualcomm came back at Apple with all guns blazing – launching suits against the company in multiple courts in the United States and at the ITC, as well as in other jurisdictions, including China. It also targeted companies that manufacture devices for Apple. All of which shows just how big a deal the original Apple complaint is.

But it was not just the Cupertino company and the FTC with which Qualcomm clashed in 2017. As has also become customary, there were foreign competition authorities to deal with as regulators in Taiwan imposed a hefty $773 million fine on the company and a Seoul court confirmed a $912 million charge levied by the Korean Fair Trade Commission in 2016.

On the deals front, Qualcomm sought approval for its acquisition of NXP, with some suggestions emerging that in order to secure a greenlight from the European Commission it would not buy NXP’s SEPs or assert the Dutch company’s intellectual property relating to near field communication (NFC) technology, except for defensive purposes.

However, the NXP story was overshadowed by Broadcom’s $130 billion bid for Qualcomm in early November. Although this was swiftly rebuffed, Broadcom may well try again. Certainly, the patents that Qualcomm would bring to the party – should Broadcom eventually emerge triumphant – would be worth their weight in gold. Not only does the company possess a huge portfolio overall, but it is also top tier in terms of quality in multiple sectors. In May, for example, Relecura identified Qualcomm’s IoT-related patents as chart toppers.

Michael SHORE

It would be fair to say that the Saint Regis Mohawks were not widely known in US patent circles at the start of 2017. However, by the end of the year the Native American Indians’ name was on everybody’s lips.

This was largely down to lawyer Michael Shore and the deal he struck with Allergan on behalf of the tribe. This saw the pharma giant transfer six patents underpinning its dry-eye treatment Restasis to the Saint Regis Mohawks in a transaction that netted the tribe a one-off payment of $13.75 million, to be followed by annual royalties of up to $15 million a year.

What Allergan was after, of course, was the protection that it believed the Mohawks’ sovereign immunity would offer the Restasis patents from review at the Patent Trial and Appeal Board (PTAB) – a prospect that Shore held out having previously worked on other sovereign immunity cases involving the University of Florida.

With the PTAB such an unhappy venue for so many patent owners, anything that has the potential to reduce exposure to its jurisdiction will inevitably attract huge interest – and there is no doubt that the Allergan deal did just that. It has been hailed as a huge leap forward by some, while others have lambasted it. There has been a congressional hearing on the subject, while one US Senator – Clare McCaskill of Missouri – has proposed legislation that would prevent Indian tribes from asserting sovereign immunity at the PTAB.

If Shore’s aim was to set the cat among the pigeons and to get people in high places to look closely at the current way the PTAB operates, he has certainly achieved his goal. However, in a decision just before Christmas, an expanded board panel ruled in Ericsson v Regents of the University of Minnesota that an entity waives its rights to sovereign immunity if it has previously filed a lawsuit in which it claims the relevant patents have been infringed. If that judgment stands, Shore’s gambit may end up a footnote in patent history rather than a game changer.

Ingve Björn STJERNA

As soon as voters in the United Kingdom narrowly decided that the country should leave the European Union in June 2016, the future of the Unified Patent Court (UPC) system was thrown into doubt. The United Kingdom’s ratification of the agreement creating the new regime is a prerequisite of its existence, and – it was thought – having decided to quit the European Union, the United Kingdom might not be interested in being part of something in which the European Court of Justice plays an important role. However, such concerns have proved wide of the mark.

Late in 2016, the United Kingdom made clear it does wish to be a participant and has continued to take the legislative steps necessary to enable this to happen. Despite this, though, the future of the UPC remains up in the air because of a complaint currently before the German Constitutional Court asking it to rule that the country’s ratification of the UPC agreement would be illegal. The case was brought by IP lawyer Ingve Björn Stjerna, a long-time critic of the UPC, who has written prolifically on what he sees as its manifold faults for many years.

In light of the case, which has a number of strands – including alleged flaws in the vote to ratify taken in the German Parliament and concerns over the independence of the UPC and its judges – the Constitutional Court asked Germany’s president to suspend implementation of ratification. Then, later in the year, it requested interested parties to submit comments – so delaying its consideration of the arguments.

Should the court now decide that the case should proceed, it is likely that it will not be heard until Summer 2018, at the earliest, with a decision not expected until months later. That would effectively torpedo the UPC in its current form, as even a judgment that membership of the system is compatible with the German Constitution would not leave time for the country to ratify the agreement before the United Kingdom leaves the European Union in March 2019 (currently, UPC member states also have to be EU member states).

It seems that the UPC’s only hope now is for the court to decline to hear the case in time for German ratification to conclude and for the United Kingdom also to ratify before Brexit officially occurs. One man can move a mountain, so the saying goes: in 2018, Stjerna could well prove this to be true.

XI Jinping

Xi Jinpeng

president of the People’s Republic of China

Gets intellectual property like no other major world leader

While it is unlikely that the Chinese president spends his waking hours worrying about intellectual property, it is also the case that in stark contrast to almost all other world leaders, Xi Jinping gives every impression of having a thorough understanding of just how important it is to his country’s future.

Since Xi became general secretary of the Communist Party in 2012 and president of the People’s Republic a few months later, China has seen a rapid acceleration in the development of its IP system – including the creation of specialist IP courts in 2014 – and become remarkably pro-patent, especially when compared to other jurisdictions such as the United States.

That may be dismissed as coincidence by some, but a speech given by Xi in July suggests otherwise. Addressing the National Financial Work Conference, Xi called for strengthened IP rights protection and more stringent punishment for infringement. IP protection contributes greatly to improving China’s investment and business environment, he told his audience, as well as the overall economy. Xi called on authorities to advance IP laws and regulations, improve the quality and efficiency of IP examinations, and accelerate institution building for intellectual property in “emerging sectors, new industries and business types”. Xi also signalled his determination to toughen IP enforcement in China, saying: “Wrongdoing should be punished more severely so that IP infringers will pay a heavy price.”

If that was not enough, in November a Communist Party policy committee chaired by Xi identified judicial IP reform as a national priority – with a call for the judiciary to “play a greater role in protecting intellectual property and innovation” – and demanded better training of professionals serving in China’s specialised IP courts in Beijing, Shanghai, Guangzhou and beyond.

Like many of his colleagues in the Politburo, Xi is an engineer by training. That may give him insights into intellectual property that leaders in the West, who tend to lack such backgrounds, simply do not possess. That is likely to work to China’s advantage over the coming years.