29 Nov
2019

Star turns – counting down the best of the best

In six years of compiling our top 40 Market Makers, we have observed the ups and downs of the patent market. Several giants of the NPE space have vanished; financiers who in 2014 were still eyeing the sector after the Rockstar auction have bowed out; and there has been an influx of senior figures from Asia as the IP world’s centre of gravity shifts east.

When IAM set about putting together the first 40, our intention was to rank the people who we thought were the most influential in IP value creation. This remains our aim and with daily reporting on the biggest stories across the United States, Europe and Asia, no other team of journalists is as well placed to assess who is setting the pace. As the names and faces in the top 40 have changed, we have continued to chart the ebbs and flows of a sector that has transformed significantly in the past five years.

This year’s final 40 reflects a broad definition of ‘IP value creation’. It includes executives from operating companies that make hundreds of millions from licensing, businesses that view their portfolios primarily for defensive purposes, the small group of NPEs that continue to thrive and even a select few from the advisory side.

We have included short write-ups for everyone who has made the list – with more detailed profiles for those in the top 10 – and more in-depth analysis on some of the themes that have shaped this year’s 40. As ever, we expect and hope that our ranking will prompt plenty of discussion, debate and disagreement; we welcome your feedback on this year’s membership of one of the IP world’s most exclusive clubs.

40

Minoru Fujiki

IP Bridge

Minoru Fujiki took the reins at IP Bridge earlier this year. The former NEC licensing head oversees a monetisation business that has significant momentum after a syndicated deal with 10 semiconductor companies that it negotiated with RPX. More recent transactions and court filings suggest that the fund will remain assertive under its new CEO.


39

SG Jeon

LG Electronics

LG Electronics is a major player across both sides of the licensing game, meaning that the IP department – helmed by SG Jeon – has a fine balance to strike. One notable development of the past 12 months has been the company’s activity on the sell side of the transactions market, including the assignment of a wireless portfolio to Microsoft.


38

Randall Cook

Blackberry

Randall Cook’s role as Blackberry’s chief legal officer gives him a broad range of responsibilities, including licensing and what the company refers to as “IP guardianship”. While the licensing of a large portion of the portfolio has been outsourced to Marconi-affiliated licensing platform Teletry, Blackberry maintains control over a significant amount of its assets and remains embroiled in litigation as it looks to assert its rights against Facebook, Snap and Twitter.


37

Elvir Causevic

Houlihan Lokey

Houlihan Lokey is an essential conduit between the world of private equity and the world of intellectual property. Elvir Causevic’s IP+tech advisory team merges the best practices of investment banking and IP deal making, advising on patent transactions as well as major M&A deals involving IP-focused companies. Recent instructions include the sale of Intellectual Ventures’ (IV) third fund.


36

Clifford Press

Acacia Research

After a tumultuous period in which it effectively exited the IP arena, Acacia Research is back licensing assets and looking for acquisitions to bolster its relatively mature patent portfolio. New CEO Clifford Press, who was appointed in September, has played a pivotal role in returning the company to the NPE market, which Acacia helped to define through the 2000s.

More than your typical “G”

Over the years, each of our market-maker rankings has featured a sizeable group of executives from the major wireless licensors. Huawei’s Jason Ding took number one in 2018, while the top 10 has regularly been peppered with companies that own the largest mobile portfolios.

This year is no exception, with the top of the table once again hosting the giant Chinese telco, as well as leaders from Ericsson, InterDigital, Nokia, Qualcomm and Samsung. When you also include Apple, which is set to own one of the widest portfolios covering 3G, 4G and 5G technology once its deal with Intel closes, then our top 10 is dominated by companies that are shaping the next generation of mobile technology.

The nature of 5G, which promises to connect far more devices to the Internet than the smartphone in your pocket or laptop on your desk, means that the competitive landscape is becoming ever more complex. While this may prompt concerns of possible conflicts between rights holders and manufacturers, according to Ericsson’s chief IP officer Christina Petersson, the litigation battles that break out in the space often mask the relative peace in the sector. “Thankfully most deals are done without litigation,” she points out.

For Jenni Lukander, head of Nokia Technologies, this cooperation extends to the automotive sector. In March German manufacturer Daimler filed a complaint with the European Commission over Nokia’s licensing practices for its SEPs, signalling that attempts to license the car industry may be running into some familiar litigation problems. That dispute, Lukander insists, is atypical, as the company has also seen “more than 10 automotive brands become licensed to our cellular SEPs”.

“It’s not unusual in the early stages of a new market to see some friction,” she continues. “But I am confident that with time there is more to be achieved if we all work together.”

While automotive is shaping up to be one sector in which 5G supports an even greater use case for mobile connectivity, the application of 5G in other industries where wireless technology is largely yet to penetrate will become one of the distinguishing marks of mobile’s new generation. Even among experts it is not yet clear how far 5G’s reach will go. “We don’t know all of the different use cases yet, so we don’t know who some of the customers are going to be,” Petersson explains. This means, she says, that the company needs to be flexible, ensure that its timing is right and be transparent with potential new customers. In light of this, it is notable that several of the largest SEP owners – including Ericsson, Nokia and Qualcomm – have announced their 5G royalty rates for mobile devices. This may not be what users in other sectors end up paying, but it does reflect a recognition that licensors need to be upfront about their demands.

It is too early to determine who will emerge, in IP terms, as the 5G leader. Over the past year there has been a growing volume of data detailing which companies are making the greatest contributions to the new standard – and some of this has been given a misleading slant or simply been over-hyped. However, it appears safe to assume that Ericsson, Huawei, Nokia, Qualcomm, Samsung and possibly now Apple will own the leading portfolios and are likely to see the biggest returns. For Ericsson, Nokia and Qualcomm, that should mean billions of dollars in licensing revenue.

For the time being, much of the focus is on the roll-out of the technological infrastructure that will power new 5G devices. As Lukander points out: “Typically, licensing deals lag behind the commercial launches of networks for any new standard.” Nevertheless, as those deals are struck, you can be sure that mobile’s IP leaders will continue to feature prominently in our top 40.


35

Michael Friedman

Hilco IP Merchant Banking

Hilco IP Merchant Banking remains one of the few players to marry profound technical expertise in, and knowledge of, the patent landscape with the investment savvy and deep pockets of Wall Street. CEO Michael Friedman has been instrumental in building this potent monetisation force.


34

Toshimoto Mitomo

Sony

Toshimoto Mitomo came up through Sony’s IP function, but as a corporate executive his remit is much wider, which explains the Japanese giant’s strategic approach to IP value creation. In addition to its usual licensing negotiations, Sony recently wrapped up a dispute with Fujifilm and has undertaken an extensive AI-related open source initiative.


33

Kenichi Nagasawa

Canon

Canon has been a top portfolio owner and significant patent policy voice for as long as Kenichi Nagasawa has led its IP function, making recent forays into third-party transactions and assigning patents to the License on Transfer (LOT) Network and Samsung. The company has also taken the rare step of enforcing against another leading tech firm, TCL.


32

John Lindgren

IPValue

With a key focus on the semiconductor space, IPValue is an established name that is enjoying something of a resurgence in the licensing market, having notched up significant deals with Samsung and Mediatek. As the NPE’s CEO for a little over two years, John Lindgren has demonstrated that transactions can still be carried out in a tough market; in the process, he has enabled the company to rack up more than $400 million in licensing revenues.


31

Ramzi Haidamus

Immersion

At the start of the year, Immersion – an NPE focusing on haptics-based technology – appointed former Nokia Technologies head and Dolby licensing executive Ramzi Haidamus as its new CEO. Under his leadership it has enjoyed a string of highlights, including settlements with Samsung and Motorola that ended long-running litigation and led to Haidamus declaring that Immersion was litigation free.

Trade war casts long shadow on deals market

A technology and business story as wide ranging as the US-China trade war is bound to affect the patent deals market, especially with IP rights being used as a political football between the two great powers. A look at the IP deal market in Asia over the past year turns up some interesting transactions involving China, but market experts indicate that these pale in comparison to the deals that are not happening.

Rather than export restrictions or political edicts, much of the challenge is raised by the economic burdens that the trade war has placed on Chinese tech companies – a major licensing constituency. “The economic uncertainty makes it harder to do deals with Chinese companies,” confirms one market maker with a track record of deals in the country. “Now would be an almost impossible time to do a deal with them.”

Greater regulatory attention is having an impact too. “We’ve had six different deals that died because of China or because of the Committee on Foreign Investment in the United States,” says Houlihan Lokey’s Elvir Causevic, referring to CFIUS, the US body empowered to scupper technology deals on national security grounds. He adds that only some of the slack is picked up by European corporates still willing to do China-bound tech and IP deals.

One of the biggest stories of 2019 was the Intel 5G patent auction. In times past it may have been an opportunity for a deep-pocketed Chinese upstart to make a big splash, but although some China-based companies were reportedly taking part in the process before it was called off, a Chinese takeover of the whole portfolio was never going to happen.

Nevertheless, the fact that Oppo was able to nab a few Intel SEPs before the sale to Apple shows that smaller deals – and those based on so-called ‘naked’ patent portfolios – are still possible between US and Chinese firms. Even Huawei’s post-entity listing has added small patent portfolios from third-party US sellers.

It could be that some deals involving patent transactions to China are being kept relatively low profile. Ericsson got a huge result for its business when it licensed Oppo in February 2019 and has subsequently transferred hundreds of wireless patents to the Chinese company. Yet both companies’ official announcements mentioned the licensing aspect only.

YP Jou, whose firm MiiCs represents not only Foxconn but also other companies looking to do transactions in China (notably, Japanese firms), thinks that the appetite for foreign patent acquisitions among Chinese companies is relatively undiminished. “Most Chinese clients ask us to evaluate US and European rights, especially German patents,” he observes.

Licensors give mixed reviews on how the tensions are affecting day-to-day talks. Xiaomi’s Paul Lin reports that his team is engaged in negotiations on multiple fronts and is as willing as ever to make smart licensing deals on a pragmatic basis. What matters for Lin is that a portfolio is “high quality, proven in the marketplace and tested around the world by various parties”.

While some negotiators may be dealing with delays and uncertainties in the short term, there are longer lasting questions that could have substantial effects on the future of licensing. For example, will Chinese companies become more focused on the domestic market? Foreign licensors find it much more difficult to make money off of Chinese products sold in China, so that would be a significant setback. Are Chinese courts a viable enforcement option for foreigners? The answer could affect monetisation entities that made big bets on Chinese patents.

“China became the number one patent holding country and it is now trying to improve quality, but at the same time a lot of open innovation and open source is going on,” observes Sony’s Toshimoto Mitomo, who recently represented his company in a meeting between Japanese industry leaders and Chinese premier Li Keqiang. He believes that both trends are important going forward and may call for some kind of combined licensing play tailored to the Chinese market. Mitomo also sees firms increasingly adopting customised strategies for different major regions such as China, India and Southeast Asia.

When dismay over the US patent environment peaked a couple of years ago, it was common for monetisation entities to announce new focuses on China and Germany (or Europe as a whole). While some of those firms have made money in China, few are still touting it as their big growth story or initiating extensive assertion campaigns in Chinese courts. The shifting dynamic of the past few years shows that diversified portfolios remain a good bet in interesting times such as these.


30

Michael Lee

Google

Patents may have dropped down the priority list at Google but there is no doubt that the search giant continues to hold considerable sway with a huge portfolio of assets, an influential voice in policy circles and a significant stake in initiatives such as the LOT Network. Two years since taking on his role as head of patents, Michael Lee has kept a steady hand on the tiller through a period of relative patent peace.


29

David Pridham

Dominion Harbor

Over the past year, David Pridham has been adding to the formidable arsenal that makes Dominion Harbor Enterprises one of the biggest NPEs. Most recently, it acquired thousands of Panasonic patents in two batches, while new licensees include wearables maker Garmin and payments provider Square.


28

Paul Lin

Xiaomi

Paul Lin leads one of China’s most analytically sophisticated IP departments, according to deal partners. Although Xiaomi has slowed down its buying activity as it handles many ongoing licensing talks, some hush-hush deals have emerged from these efforts in the past few months.


27

Jeremiah Chan

Facebook

Since taking over as head of patents at Facebook in 2018, Jeremiah Chan has brought new energy to the role, spearheading a period of buying activity and honing a laser focus on the value that intellectual property brings to the social media colossus. His championing of the application of data analytics in patent prosecution and portfolio maintenance has made Chan a key voice in an increasingly important field.

Hail to the chief

The rise of the chief IP officer (CIPO) has been one of the leading trends of the past 20 years in the global patent market. It comfortably pre-dates our first market makers top 40, but each year our rankings have reflected the extent to which the IP heads at the world’s largest patent-owning businesses have extended their reach and influence.

This has been a logical development. The largest operating companies boast R&D budgets that stretch into the billions of dollars, they sit on the biggest patent portfolios churning out thousands of new grants every year and, while they pursue infringement claims relatively rarely, when they do turn to the courts those cases tend to have huge strategic significance.

But has the role of CIPO made the kind of leap up the corporate hierarchy that some hoped or predicted in the mid-2000s? The answer to that depends on what your initial expectations were.

In a 2007 IAM cover story titled “The CIPO manifesto”, IP strategist Ron Laurie and Robert Sterne of Sterne Kessler Goldstein & Fox made the case for an IP leader to be given the kind of internal sway befitting the rise of intellectual property and, more specifically, patents as an asset class. That included reporting into the CEO or another senior member of a company’s leadership team.

Together they painted a picture of the traditional IP function buried within an in-house legal team, maintaining a company’s patents, trademarks, copyright and trade secrets. For the relatively small cohort of businesses that might try to commercialise those assets, the task would lie elsewhere in the legal function.

Against that backdrop, TiVo CIPO Arvin Patel points out: “We’ve come a long way.” As he describes it, the role has expanded considerably to encompass areas such as IP policy and even advising management on which areas of technology to invest in. At TiVo, Patel is responsible for a licensing function that brings in several hundred million dollars in revenue each year, giving him considerable influence internally.

However, there are relatively few IP heads in Patel’s kind of position (although you can find many of them in the upper echelons of our top 40) and as licensing conditions remain tough, particularly in the United States, that group is set to stay relatively small. Launching a royalty-based licensing programme is challenging and when many companies consider the disruption that it may cause to a supply chain or customer base, they tend to walk away from building one.

Creating value from intellectual property is about more than just generating licensing dollars but being responsible for a revenue-generating business can make it far easier for an IP head to win the ear of company leaders. Of course, in some sectors (eg, life sciences), businesses derive so much value from their intellectual property – with a handful of patents possibly protecting billion-dollar products – that senior management can easily appreciate the importance of having IP experts in its ranks. But for many others, intellectual property can appear a peculiar asset class that is more closely associated with costly litigation than value creation.

For those who question just how much influence the typical modern day CIPO has in the corporate world’s upper levels, a key problem is that the role is typically reserved for lawyers or that intellectual property remains a function of the legal department. This, they claim, means that IP heads do not get the necessary perspective on a company as a whole and fail to understand the main concerns of senior leadership.

Reflecting on what Laurie and Sterne wrote in 2007, it seems clear that the CIPO role has progressed but, if anything, it may have plateaued in terms of its position in the typical corporate hierarchy. The good news is that the current crop of IP leaders is gaining the kind of analytics tools that could give them a serious edge over their predecessors. Portfolio evaluation and identifying where the true value lies among a company’s thousands of patents will become increasingly automated.

New tools should also help the IP heads of tomorrow to identify and mitigate IP risk. As data becomes increasingly important to modern businesses, CIPOs have the opportunity to interject on how it is managed and possibly commercialised. While they will no doubt continue to feature prominently in our top 40, the challenge remains to what extent they can further progress up the corporate pecking order.


26

Heath Hoglund

Dolby

Dolby’s patent licensing function – led by Heath Hoglund – complements its branded technology business by identifying IP-driven deal opportunities. Its strong preference is to work through pools, including not only subsidiary Via Licensing, but also others such as HEVC Advance. This platform-based approach should help the company to maintain its position as a top IP earner.


25

Russell Binns

Allied Security Trust

As CEO of defensive patent operator Allied Security Trust (AST), Russell Binns is at the heart of the secondary transactions market. In particular, AST’s stewardship of the IP3 buying platform, along with its usual patent deal-making activity, gives him an excellent view of the landscape.


24

Mattia Fogliacco

Sisvel

Sisvel CEO Mattia Fogliacco is shaking up the traditional patent pool model, as demonstrated by the company’s January 2019 announcement of a syndicated deal with RPX. The transaction, which will provide an unknown number of RPX subscribers with access to the WiFi SEPs of 11 Sisvel members, could be a way forward for an increasingly fragmented patent market.


23

Mathen Ganesan

Intellectual Ventures

As executive vice president of IV’s Invention Investment Funds, Mathen Ganesan occupies a key position. Although the company still sells assets to a range of businesses, it remains a considerable licensing force – as confirmed in June 2019, when the giant NPE announced that it had agreed a licensing deal with Ericsson, bringing lengthy litigation between the pair to an end.


22

Adler Feng

Oppo

Oppo has big ambitions in the SEP space; under Adler Feng’s leadership, it has been using licensing deals as a canny means to boost its own patent portfolio. Its largest coup yet came in early 2019, when the Chinese firm netted hundreds of wireless patents from Ericsson after signing a licence agreement that was much sought-after by the Swedish company.

Market makers eye new platform approaches

Over the past 12 months, there have been several deals between members of this year’s IAM Market Makers, but one of the most interesting was the SEP licensing agreement announced in January by RPX and Sisvel.

The structure of this, with Sisvel representing 11 patent owners and RPX acting as a syndicator on behalf of implementers, underlines a strong demand from both sides of the licensing market for more efficient, alliance-based solutions to licensing.

However, to push this past the line, Sisvel had to depart from the traditional licensing administrator model, securing itself a broader mandate to negotiate than pool operators have typically had in the past. What is more, the model has come into question in other tech areas – notably, high-efficiency video coding (HEVC), in which a fragmented pool environment has caused frustrated industry players to go back to the drawing board, with a new alliance aimed at creating a better solution for the next generation of video.

Few fields are currently more contentious than automotive. Avanci’s efforts to license wireless SEPs to OEMs through its platform built up significant momentum over the past year, as the firm brought Nokia on board as a licensor and scored a second major European deal with Volkswagen. But it has also set off an enormous cross-jurisdiction litigation battle, pitting supplier Continental and OEM Daimler against Avanci and several of its members.

Sharp is one of the Avanci licensors now asserting SEPs against Daimler in German courts. YP Jou – founder of IP consulting firm MiiCs and head of ScienBiziP Japan, the Foxconn-owned company’s spun-out IP function – tells IAM that it will take some time for OEMs to accept this model, especially in Sharp’s home country of Japan. In Jou’s analysis, “automaker CEOs are still very resistant to negotiating”, forcing the hand of patent owners. However, he is optimistic that all parties will be sitting down and negotiating in six months to a year’s time.

Sony executive Toshimoto Mitomo – whose company is also an Avanci licensor – echoes the idea that certain industries just need more time to adapt to the new licensing paradigm, pointing out that the same transition happened when consumer electronics converged with information technology. Asked why Sony endorses the model, he replies: “We’re an operating company, not an IP company, so at the end of the day, my agenda is how we can scale the business. We try to be collaborative because if the whole industry grows, my business grows as well.”

Moreover, Jou sees a platform approach to licensing as part of the future for his transactions advisory firm. “My plan is from next year, MiiCs will go into operating patent pools,” he says, maintaining that the firm can compete with existing operators through his company’s patent analytics prowess and extensive connections throughout Asia – especially mainland China, which has proven a formidable challenge for most overseas pools.

Of course, the HEVC experience suggests that an influx of new operators could actually dent the appeal of patent pools if none are able to lock down a significant enough share of the patents in a certain technology. Still, the pool model has enduring appeal to those who have seen it work.

Ramzi Haidamus, who founded Via Licensing during his long tenure with Dolby and now heads up Immersion, would like to see his firm’s relatively young technology move in that direction. “I think haptics is something that needs to be standardised,” he says. “We should start levelling the playing field with equal access and reasonable pricing so that haptics becomes democratised.” For Haidamus, a pool would be the next logical step.

Pools, platforms and alliances may well be the future, but transactions from the past year suggest that individual deal makers will continue to play a key role in creating industry buy-in around more efficient licensing structures.


21

Dan McCurdy

RPX

After taking over as CEO of RPX in September 2018, Dan McCurdy hit the ground running with a string of deals with IP owners – a clear sign that the defensive aggregator remains at the centre of the patent market. These successes included a licensing agreement with 10 companies for 595 semiconductor assets owned by IP Bridge and a deal signed with Sisvel for a portfolio of WiFi SEPs.


20

Jako Eleveld

Philips

Jako Eleveld heads the licensing team in Philips’ storied IP and standards group. The company has been taking a lower profile approach to intellectual property of late but has seized opportunities for new deals, including a patent sale to Mediatek and a hook-up with Samsung Electronics as the two work jointly on an Internet of Things (IoT) platform.


19

Laura Quatela

Lenovo

Recent infringement complaints targeting Lenovo suggest that it has been driving a hard bargain with major SEP licensors such as Nokia and InterDigital under senior vice president and chief legal officer Laura Quatela. The company is fortunate to have such a seasoned patent expert in a senior legal role, with head of intellectual property Ira Blumberg having departed earlier this year.


18

Yoshiaki Tokuda

Panasonic

Since Panasonic learned to love NPE deals under his predecessor, Yoshiaki Tokuda has continued many of these profitable relationships over the past two years. The Japanese company sent more than 4,000 patents to Dominion Harbor in the last year and Tokuda has managed to hook new customers including GoerTek, a notable Chinese Apple supplier.


17

YP Jou

ScienBiziP

YP Jou is a man with many titles but the former Foxconn general counsel is principally engaged as a one-stop-shop external service provider for the company that he served in-house for 18 years. One of his current projects is to turn Japanese acquisition Sharp into a licensing powerhouse – an SEP deal with Samsung this year was a promising start.


16

Arvin Patel

TiVo

With a possible split from the product business and an ongoing courtroom battle with Comcast, these are uncertain times for TiVo’s licensing arm. Although this gives chief IP officer (CIPO) Arvin Patel plenty of challenges, it also provides potential opportunities in a business that remains one of the largest licensing players out there.


15

Mark Terrano

Broadcom

Even in a semiconductor industry that is one of the busiest in terms of IP value creation, Broadcom stands out for wielding its global portfolio with considerable force. Under Terrano, general manager of intellectual property and licensing, it has looked to strike licensing deals in a growing number of sectors – including in the auto space, where it has pursued lawsuits against the likes of Volkswagen and Toyota.


14

Bill Merritt

InterDigital

Commanding both a strong home-grown wireless portfolio and thousands of patents acquired in its deal for Technicolor’s licensing assets, InterDigital has become one of the biggest pure-play licensors in the business under CEO Bill Merritt. Although he has spent the past few years preaching the gospel of arbitration, a return to the courtroom in London this summer in a case against Lenovo is a sign that InterDigital is still willing to get tough.


13

William LaFontaine

IBM

IBM’s acquisition of Red Hat may ultimately prompt a change in its patent strategy, but for much of the past 12 months it has been more of the same as Big Blue remains a key player in the market. Among recent significant deals was a June 2019 disposal of a portfolio of more than 1,000 US assets to software company Pure Storage.


12

Joe Sommer

AT&T

It is testament to the quality of AT&T’s patent portfolio that it continues to be a popular source of assets among tech titans such as Facebook, Red Hat and Uber. Those sales also highlight the deal-making skill of Joe Sommer and his team, who use the giant telco’s huge portfolio as a way of generating considerable value for the business.


11

James Kovacs

Intel

Intel is not typically in the patent transactions spotlight but the sale this summer of its smartphone modem business placed the company and James Kovacs, director of the chipmaker’s licensing, trademarks and standards group, at the centre of the deal-making market.


10

Eran Zur

Fortress

With thousands of assets in its portfolio, plenty of capital to invest and an extremely savvy team, Fortress’s IP group – led by Eran Zur – casts a long shadow over the licensing landscape. Since its creation in 2013, it has acquired patents from a string of NPEs and operating companies and proven its ability to attract capital by launching its own fund in 2018. Zur and his team have been in and out of the headlines this year, thanks in part to a litigation campaign involving patents previously owned by NPE Uniloc, which targeted numerous players in the Big Tech community. The group is also engaged in a simmering lawsuit with former IPNav founder Erich Spangenberg over the licensing rights to a patent formerly controlled by Marathon Patent Group. The fight confirms one truism of the market that Zur presumably knows only too well: IP monetisation is rarely easy.


9

Yosuke Iida

Toyota

Yosuke Iida was appointed general manager of Toyota’s IP division in November last year, receiving the baton from the highly respected executive Kenji Kondo (who remains involved with the IP function). It did not take long for the automaker to make a splash in the IP market. In April it announced that it will make 24,000 patents related to hybrid technology available for licence on a royalty-free basis, opening up technology that Toyota had previously licensed out to the likes of Nissan and Ford. The company is hoping to profit from the move by not only encouraging diffusion of the technology, but also providing fee-based technical support to hybrid adopters. In the SEP space, all eyes remain on the world’s biggest car manufacturer and its supply partner Denso, which are key players in the ongoing debates over licensing models in the auto industry.

New entrants illustrate diverse monetisation strategies in today’s patent market

This year’s edition of the IAM Market Makers contains nine executives who have never been named among the top 40 before. What is more, three of these represent companies making their first-ever appearance as well. The firms – Dolby, Immersion and Houlihan Lokey – have three distinct strategies, illustrating the varied ways that savvy businesses profit off the back of patents in today’s market.

Let us start with Heath Hoglund of Dolby, an operating company that takes an all-of-the-above approach to IP value creation. It sells products (eg, cinema speakers) that are protected by patent and trademark rights in the most traditional model of corporate IP protection, but also has a branded technology licensing division, which sells bundled solutions (eg, software, trade secrets, know-how and engineering support) to other product makers.

Hoglund’s team comes into the monetisation picture through the company’s patent licensing business. The firm’s R&D efforts leave it with a substantial number of rights – often SEPs related to audio and video codecs – that are not included in branded tech deals. This means that Hoglund’s team sometimes negotiates for patent royalties from a company that is already a customer of Dolby’s branded tech business.

For this and other reasons, the outfit has a strong preference to work through patent pools and avoid litigation. Not only did it establish subsidiary pool operator Via Licensing, it also participates in platforms run by HEVC Advance and MPEG-LA. As more industries gravitate towards platform-based licensing models long favoured in audio video, a growing number of high-tech companies are going to be studying the Dolby model.

Immersion is also a company with a strong R&D function, but by contrast it has operated more as a pure-play patent licensor. Royalty revenue is fundamental to its business – a fact underlined by its appointment of licensing veteran Ramzi Haidamus in early 2019. Having spent 17 years at Dolby (founding Via during that time) before a two-year stint leading Nokia Technologies, Haidamus is showing signs of bringing in key tenets of the company’s philosophy.

The San Jose-based developer of haptics technologies has been celebrating a strong set of results in licensing. This year it announced new mobile deals with Samsung Electronics and Google, which followed a 2018 pact with Apple. The company also sealed a pivotal agreement in the gaming sector with Sony, which will see its technologies implemented in the next generation of the PlayStation console.

But Haidamus, whose first move was to initiate settlement talks with Samsung, makes clear that Immersion is going to be about much more than litigation on his watch. “The company was in heavy litigation mode when I took over… and it became clear that that path wasn’t sustainable,” he tells IAM. That meant going back to its roots and re-engaging the engineering team so that Immersion could sell its product as a technology solution, not just a set of patent rights.

No company has been more central to the patent-private equity nexus than Houlihan Lokey, the leading investment bank to the private equity sector, since it acquired Black Stone IP in 2017. The firm’s IP+tech advisory practice, which is captained by Elvir Causevic, brings an approach that is informed by investment banking and traditional M&A advisory to transactions of patent portfolios, licensing programmes and IP-related businesses.

This has already led to a diverse flow of deals. In the past year, Houlihan Lokey was engaged by Microchip Technology on a patent portfolio sale, advised private equity fund HGGC on its takeover of RPX and worked with Intellectual Ventures on the sale of its third Invention Investment Fund.

Private money is only going to play a bigger role in the IP market over the next few years, Causevic says, pointing to recent deals such as GCM Grosvenor’s investment in Provenance and Brevet Capital’s purchase of PanOptis. “Living, breathing, healthy licensing programmes are what they’re looking for,” he enthuses. That could make for another year of deal-making highlights for all 40 of the executives on this list.

Five years of market makers

When we started to compile the first IAM Market Makers back in 2014, one of our driving motivations was to cast more light on an IP market that remains, in parts, stubbornly opaque. Some of the names and companies to include were obvious; leaders from Microsoft, Qualcomm and IBM featured prominently in our first top 40 and continue to be well represented in the upper echelons of this year’s list. Others have come and gone – most notably, various members of the NPE community which featured in our early rankings.

Here are three of the biggest takeaways on how the top 40 has chopped and changed.

The decline of the NPEs

Although this was in motion in 2014, it was arguably in 2015 and 2016 as inter partes reviews started to really hit patent owners and the full effects of the Supreme Court’s Alice decision became apparent that the serious decline of NPEs set in. Our leading names in 2014 included Intellectual Ventures co-founder Peter Detkin at number two and IPNav founder Erich Spangenberg rounding out the top five. Overall, there were seven NPE executives in the top 20 of our first ranking, plus Fortress’s Eran Zur, who was on the way to effectively becoming one of the largest players in the licensing market. NPEs may still return in force as conditions improve and several feature in our top 40 this year, including the reappearance of Acacia in the IP space, but for now it is operating companies that dominate.

The rise of Asia

The IP markets in China, Japan and South Korea were already hugely influential when we compiled our first Market Makers, but Asian-based businesses have only grown their reach in the global patent system since then. This is in large part down to the rapid evolution of the Chinese market, which has shone the spotlight on a new crop of companies and IP executives, making them far more influential in value creation terms. In 2014 Lenovo’s Ira Blumberg was the highest placed executive from an Asian-headquartered business at number 23. Last year Huawei’s Jason Ding became the first IP leader from the continent to take top spot as our leading market maker; while he has slipped back to number three here, our top 20 includes six individuals who work for companies with an Asia HQ. The extent to which that constituency grows may be one of the key themes over the next five years of market maker rankings.

A different herd of bulls

In 2014 the market was still close enough to its deal-making high of 2011 and the Nortel patent auction for it to remain of interest to the investor and investment advisory communities – and our initial top 40 reflected that. Yoav Roth from hedge fund Hudson Bay Capital, which had backed the formation of several public IP companies, was at number seven; Jeffrey Smith, head of activist investor Starboard Capital, which had used its leverage at several companies to argue that they make better use of their intellectual property, was at 13; and Naveen Nataraj, who had advised on several IP deals at investment bank Evercore, featured at number 16. The investors or investment advisers on this year’s list – namely, Eran Zur from Fortress, Hilco’s Michael Friedman and Elvir Causevic from Houlihan Lokey – are arguably far more closely entwined with the IP system and with patents as an asset than the original crop. Marrying an understanding of Wall Street with knowledge of the IP system is a rare skillset but their numbers may grow as market conditions for monetisation improve.


8

Kasim Alfalahi

Avanci

Under the direction of Kasim Alfalahi, who also leads the broader Marconi Group, IoT licensing platform Avanci has closed big agreements on both the licensor and licensee side over the past year and greatly improved its share of SEP wireless patents by persuading Nokia – one of the biggest remaining holdouts – to become a member in late 2018. It also built on the momentum of its first big auto deal (a pact with BMW) and brought the Volkswagen group on board this spring. However, the platform has attracted significant pushback in the form of an antitrust lawsuit filed by supplier Continental against Avanci and several of its licensors. Courtroom battles in the United States and Europe will form a difficult backdrop against which to negotiate further deals in the auto space.


7

Jason Ding

Huawei

Probably no company in all of tech has had a more eventful year than Huawei and the IP department, led by Jason Ding, has found itself in the global hotseat over patent and trade secret issues several times. A licensing demand sent to Verizon sparked alarm among some US law makers and even provoked proposed legislation. However, if mainstream observers had been paying attention to the Chinese giant’s IP strategy, they would know that there is nothing new about its attempt to exploit the revenue generation potential of its patent portfolio. In the interests of transparency, Huawei released numbers on that effort for the first time this summer, revealing that its nascent out-licensing programme has netted $1.4 billion in royalties over the past four years. It is still unknown exactly how its operating business will be affected by US export restrictions, but Huawei’s strong 5G patent portfolio and the IP relationships forged by Ding may become even more crucial going forward.

Table 1. Our top five market makers – 2014-2018

 

2014

2015

2016

2017

2018

1

Horacio Gutierrez, Microsoft

Allen Lo, Google

Erich Andersen, Microsoft

Ilkka Rahnasto, Nokia

Jason Ding, Huawei

2

Peter Detkin, Intellectual Ventures

Erich Spangenberg, nXn Partners

Allen Lo, Google

Erich Andersen, Microsoft

Ilkka Rahnasto, Nokia

3

Steve Mollenkopf, Qualcomm

Kasim Alfalahi, Ericsson

Jason Ding, Huawei

Jason Ding, Huawei

Alex Rogers, Qualcomm

4

Ken King, IBM

John Amster, RPX

Mark Kokes, Blackberry

Alex Rogers, Qualcomm

Erich Andersen, Microsoft

5

Erich Spangenberg, IPNav

Jim Skippen, WiLAN

Erich Spangenberg, Marathon

Gustav Brismark, Ericsson

Gustav Brismark, Ericsson


6

Lee In Jung

Samsung

Samsung’s Lee In Jung is the new man in charge of the world’s largest patent portfolio, having been appointed after the departure of long-time executive Seungho Ahn. But Lee is hardly a new face; the company’s negotiating partners say that he has been a constant fixture at the highest levels of key licensing negotiations – and there has been no shortage of those over the past year. Samsung called off its biggest ongoing dispute when it reached a settlement and cross-licence deal with Huawei on undisclosed terms in February. It remains a top filer and has been known to buy third-party assets, while also assigning away patent portfolios as part of licensing pacts and having dealt freely with NPEs as it seeks to divest unused assets. As Chinese firms face headwinds outside the domestic market, Samsung is set to be the first name in smartphones for some time and Lee will lead a business that remains a prime target for would-be deal makers.


5

Erich Andersen

Microsoft

Senior vice president for intellectual property Erich Andersen has guided Microsoft’s storied IP department through one of the most fascinating transformations in recent history. The company has gradually shifted its focus from hauling in licensing revenue to bolstering its broader offerings in the Cloud and other businesses. The announcements that Microsoft would join the LOT Network and the Open Invention Network (OIN) epitomised just how much has changed in Redmond, Washington. “We determined that it was more valuable long term for Microsoft to grant a licence essentially to the world through the OIN and LOT commitments for these Linux system assets than it was to hold onto them and license them independently through deals,” Andersen said. That is about as bold a call as an IP licensing executive can make, and it is still reverberating around the IP market. Microsoft’s next move could define what the following era of corporate IP strategy looks like.


4

Christina Petersson

Ericsson

After Gustav Brismark’s abrupt departure in early 2019, Ericsson upheld its tradition of promoting from within by appointing Christina Petersson as CIPO. A 20-year company veteran who started at the telecoms giant as a trademark attorney, Petersson was vice president and head of IP legal affairs before being raised to her new role. Like many licensors dealing with the transition from 4G to 5G, Ericsson has seen its fair share of challenges in recent years, including a long-running tussle with Chinese device maker TCL over FRAND licensing terms. Nonetheless, there are signs that market conditions are improving for Petersson and her team – such as the February announcement of a new licensing agreement with Oppo, one of the leaders in a new generation of smartphone manufacturers in China.


3

Jenni Lukander

Nokia

In June Jenni Lukander was handed one of the top roles in the IP value creation world when she was appointed president of Nokia Technologies, giving her oversight of the Finnish telco’s vast licensing arm. The promotion marked a rapid rise through Nokia’s IP ranks for Lukander; in October 2018 she was made head of the company’s patent business, having served briefly as head of licensing, and before that as global head of litigation and competition. Her background as a competition specialist should serve her well given the numerous antitrust considerations in handling a global portfolio of SEPs. Nokia’s attempts to license its intellectual property into new sectors has already been met with some resistance, with Daimler filing a complaint before the European Commission over the telecoms company’s licensing of its wireless patents in the auto space. With control of a business that generates well over $1 billion, how Nokia monetises its intellectual property across a wide range of industries will be the principal test of Lukander’s leadership.


2

Alex Rogers

Qualcomm

Even for a licensing executive with a track record as impressive as his, Qualcomm’s recent ups and downs may have left Alex Rogers feeling more than a little dizzy. Its settlement with Apple in April prompted an immediate jump in the chip giant’s share price as investors weighed in on who they thought had won the lengthy courtroom spat over Qualcomm’s licensing practices. But celebrations were quickly ended with a stinging verdict from a Northern California district court in a lawsuit raised by the Federal Trade Commission (FTC) again in relation to how the San Diego-based business licenses its huge patent portfolio. The verdict has been stayed pending an appeal, which is set to be heard in early 2020. As head of Qualcomm Technology Licensing, Rogers presides over a vast profit generator in a company which continues to set the pace among chipmakers in the roll-out of 5G. With its technological dominance confirmed, at least in the short term, the main question mark confronting Rogers and his team will be the outcome of the FTC’s lawsuit. A lot is riding on 2020.


1

Jeff Myers

Apple

When Jeff Myers took over as Apple’s chief IP counsel in November 2018 the iPhone giant was already in the midst of a market-shaping licensing dispute with Qualcomm. That fight, which mirrored a case brought by the FTC in the closing days of the Obama administration, was ultimately settled out of court in April, when Apple was faced with the prospect of being unable to deliver a 5G-compatible phone until long after its closest competitors.


The IAM Market Makers 2019

1

Jeff Myers, Apple

2

Alex Rogers, Qualcomm

3

Jenni Lukander, Nokia

4

Christina Petersson, Ericsson

5

Erich Andersen, Microsoft

6

Lee In Jung, Samsung

7

Jason Ding, Huawei

8

Kasim Alfalahi, Avanci

9

Yosuke Iida, Toyota

10

Eran Zur, Fortress

11

James Kovacs, Intel

12

Joe Sommer, AT&T

13

William LaFontaine, IBM

14

Bill Merritt, InterDigital

15

Mark Terrano, Broadcom

16

Arvin Patel, Tivo

17

YP Jou, ScienBiziP

18

Yoshiaki Tokuda, Panasonic

19

Laura Quatela, Lenovo

20

Jako Eleveld, Philips

21

Dan McCurdy, RPX

22

Adler Feng, Oppo

23

Mathen Ganesan, Intellectual Ventures

24

Mattia Fogliacco, Sisvel

25

Russell Binns, Allied Security Trust

26

Heath Hoglund, Dolby

27

Jeremiah Chan, Facebook

28

Paul Lin, Xiaomi

29

David Pridham, Dominion Harbor

30

Michael Lee, Google

31

Ramzi Haidamus, Immersion

32

John Lindgren, IPValue

33

Kenichi Nagasawa, Canon

34

Toshimoto Mitomo, Sony

35

Michael Friedman, Hilco IP Merchant Banking

36

Marc Booth, Acacia

37

Elvir Causevic, Houlihan

38

Randall Cook, Blackberry

39

SG Jeon, LG Electronics

40

Minoru Fujiki, IP Bridge

The IAM Market Makers 2018

1

Jason Ding, Huawei

2

Ilkka Rahnasto, Nokia

3

Alex Rogers, Qualcomm

4

Erich Andersen, Microsoft

5

Gustav Brismark, Ericsson

6

Bill Merritt, InterDigital

7

Seungho Ahn, Samsung Electronics

8

Laura Quatela, Lenovo/Quatela Lynch McCurdy

9

Kasim Alfalahi, Marconi/Avanci

10

Eran Zur, Fortress

11

Arvin Patel, TiVo

12

Kenji Kondo, Toyota

13

William LaFontaine, IBM

14

Joe Sommer, AT&T

15

YP Jou, ScienBiziP

16

Sandeep Chennakeshu, Blackberry

17

Paul Lin, Xiaomi

18

Yoshiaki Tokuda, Panasonic

19

David Pridham, Dominion Harbor

20

Toshimoto Mitomo, Sony

21

Mark Terrano, Broadcom

22

Jako Eleveld, Philips

23

Bill Coughlin, Ford

24

Marty Roberts, RPX

25

Feng Ying, Oppo

26

Mike Lee, Google

27

Mathen Ganesan, Intellectual Ventures

28

Mattia Fogliacco, Sisvel

29

Joe Siino, Via Licensing

30

Russell Binns, Allied Security Trust

31

Kenichi Nagasawa, Canon

32

Shigeharu Yoshii, IP Bridge

33

BJ Watrous, Apple

34

Phil Hartstein, Finjan

35

Kurt Brasch, Uber

36

Dongsuk Bae, Intellectual Discovery

37

Michael Friedman, Hilco IP Merchant Bank

38

Dan McCurdy, Provenance Asset Group

39

Keaton Parekh, Quarterhill

40

Didier Patry, France Brevets

The Qualcomm settlement – in which Myers’ predecessor BJ Watrous remained closely involved even after he had moved to a new role within the business – resulted in Apple taking a six-year licence (with a two-year option to extend), as well as a multi-year deal to buy its litigation rival’s chipsets. However, any thoughts among senior leadership about a change of pace over the summer were immediately quashed when the news emerged that Intel was pulling out of the smartphone modem business and putting that arm of the company up for sale.

Reports quickly surfaced that Apple was the most likely buyer and while Intel flirted with alternative suitors for its 3G, 4G and 5G patents through an auction process, the iPhone maker eventually agreed on a deal for all of the business in late July. At the time of writing, the transaction was due to close at the end of 2019 and will ultimately add 2,200 former Intel employees to Apple’s workforce, as well as a vast stockpile of grants split between cellular and connected device portfolios.

This will give Myers, who joined Apple in 2011 from Adobe, a prime seat at the IP table as the latest iteration of wireless technology is rolled out. It is too early to say what Apple may do with its newfound patent assets, but it seems clear that its over-riding objective is to get its own 5G chips into its phones as quickly as possible. Myers’ team will no doubt be doing all that it can to support those efforts.

For the time being, it is unlikely that Apple is about to suddenly change tack and pursue a string of royalty-bearing licensing agreements. However, the influx of talent and intellectual property will allow it to occupy a new position in parts of the standard-setting world, potentially increasing its strength when it comes to renegotiating licensing agreements with the patent-owning giants of the mobile space.

The Intel transaction was such a market-shaping deal that this year we decided to name Myers as our number one market maker – the first time that an Apple executive has taken the top spot. Since it played a leading role in the 2011 auction of Nortel’s patent portfolio (Apple contributed a huge chunk of the eventual $4.5 billion bid from the Rockstar consortium), the Cupertino-headquartered business has generally flown under the radar in IP value creation terms. Occasionally, it has dipped its toe into the secondary market to bolster its portfolio and, as one of the largest licensees, it has closed numerous deals with the most prominent SEP owners in the mobile sector.

Although adding thousands of former Intel assets to its portfolio may not change that muted approach (at least not overnight), it hands Myers and his team the opportunity to play a starring role in determining the future of a vital part of the value creation market.

Richard Lloyd

Editor

IAM magazine

[email protected]

Jacob Schindler

Asia-Pacific editor

[email protected]