27 Sep
2018

The shapers of the global IP market

The fifth IAM Market Makers reveals which executives we believe to be setting the parameters of the patent business world. Many of the 40 names have featured on the list for a number of years; some are new; and – for the first time – a couple of big names do not appear at all

The majority of executives named in this year’s IAM Market Makers list hail from operating companies. There is also significant geographic diversity between North American, European and Asian organisations. These trends first emerged in a big way several years ago as NPEs absorbed the effects of patent reforms in the United States and more companies looked to Asia for value creation opportunities. Neither movement, though, is necessarily accelerating. Looking at the firms represented this year and last year, it looks much more as if a relative equilibrium has emerged.

However, observing how those firms are ranked does tell you what is driving some of the most important deals and initiatives in the IP market right now. Clustered among the top 10 of this list are the executives in organisations that are the biggest patent owners in 5G wireless technology. It is a crucial time for that segment of the patent business as stakeholders prepare for networks to begin rolling out in 2019. Decision makers at Huawei, Nokia, Qualcomm, Ericsson, Samsung and InterDigital are all at the forefront in these early days of 5G licensing strategy.

Many new entrants to the list are interviewed in depth in the pages that follow. Some – like Keaton Parekh of Quarterhill – have recently taken on top jobs in companies that have long been powerful IP market players. Others – like Feng Ying of Oppo – represent companies that have burst onto the patent deals scene over the last couple of years. All of them, though, shed light on how their organisations are changing and their IP strategies are shifting.

Now, for our usual disclaimer: the IAM editorial team assembled this list over a number of months beginning in May 2018. We have based it on extensive conversations with leading industry voices, including some of the people on this list and many more besides. We have factored in publicly announced deals and news, though we do not have a fully transparent view of the patent marketplace. While it is based on extensive research, at the end of the day the ranking represents the subjective opinions of the IAM team – nothing more, nothing less.

Whether you agree or disagree with the selections, perusing this list should give you a digest of many of the most significant IP deals of the past 12 months, and flag up some of the stories to watch for in the next year.

40 Didier Patry, France Brevets

Two years into Didier Patry’s tenure as CEO of France Brevets, it is clear that some significant changes are underway at the original sovereign patent fund. First, in terms of deal making, France Brevets has broadened its horizons. It sold a portfolio to Chinese ride-hailing start-up Didi in February – executives confirmed that France Brevets would have been hesitant to make such a move in the past, preferring to license the rights to multiple firms. Second, the fund has ramped up its support work with small and medium-sized enterprises (SMEs) through its ‘patent factory’ programme, which allows it to function as the de facto chief IP counsel to start-ups. It took the initiative Europe-wide with the help of IP Europe and Qualcomm in June. Finally, while France Brevets is still mostly government funded, there are indications that Patry and his team could be looking to bring in outside investors.


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Keaton Parekh
Quarterhill

Keaton Parekh – A good deal, not just any deal

When Keaton Parekh was confirmed as the new CEO of Quaterhill business WiLAN, there was little doubt that he had the kind of experience that made him an excellent fit for one of the most prominent jobs in the NPE sector.

After an initial stint as a lawyer in private practice, he picked up a succession of roles with prominent patent-owning businesses including Tessera, Rovi, SanDisk and, finally, Phillips, where he served as chief IP officer of Lumileds, the lighting business that in 2017 was spun off from the Dutch company with the majority acquired by private equity fund Apollo Global Management.

Parekh was familiar with WiLAN, having carried out a number of deals with the business while at SanDisk, but he still did his homework before taking the job. “I undertook quite a bit of due diligence to determine the value of the company,” he reveals. “A few things stand out in terms of the intellectual property – the patents WiLAN owns are very relevant to where key technologies currently are and where things are headed. It was clear to me that WiLAN had a very strict process to purchase patent portfolios that are on the market. Plus the quality of the team really stood out – very seasoned patent and licensing professionals.”

His new role at WiLAN, where he is taking over from licensing veteran Jim Skippen, gives Parekh oversight of a huge portfolio of assets that has been boosted in recent years through deals with Panasonic, Freescale and the acquisition of a portfolio formerly owned by Qimonda.

While the Canadian headquartered NPE has aggressively grown its stockpile of assets, like many publicly traded NPEs it has found the licensing market particularly tough in recent years. Parekh concedes that things have become harder since he started out in the business at Tessera, but insists that WiLAN is still in a strong position.

“One of the things I did closely look at is how strong the company is to weather the changes in the market as the pendulum continues to swing,” he confides. “Does it just own patents that it is trying to monetise or does it own strong, relevant patents with good chances of withstanding changes in the legal climate? I was excited to find it’s the latter.”

Parekh got an early indication of just how strong WiLAN’s portfolio is when the NPE was awarded $145 million in an infringement lawsuit against Apple. The payout came shortly after he joined the business, but with the dispute now headed to mediation, he is unable to talk about the case.

However, the court decision supports the lessons that Parekh has taken from his previous licensing roles. “You need to have strong, relevant patents; and you need to be able to ride it out,” he reflects. “It’s too easy, particularly for some publicly traded companies, to accept unfavourable terms at quarter-end to meet revenue goals. Fortunately, WiLAN fully understands the value of, and supports, not succumbing to quarter-end pressures by entering into such licences. To me patents are effectively a licensing company’s products and, as with any business, to be successful, its needs to be able to stand behind its products with confidence in order to close a good deal not just any deal.”

Arguably WiLAN’s most notable recent licensing deal was its agreement with TSMC, which gave the Taiwanese semiconductor outfit rights not only to patents in the NPE’s existing patent portfolio, but also to certain assets that it might acquire in the future. “That was some outside-the-box thinking and my expectation is that it will really help with the lumpiness in revenue generation that can come from being a licensing business,” Parekh comments.

While any NPE can savour a court victory over Apple, it is further deals such as the TSMC one, agreed without litigation, that will confirm that Parekh was the right person for what remains one of the top jobs in patent monetisation.

39 Keaton Parekh, Quarterhill

In 2018 Keaton Parekh took over the reins at WiLAN, the Quarterhill subsidiary, which remains one of the largest NPEs in the market with a patent portfolio stretching into the thousands. A former chief IP officer with the lighting business Lumileds, Parekh has a long career in the licensing sector with stints at SanDisk, Tessera and Rovi featuring on his resumé. As CEO of WiLAN he certainly has big shoes to fill. The previous head of the business, Jim Skippen, was in the role for 12 years and was instrumental in turning the NPE into one of the largest players in the market and signing more than 500 licensing agreements. While the business has undoubtedly suffered along with other licensors, part of its success has been its ability to evolve and forge partnerships with major operating companies. That trait was apparent in early 2018 when WiLAN announced a new deal with TSMC, which gave the Taiwanese business certain rights to existing semiconductor patents in the Canadian NPE’s portfolio and rights to certain grants in future portfolios that WiLAN acquires. Parekh will be expected to deliver similar innovative deals as he takes charge.


38 Dan McCurdy, Provenance

As CEO and board member of Provenance Asset Group, Dan McCurdy is once again offering top tech companies an innovative way to reduce their IP risk. The new firm emerged as a project of Quatela Lynch McCurdy, which worked with Nokia on how it could create a business model around patents as a service. The transfer establishing Provenance was one of the biggest deals of recent years, involving around 12,000 Nokia patents in 4,500 families. McCurdy is now leading Provenance’s effort to sell licences to individual patent families (dubbed ‘slices’), which can be used defensively against one named opponent, at a rate of $100,000 per year per slice. The venture raised an initial $40 million of outside investment. With a chief executive who has been at the forefront of defensive IP value creation for a decade, it has every opportunity to succeed.


37 Michael Friedman, Hilco IP Merchant Bank

Hilco IP Merchant Bank, headed by Michael Friedman, remains one of the few players that combines Wall Street savvy with genuine IP expertise. Demonstrating that Friedman and his team are one of the first ports of call for patent monetisers looking to access capital in the space, Hilco arranged the $40 million financing for Provenance Asset Group as it took on the task of monetising a vast portfolio of more than 12,000 individual patents formerly owned by Nokia. But arguably what sets Hilco apart is its combination of both an advisory business with its intention to be an increasingly active player in the patent acquisition space. It is there that Friedman, in particular, should have plenty of opportunity to demonstrate his investment skills and to remain a prominent player in the market.


36 Dongsuk Bae, Intellectual Discovery

South Korea’s patent fund was quiet for a while following the controversial departure of previous CEO Kwang-Jun Kim. Nevertheless, Intellectual Discovery has made clear over the last year that it is still very much in the game. After spending most of 2017 shedding assets, the fund returned to the buy side in December, when it made a significant acquisition (not its first) of auto-related assets. There is also an indication that like many patent-focused businesses, ID is turning its attention toward China. It has been retained by LG Chem to find an exclusive licensee for a key battery technology. Jung Dong-Soo, a former IP executive with SK Hynix, took over as president and CEO in early 2017. Former LG Electronics executive Dongsuk Bae heads up the IP business division and is the side’s key deal maker.


35 Kurt Brasch, Uber

Uber made abundantly clear its commitment to becoming a leader in the corporate IP market when it hired Kurt Brasch as its head of patent transactions in late 2016. The former Google and Motorola man was quick off the blocks, striking several notable early deals with rights owners such as AT&T and Apparate International. Followed by further asset purchases from Microsoft and AT&T in late 2017/early 2018, these transactions helped to build up the ride-sharing business’s previously slender patent portfolio. It now contains 272 granted US rights and 367 patents worldwide. This growth has been helped along by Brasch’s launch of UP3, a platform giving patent owners an efficient way to sell assets to Uber. Although he recently told IAM that Uber’s patent acquisition drive is now slowing down, Brasch will no doubt continue to seek out those assets essential to the company’s position as a leading innovator in its field.


3Phil Hartstein, Finjan

Cybersecurity company Finjan has gone from strength to strength under the stewardship of CEO Phil Hartstein. Having enjoyed dramatic revenue increases in 2016 and 2017, it recently announced $82.3 million earnings for the first half of 2018, a 200% jump year-on-year; net income also rose sharply by 177% to $36.3 million. Finjan’s lucrative patent settlement with Symantec in March 2018 contributed to that rise – worth $65 million, it was one of the largest pay-outs received by an NPE in recent times. These successes were achieved with a relatively small patent portfolio, showing the importance of quality over quantity in the current market. With several litigations pending and Hartstein revealing negotiations with a slew of potential licensees, Finjan looks set to continue increasing its earnings.


3BJ Watrous, Apple

Over the past year Apple has shown how powerful it can be when it decides to throw its weight around as one of the most important licensees in the mobile phone market. In its knock-down drag-out fight with Qualcomm, Apple is making use of US, UK and Chinese courts. It has also worked together with its contract manufacturers in Taiwan to withhold royalties from the chipmaker throughout the conflict. Combined with the decision by Huawei to withhold royalties for a period, this has left a massive hole in Qualcomm’s licensing revenues in recent quarters, while mounting legal costs have hit its profitability. As today’s most important patent war rumbles on, Apple put an iconic battle of yesteryear to rest – it settled a seven-year-long design patent dispute with Samsung in June. With the deal coming just a month after Apple was handed a major $533 million victory by a California jury, it is likely that as the company’s chief IP counsel, Watrous is pleased with how the dispute was wound up.


3Shigeharu Yoshii, IP Bridge

“Five years ago when IP Bridge was founded, people did not know if we could survive one year, but we are still here.” So said CEO Shigeharu Yoshii in July, as he kicked off a five-year anniversary celebration in Tokyo for the Japanese patent fund, surrounded by IP luminaries from the public and private sectors who had helped make it possible. It is no small feat, considering how many businesses dedicated to patent monetisation have failed to survive the last half decade. But developments from the last year show that IP Bridge is not resting on its laurels – it collaborated for the first time in 2018 with NTT Docomo, the country’s largest telecoms provider. With the overall pace of acquisitions slowing down, now is the time for IP Bridge to prove it can create value with what it has. The fund says it has generated significant licensing revenue over the past year, while it has active litigation in the United States, Germany and Japan.


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Kenichi Nagasawa
Canon

Kenichi Nagasawa – A line in the sand

Kenichi Nagasawa is managing executive officer at Canon, where he has led the IP and legal headquarters since 2010. Never one to mince words, he shares his views here on SEPs, NPEs and patent pools.

SEP licensing is a major policy topic in Japan at the moment. What’s your view?

Patents have to be placed in two categories. One is patents concerning social infrastructure and general technologies that are used in common: industry standards, user interfaces, general software modules and so forth. Such patents may be called “corporate area patents”. The other category is patents for which the patent system was originally established – we may call these “competitive area patents”.

It contributes to industrial progress for businesses to commonly utilise technologies relating to social infrastructure. But it also contributes to industrial progress when they competitively develop innovative technologies. Accordingly, common area patents should be licensed to others under reasonable terms and conditions, but should not be used to obtain injunctive remedies. Competitive area patents, on the other hand, should be strongly enforceable.

Therefore, injunctions based on SEPs should not be allowed and SEPs should be licensed non-discriminately. I believe that SEPs should not be licensed differently in different countries and regions. When a court gives a different rate that applies in China from a rate in other countries, I disagree with that approach. SEP guidelines should make licensee fees predictable and consistent. Establishing an alternative dispute resolution system is not so easy, but we should keep making efforts seeking such a way of resolving disputes. To that end, I will keep an eye on cases handled by the Tokyo arbitration hub to be operated from this September.

What do you think about some of the recent initiatives to establish patent pools geared towards the fourth industrial revolution?

Avanci’s licence to BMW seems expensive, considering the licence covers 4G wireless SEPs only. There are still many other licensors and many other technologies which car manufacturers need to deal with. There are too many patent pools out there now.

What are your thoughts on the US enforcement environment as a patent owner?

Enforcement in the United States has become challenging indeed. I believe Canon patents are strong enough to survive inter partes reviews and other challenges. We are open for negotiation prior to assertion – as long as the infringers are willing to negotiate, we are willing to negotiate. However, if they do not accept negotiation but try to infringe our patents in order to copy our products, we think such patent infringement is wilful. In such cases, I do not think negotiation will be successful. Recently, I feel there has been more wilful infringement of our patents. We need R&D investment to be paid back. The International Trade Commission is effective and powerful, and we often use that.

Do you still see NPEs as a significant threat?

They are mainly from the United States; we have not got serious NPE problems in Japan. Japanese companies are troubled by foreign NPEs, which like to use courts in Germany and the United States. Since the America Invents Act came into effect, NPEs have slowed their activities. But now the pendulum in the United States seems to be swinging back as I follow the decisions, articles and reforms there. Accordingly, I think NPE activities are very likely to increase again. Additionally, there are many patents available in the open market. Some big NPEs with funds can buy patents at a low price, but it’s difficult for small NPEs. China might be a potential venue for NPE litigation.

31 Kenichi Nagasawa, Canon

One of Japan’s most esteemed IP executives, Kenichi Nagasawa has been the head of Canon’s IP and legal headquarters since April 2010. He also serves as a board member and managing executive officer. Under Nagasawa’s stewardship, Canon retains the world’s third largest portfolio after Samsung and IBM. Though a vocal critic of much monetisation-focused patent strategy, Canon has taken an uncompromising position in enforcing its patents against infringers in the United States – this year saw it file suits against 31 separate defendants in a single day. A proponent of greater corporate cross-licensing and a fierce critic of NPEs, Nagasawa is a major voice in IP policy debates in Japan – his strong views on SEPs have been reflected in some recent policy initiatives in that area.


30 Russell Binns, Allied Security Trust

CEO and general counsel of defensive patent aggregator Allied Security Trust (AST), Russell Binns has played a key role in acquiring IP protection on behalf of world-leading technology companies such as IBM, Microsoft, Phillips, Intel and Google. After taking the reins in 2014, the 20-year IP veteran took over the ground-breaking Industry Patent Purchase Programme (IP3) from AST member Google in 2016. Making it quick and easy for patent owners to sell their assets, IP3 facilitated offers to purchase 107 active patent filings in 2016 and the sale of 70 active assets in 2017. This year’s IP3 was opened up to non-AST members in an attempt to broaden participation and to increase the number of patents sold. This reflects Binns’s continuing efforts to foster greater cooperation among tech innovators.


29 Joe Siino, Via Licensing

Joe Siino continues to ensure that Via Licensing’s patent pool strategy reflects emerging trends in the wireless technology sector. This year, the Dolby Laboratories subsidiary built upon the successes it enjoyed in 2017 when it acquired a slew of new 4G licensees, including Verizon, Lenovo and Conversant, and announced the launch of a multi-generational patent pool comprising both its 3G and 4G assets. The move will ensure that Via’s assets appeal to the ever-broader range of potential licensees for wireless technology, whose importance continues to grow outside the mobile phones sector. Via is now better-positioned to exploit new opportunities in areas where commercialisation has previously been comparatively limited, such as the automotive industry; with the experienced former Yahoo! and Ovidian strategist as its president, Via looks poised to become a leading force in the market for emerging 5G technologies too.


Mattia Fogliacco
Sisvel

Mattia Fogliacco – Roll with the changes

Sisvel is one of the oldest active intermediaries in the IP market, with roots stretching back to a 1982 alliance of Italian television manufacturers. When Mattia Fogliacco was appointed CEO in January 2017, he took over a patent pool operator that perhaps had not changed as quickly as the overall IP market had in recent years. What he describes as “light adaptations” were needed to help the Luxembourg-based company – which has offices in Europe, the United States and Asia – to survive a very difficult licensing landscape.

One of these has been an update in how Sisvel structures its patent pools and other joint licensing programmes. Starting with its WiFi joint licensing programme, Sisvel is moving toward acquiring not just pool licensing rights, but also bilateral licensing rights from patent owners. “This allows us to prevent the usual delaying tactic where licensees will decline a pool licence and say they prefer to deal with each patent owner separately,” Fogliacco explains. Not only does this enable Sisvel to begin negotiations with implementers immediately, but it also ensures that any bilateral deals that may be carried out meet the same standards to which all pool members have agreed.

Getting the internal buy-in to do this was an accomplishment for Sisvel’s leadership. “It was not an easy sell to members,” Fogliacco acknowledges. “But it was important and they understood it because the landscape is changing.” In other technology areas, Sisvel has moved to streamline its offerings. Earlier this year, it launched a new mobile communications programme, which brings together the rights to all of its SEPs covering standards including 3G UMTS and 4G LTE into a single agreement. With this move, the pool operator is hoping to cut down transaction costs for both sides of the licensing relationship. Fogliacco states: “Having an ear for the needs of the licensees and understanding their needs is very important.”

The overhaul to the WiFi programme was vindicated in a major way in June, when Sisvel announced two parallel deals with Samsung Electronics. The Korean company agreed to a royalty-bearing licence to the portfolio of WiFi patents; at the same time, it assigned a number of its own WiFi-related assets to a special purpose vehicle set up by Sisvel, which will take part in the WiFi programme going forward. Along with an earlier deal with LG Electronics, it marked a major milestone for the programme, which now has over 100 licensees.

Fogliacco credits Sisvel’s strong internal technical team with helping to persuade normally resistant licensees to cut a deal without the need for litigation. The company’s subsidiary Sisvel Technology has 15 engineers and patent attorneys, as well as Asia-based subject matter experts in offices including its Hong Kong outpost. “This is the single key differentiation factor” between Sisvel and other licensing administrators, Fogliacco maintains. “The fact that we can run the technical discussion alone without the patent owners and external counsel has been helping tremendously.”

Sisvel is not done investing in its own capabilities and Asia is a particular focus for future growth. The pool operator is betting that a stronger push to hire more local resources in places where the key implementers are based will enable it to do its job even better.

The pool space is changing rapidly, with the approach of 5G wireless standards encouraging new models and players. Fogliacco is convinced that his organisation is in a strong position relative to possible competitors. He says that reputation and market knowledge are critical and that the barriers to entry are actually higher than one might think. Nevertheless, it is a safe bet that Sisvel will continue to evolve under his leadership.

28 Mattia Fogliacco, Sisvel

Sisvel exemplifies a licensing-based company that is changing its model to adapt to market conditions, which continue to challenge patent owners. Since taking over as CEO in early 2017, Mattia Fogliacco has sought to streamline the Luxembourg-based firm’s licence offerings, debuting a new mobile communications programme that combines patents relevant to multiple standards. In its WiFi pool, Sisvel has changed its model so that it has not just pool licensing rights but also bilateral licensing rights on behalf of all of its patent owners. In doing so it hopes to overcome some of the common delay tactics prevalent in the market. The new approach was validated last summer, when Sisvel announced royalty-bearing licence and patent acquisition deals with both LG and Samsung Electronics.


27 Mathen Ganesan, Intellectual Ventures

With the impending departure from Intellectual Ventures (IV) of licensing specialist Cory Van Arsdale, Mathen Ganesan, executive vice president of the firm’s Invention Investment Funds, has become the key figure pulling the monetisation strings there. Ganesan now oversees the ongoing efforts to sell off chunks of IV’s huge portfolio as well as the company’s pursuit of new licensing deals. Even in a deals climate that continues to pose considerable challenges for patent owners such as the iconic NPE, his role gives him huge power within the IP value creation market. Before moving to IV’s US headquarters in 2017, Ganesan was managing director of Invention Investment Ireland, IV’s third invention investment fund, based in Dublin. Prior to joining the firm he was director of sales at TechInsights and before that was a co-founder and vice president of Storage Genetics, a company that was ultimately sold to Micron Technology in 2010.


Mike Lee
Google

Mike Lee – The new guy

Mike Lee took the top patent job at Google in October 2017 after his predecessor Allen Lo moved to Facebook. A former Cisco IP executive, Lee is now in charge of one of the more innovative patent groups in Silicon Valley, whose reach and influence extend through much of the market.

What have been your main areas of focus/priorities since you took over as head of patents?

One of our main areas of focus has been shaping our valuable and strong portfolio, based on Google’s leading technology and huge investments in R&D, with the idea that every asset must have a purpose. There are many aspects to that work, including determining the ideal shape of our portfolio, expanding the portfolio in key areas, right-sizing the portfolio through divestitures in others and expanding our targeted prosecution efforts.

We are also focused on the quality of the patents we obtain. We’re working to create a machine-learning patent similarity tool to help us find prior art and secure stronger claims that can survive future challenges. Our team has also built a tool for assessing claim breadth and made it public (https://cloud.google.com/blog/products/ai-machine-learning/measuring-patent-claim-breadth-using-google-patents-public-datasets).

Another focus has been our study of how to design an evaluation model for portfolios, including SEPs, that more accurately reflects a manufacturer’s concern with the total potential royalty stack a product must bear while at the same time fairly compensating patent owners.

In recent years Google has launched several innovative, patent-focused initiatives such as PAX and the patent purchase promotion (which morphed into AST’s IP3). How do you ensure that the patent group continues to innovate in support of the company’s wider goals?

You’ve seen this level of innovation because Google’s culture – taking risks and trying new things to build amazing products for our users – flows through the whole company, including the patent team. That won’t change. Our team is always looking for innovative ways to manage a complex, evolving patent landscape so that Google and its partners can bring cutting-edge technology to users while respecting the IP rights of others. You can expect to see us try new things while we continue to support successful ongoing initiatives like the License on Transfer network. One recent example is the Technical Disclosure Commons (www.tdcommons.org/) that we helped launch to give companies a free platform for publishing defensive publications.

Patent litigation in the United States has fallen in recent years and the NPE threat to many businesses now appears diminished, but how would you sum up the current litigation climate in the United States?

It’s true that the rate of NPE patent litigation in the United States has dropped from the astronomical highs of a couple of years ago. But it’s important to keep in mind that the NPE litigation rate is still significantly higher than the historically steady rates last seen in the early 2000s. Many of the patents we face in litigation still have significant validity problems, so the issue of wasteful litigation in the United States has not been solved by a long stretch.

In fact, this year, we are seeing an uptick in patent litigation and assertions in the United States. Inter partes reviews and the Alice decision are key factors that made the assertion of weak patents a less attractive business model and lowered the litigation rate. Changes in how inter partes reviews work and how Section 101 is applied are driving that uptick. There has been a lot of misleading rhetoric attacking inter partes reviews and Alice, and if they are weakened further, we could see a more significant increase in wasteful litigation of the type that hurts, not helps, innovation.

Since the passage of the America Invents Act, Google has been one of the most vocal companies in calling for further reform. Are there parts of the patent system in the United States that you feel still need to be changed through legislation?

Google works with many other tech companies and with industry groups to advocate for a patent system based on high-quality patents that best promotes innovation. There is widespread agreement in the high-tech industry that the proliferation of vague and trivial patents coupled with lengthy, expensive litigation procedures and uncertain damages law undermines the goal of the patent system. So any developments that support the issuance of clear, valid patents from the USPTO are welcome. We strongly believe in patent quality and are uniquely situated to back it up with significant engineering resources to build our Google Patents search tool, Google Patents Public Datasets (https://cloud.google.com/blog/products/gcp/google-patents-public-datasets-connecting-public-paid-and-private-patent-data) and our most recent claims breadth model – all of which are freely available. Be on the lookout for more.

In addition, there are areas that need to be addressed, whether through legislation, court or USPTO action. For instance, the Section 112 doctrines are not adequately enforced in the software area. Recent changes to wilfulness law have created significant uncertainty for companies making tech products and have undermined the disclosure function of patents. In addition, the Supreme Court’s decision eliminating laches encourages harmful ‘lie-in-wait’ behaviour.

What do you think are some of the big trends that are going to affect IP groups at major patent-owning businesses in the next five to 10 years?

It’s hard to predict the future, but I hope we will see trends that support innovation in the tech industry, like an increased emphasis on the quality, rather than the quantity, of patent assets in a portfolio. That is something the Google patent team is working on as a better way to protect our company’s investments in R&D. It’s also a necessary foundation for a strong patent system.

Another important step forward would be the development of better portfolio evaluation models for licensing that incorporate real-world business concerns about the total potential royalty stack for the product. That issue will only become more important as the Internet of Things becomes more prevalent.

26 Mike Lee, Google

Mike Lee took over as head of patents at Google after his predecessor Allen Lo jumped ship to Facebook in August last year. Lee originally joined the search giant in January 2017 as the lead counsel for mobile, having previously been a senior director of intellectual property at Cisco where he focused on a range of issues including patent licensing, patent purchases, IP policy and patent pools. His elevation to the top job at Google handed him one of the biggest corporate roles in the patent market with responsibility for portfolio strategy and development, patent quality and data science, patent licensing and transactions, and patent policy. It also gave him control of a group which, under Lo, was one of the most innovative teams in the patent market with initiatives such as the patent purchase promotion (which has become IP3 under defensive operator AST) and PAX, a cross-licence agreement for the Android community.


Feng Ying
Oppo

Feng Ying – New kid on the block

As head of intellectual property at Chinese smartphone maker Oppo, Feng Ying has been one of the most active patent buyers of the past couple of years. His task is clear: ensure that his company’s products make it to market amid tough competition and tight margins.

What do you see as your IP department’s key accomplishments or achievements over the last year?

In the past several years, Oppo has devoted much time and resources to acquiring patent portfolios from third parties to build up our reserves, including in LTE and video decoding and encoding technology. To date, we have acquired more 1,000 LTE assets and almost 500 video-related patent assets.

Oppo also continues to strengthen our in-house R&D and patent filings. We file over 5,000 patent applications every year and we have accumulated in total more than 30,000 patent grants and applications.

At the same time, we are continuing to increase our contribution to 5G telecommunications standards. In the past several years, we have filed over 2,000 patent families related to 5G technologies.

What is your assessment of the global litigation environment and how do you minimise risk?

I think the global litigation environment has been improved and I see a strong awareness and initiatives towards boosting IP protection around the world. Against this backdrop, Chinese companies are expanding into foreign markets and we are faced with mounting litigation risk. This is a natural and inevitable trend.

There are some key measures we have taken to minimise risk. We have established an IP risk prevention system and continue to modify and improve it. Overseas IP risk prevention is a systematic task, which requires a complex and complete overall strategy. It requires companies to coordinate IP protection strategies in patent, trademark, domain and trade secrets to maximise all aspects of IP protection.

We are speeding our build-up of overseas IP rights. Oppo has been increasing global patent holdings in key technologies like 5G, imaging and power charging in order to enhance our capabilities in defence, offence and counter-suit.

Oppo is already taking a more active and proactive role in 3GPP international technology standards and other standards setting. We are keen to participate and contribute patents to international standards, which not only improves our position but also restrains other SEP owners and competitors.

We continuously improve our in-house R&D and innovation, and use them for our products and services. This greatly reduces the chance of infringing local IP rights of targeted markets.

We use external patent acquisition to beef up our IP power effectively to safeguard freedom to operate.

Oppo is open to talking with existing and prospective licensors to solve potential IP disputes. In the meantime, we are open for cross-licence discussions to reduce the chance of infringement. In addition, we have also joined foreign collective patent alliances like defensive aggregators and pools to mitigate risk.

We work with top IP consulting and service providers to design our overseas IP strategy. We also work with industry organisations as well as relevant government bodies to address overseas IP risk.

What role do you believe NPEs should play in the patent market?

It’s necessary to put NPEs into two categories: one is those NPEs that have strong intellectual property; and the other is those based on blackmailing and extortion. The former may even perform R&D. It’s necessary to respect their invention and intellectual property via reasonable licensing negotiations. As for the latter, we are determined to combat their assertion and blackmailing fiercely. But without a doubt, NPEs will continue to play a big part in patent markets in the future.

25 Feng Ying, Oppo

Feng Ying is the head of IP rights at Oppo and is responsible for IP protection, transactions, licensing negotiations and litigations. Under his leadership, the Dongguan-based smartphone manufacturer is making waves as one of the most active patent buyers in the market. It has been involved in a steady stream of small-scale deals with corporate sellers including Sharp, Intel and SK Telecom, as well as NPEs such as Inventergy, IV, ID and Hilco Global. It also acquired over 240 assets from Dolby after the two settled an infringement dispute in India. While the company is enjoying mobile phone sales success, Feng and his team are keen to boost their portfolio through external acquisitions and patent filing efforts at home and overseas. It remains to be seen how the company will make use of its growing arsenal. 


24 Marty Roberts, RPX

These are tumultuous times for RPX and its CEO Marty Roberts. Catapulted into the top job in early 2017 after the abrupt exit of co-founder John Amster, Roberts was tasked with steadying the ship as the company faced growing pressure to be taken private. Early this year the board of directors initiated a formal sales process, which ultimately saw the defensive patent player acquired by mid-market private equity firm HGGC Capital. With a lower volume of patent infringement lawsuits being filed in the United States and a diminished litigation threat for many businesses from NPEs, business conditions for RPX remain uncertain. Against that backdrop, the fact that Roberts and his management team can now manage the business away from the glare of the public markets should be a considerable advantage for what remains an iconic IP business brand.


23 Bill Coughlin, Ford

As CEO of Ford Global Technologies and assistant general counsel to the Ford Motor Corporation, Bill Coughlin is one of the Motor City’s most respected in-house IP executives. Last year he picked up another title, when he was named the automaker’s global innovation counsel. Under Coughlin’s leadership, Ford is aggressively expanding its patent portfolio, notching an 18% year on year increase in the latest initial public offering rankings of US patent grants (only one firm in the top 20 saw a bigger percentage increase – fellow automaker Toyota). Coughlin has been instrumental in placing Ford at the cutting edge of defensive IP strategy. One way he has achieved this is through alliances, including one with AST, through which Ford purchased patents this year in the latest IP3 initiative. The company has also been a top user of the inter partes review system. With automakers set to come under even more pressure as their top-selling vehicles become connected in more ways, that kind of groundwork may well pay off.


Jako Eleveld
Philips

Jako Eleveld – More than business as usual

On the face of it, the recent changes at the top of Philips IP and Standards (IP&S) would appear to suggest that a shift is underway at one of Europe’s most iconic IP-owning companies. Following the departure of Brian Hinman in late 2017, a successor to the chief IP officer role was not named. Instead, Clement Revetti, a long-time legal executive within the Dutch firm’s healthcare business, was appointed as head of IP&S, with a direct report in to chief legal officer Marnix van Ginneken.

However, it is a consummate insider and long-time licensing specialist who has emerged as the company’s top IP deal maker. Head of licensing Jako Eleveld has served on the executive management team of IP&S since 2009. His 20-year career in intellectual property has been spent across various Philips divisions, including Philips Semiconductors and the company’s consumer lifestyle business.

The appointment of a non-IP specialist to head IP&S marks a break with past precedent, Eleveld acknowledges, but it does not change the way that the company approaches IP management, the benchmarks that it measures itself by or the expectation that it will be a financially self-sustaining part of the company. It all depends on whether intellectual property is still managed like a business unit; Eleveld says that it is: “We still do and will continue to provide a significant contribution to Philips’ growth and profitability – that has not changed.” The knowledge and expertise around IP value creation within IP&S is still in place, while a new boss from within the top ranks of Philips maintains its close relationship with the firm’s senior management.

Having been exposed to licensing for over 15 years, Eleveld can testify both to how difficult the overall market has been in recent years and to how Philips’ approach is changing. “Nowadays we need significantly more litigation,” he laments. In some cases, that means resolving a dispute will take a long time. The company recently prevailed in a case in India over the infringement of a DVD patent, the country’s first post-trial SEP judgment. While DVD licensing programmes are nearing the end of their life, the team at Philips IP&S has done a good job of constantly generating new opportunities, Eleveld says: “We have a rich history in markets like electronics and information communications and technology, and the patents run for some time, with increasing relevance to other fields, so we’re not done with that yet.”

Philips also remains a standout for the amount of R&D work done within the IP&S group. Eleveld points to technologies such as wireless charging and nano-imprinting which were not initially commercialised by the company but were brought to market after being further developed by IP&S. “This is not just a licensing play, we are really developing the technology itself. Over the last five years, technology licensing has become more important to us,” he states.

In addition to making broader technology deals, Philips has coped with a poor licensing market by broadening its monetisation options. That was on display when the company sold over 300 OLED display patents to Xiaomi in the run-up to Chinese smartphone maker’s Hong Kong initial public offering. While outright sale is not the first-choice model, Eleveld says that it makes the most sense in cases where other companies have more expertise in a technology area or where the transacted rights complement the buyer’s own portfolio in a certain field.

As the overall business transitions to a greater focus on sectors like healthcare, the programmes run by IP&S will gradually begin to look different too. “We have already noticed that the technologies at the beginning of our pipeline are changing,” Eleveld observes. Revetti brings plenty of healthcare experience, which combined with the IP nous of executives like Eleveld should make IP&S a key player in the company’s next chapter.

22 Jako Eleveld, Philips

After a 20-year career in intellectual property with the Dutch company, Jako Eleveld has risen to become the key patent deal maker within Philips’ storied intellectual property and standards (IP&S) group. Eleveld has been in the licensing game for 15 years and a member of the IP&S executive team for nearly a decade. Prior to his current position (head of licensing), he managed the IP business of the company’s consumer lifestyle division. IP&S appears to be going through something of a shift. The vacant chief IP officer position was not filled after Brian Hinman’s departure – instead longtime Philips corporate counsel Clement Revetti took over with a report in to the company’s chief legal officer. Nevertheless, the large IP team’s approach to value creation – and the expectation that it contributes to the bottom line – has not changed. 


21 Mark Terrano, Broadcom

While Broadcom’s ambitious takeover bid for Qualcomm was ultimately blocked by the US government, the company remains a giant in the semiconductor industry and an increasingly assertive player in IP terms. As vice president and general manager, intellectual property and licensing, Mark Terrano is responsible for the company’s IP licensing programmes and its offensive and defensive IP litigation. He joined Broadcom after it acquired his previous employer LSI, one of a series of purchases that has transformed the company and enabled it to build a patent portfolio of more than 20,000 US assets. The semiconductor business’s increasingly assertive stance was displayed in May 2018 when it filed an infringement suit in US district court and a complaint at the International Trade Commission against Toyota and four of the Japanese company’s suppliers. In a semiconductor sector that has become increasingly litigious and seen large portfolios of assets changing hands, Terrano looks set to remain a major presence in the space.


20 Toshimoto Mitomo, Sony

Almost unique, even among the rarefied ranks of this list, Sony’s Toshimoto Mitomo has a role that spans both intellectual property and business strategy. With the title of corporate executive, Mitomo is not only closely involved with major IP decisions, but also has a hand in high-level corporate planning. On top of this, he manages a $100 million corporate venture fund, which invests in promising start-ups. Sony’s IP team benchmarks its success on several defensively oriented measures. The company made zero payments on 23 of 29 litigation settlements in fiscal year 2016/17. It also prides itself on an inter partes review institution rate that is well above average. On the other side of the coin, Sony is a key member of next-generation licensing initiative Avanci. Recent assignments between the two foreshadow a new, yet-to-be-announced initiative. Working full-time on IP issues is senior general manager Tomonori Okuwaki.


19 David Pridham, Dominion Harbor Group

Established by CEO David Pridham in 2013, Dominion Harbor quickly established itself as one of the key players in the IP value creation space. The patent transaction and advisory company had a particularly eventful 2017, buying 4,000 former Kodak patents, and establishing a $50 million patent buying fund with Hawkeye Ventures. It also forged a notable partnership with Beijing East IP Law Firm to help commercialise its assets in China. Pridham’s team continues to build momentum, with Allied Security Trust data showing that Dominion Harbor purchased the largest number of assets of any organisation in the first quarter of 2018. With 501 patents purchased in three separate deals, it was rivalled only by Uniloc, which bought 447 assets; no other organisation acquired more than 158 patents in the first three months of the year.


18 Yoshiaki Tokuda, Panasonic

Yoshiaki Tokuda took the helm of Panasonic’s IP Centre in March 2017. A year-and-a-half into his tenure, it is clear that the company is still open for patent business. And why should it not be? This is a portfolio that Tokuda – who has worked in Panasonic for 28 years, 17 of them negotiating IP deals – knows better than anyone. Transactions with NPEs became the norm under the tenure of Tokuda’s predecessor, Hideo Toyoda. Those are exactly the kinds of deals that Tokuda has pursued over the last 12 months. In February, Panasonic spun a portfolio of chip patents to Xperi. It also executed patent assignments to longtime collaborator WiLAN – one covering semiconductor memory and the other related to video surveillance. In addition, Panasonic is one of the companies that has seeded iPEL, a new NPE focusing on the China market. The deals may grab headlines, but there is also plenty of work to be done in managing Panasonic’s expansive IP holdings – the Osaka-based company carries out almost all such work in-house.


17 Paul Lin, Xiaomi

Xiaomi’s debut on the Hong Kong Stock Exchange in June threw light on many previously unrevealed details of the path charted by the company’s vice president for IP strategy, Paul Lin. The former IV executive came in-house in 2016 after working closely with Xiaomi through his patent fund, Zhigu. His remit is deal making and strategic initiatives – separate prosecution and litigation teams also report into senior executive Wang Xiang. Xiaomi continued to bulk up its portfolio in the run-up to its public float, buying patents from Philips and Denso. Its licensing burden after deals with the likes of Qualcomm, Microsoft, Nokia and Via Licensing saw it shell out over $500 million in royalties during 2017 – a fairly manageable 4.2% of smartphone revenues. Keeping that figure under control will be a key goal for Lin as Xiaomi expands internationally and continues its licensing dispute with Ericsson.


16 Sandeep Chennakeshu, Blackberry

While the 2017 departure of Mark Kokes left a significant gap at the top of Blackberry’s licensing group, the company has not slowed down its IP value creation efforts. In November 2017 the Canadian business announced a deal with the Marconi Group to launch a new licensing programme focused on the wireless industry. The new entity, called Teletry, has been given right to sub-license a broad range of Blackberry patents to a majority of global smartphone manufacturers. As it continued to look at ways of licensing its vast portfolio, in early 2018 Blackberry also launched an aggressive assertion campaign around its intellectual property related to messaging, launching litigation cases in the United States against Facebook and Snap. President of Blackberry Technology Solutions, Sandeep Chennakeshu, who Kokes reported to before he left, is now the key figure when it comes to generating a return from the company’s large stockpile of intellectual property. Given that its portfolio touches on a wide range of industry verticals, the company’s presence in the monetisation market looks set only to grow.


YP Jou
Wispro/ScienBiziP/MiiCs
& Partners/InQuartik

YP Jou – Jack of all trades

A former in-house IP executive with Foxconn, YP Jou is now associated with four different service providers, some of which work exclusively for his former company and others that are aimed at the general market.

Since leaving Foxconn you have had leadership positions with Wispro, MiiCs, ScienBiziP and InQuartik. What is the advantage of working through so many separate entities and how do you find time to manage it all?

We provide IP or legal services to different clients and industries in different countries. Wispro was first established by Aileen Chang and then invested in by me. Wispro mainly provides legal and IP services in Taiwan to new technology companies and multinational companies and does not serve Foxconn.

ScienBiziP is a joint venture between me and Foxconn, providing IP applications and consultancy services. It only serves Foxconn and not third parties in Taiwan. In China, the United States and Japan, there is no such restriction.

MiiCs focuses on global intellectual property, acting as a technology transaction broker.

InQuartik is my personal investment, developing artificial intelligence (AI) to analyse patent data, because data service providers need to be independent. Although I have been involved in Wispro, ScienBiziP and MiiCs at different periods, these three companies are currently managed by their own teams and I give them guidance.

I currently mainly manage InQuartik and ScienBiziP Japan. Therefore, my time is abundant.

How is the Foxconn Group’s overall IP strategy changing as its business expands beyond contract manufacturing to areas such as industrial AI systems?

Foxconn has changed a lot in recent years, from hardware to AI and even platform services. Therefore, it has given up a lot of patents and is focusing on the IP deployment of 5G, 8K technology and key components, and more importantly, focusing on patent quality and value, rather than the number of patents.

You have made several deals involving former Sharp patents in the last year. What is your observation of the market for patent transactions and licensing?

The patent transaction (sale and buy) and licensing market is gradually maturing. Buyers and licensees will use Big Data tools to analyse the quality of each patent and the relationship between patent families. This will make it impossible for patentees to bundle a large number of patents without quality and value. In other words, patent Big Data and AI will make past information asymmetric and opaque transactions fairer and more transparent.

InQuartik is your offering in the IP analytics space. How do you differentiate your products in a crowded field, and what is next on your product roadmap for analytics?

The advantages of InQuartik’s Patentcloud are data quality (especially deep data for US patents and several countries) and the exclusive function of One-click, which enables users to immediately obtain valuable information on each US patent and its patent family, so that users can immediately see their strengths and weaknesses.

InQuartik’s Patentcloud roadmap now includes Patent Search, Quality Insights and Design Search, as well as other products such as Value Insights. I hope that Patentcloud can create a model of patent lifecycle management using Big Data, which will ensure that most of the patents have quality and value, while reducing the number of patents and making the market healthier.

You recently announced an alliance between InQuartik and IPwe, the blockchain-based service founded by Erich Spangenberg. How do you see blockchain impacting the IP services industry?

Blockchain is meaningful and valuable for patent applications, transactions and assets management. However, whether it is a success will depend on data quality, useful algorithms and new business models.

15 YP Jou, Wispro/ScienBiziP/MiiCs & Partners/InQuartik

YP Jou served as Foxconn general counsel for 18 years and his stable of IP service provision entities keeps him deeply involved in the Taiwanese firm’s strategy while also allowing him to pursue his own ventures in areas such as data. A key figure in monetisation consultancy MiiCs & Partners and legal firm Wispro, it is two other entities that occupy most of his attention these days. The first is ScienBiziP, and in particular its Japanese affiliate, which is the spun-out in-house IP function of Sharp. The Sharp portfolio continues to drive patent transactions, such as the 2018 disposals to Oppo and NPE Longhorn IP. The second key focus for Jou is his IP data firm InQuartik. This year it announced a strategic partnership with Erich Spangenberg’s blockchain start-up IPwe. The distributed ledger technology’s IP applications are more theoretical than anything at this point, but when two figures like Jou and Spangenberg announce a collaboration, the market sits up and takes notice. 


14 Joe Sommer, AT&T

As vice president at AT&T Intellectual Property, Joe Sommer is a key figure on the sales side of the patent market. In both cases, the product he is selling is a piece of the US telecoms company’s 18,000-strong patent portfolio, which is split across four key fields: wireless, communications/entertainment, networking/cloud computing and customer experience. AT&T has consistently been one of the most prolific sellers of US patents in recent years. The past 12 months have seen AT&T close deals with tech leaders including Uber and Canon, a good indication that even companies like the latter – which has one of the world’s largest patent portfolios and is known more for developing technology in-house rather than deal making – can find something of strategic value in the AT&T offering.


13 William Lafontaine, IBM

While IBM retained its customary top spot as the recipient of the most US patents in 2017, a high-profile infringement lawsuit against Groupon in 2018 demonstrated its ongoing licensing clout. Big Blue accused the online business of infringing several of its grants relating to e-commerce and received an $83 million damages payout from a US district court jury. In the course of the court proceedings it also came to light that IBM had already licensed the patents-in-suit to a host of tech giants including Facebook, Google and Amazon for between $20 million and $50 million each. As general manager of intellectual property, William Lafontaine is the key player in ensuring that the company’s regular supply of new patents generate a return for the business – and, as the Groupon case showed, there is no doubt that he remains at the helm of a licensing heavyweight.


12 Kenji Kondo, Toyota

As the world’s largest auto manufacturer, Toyota has plenty of pull in the ongoing effort to determine what licensing model should prevail in the era of the connected car. The flip side of that is that the company is a prime target for licensors seeking to expand into the car businesses, as we have seen in several new disputes over the past year. Kenji Kondo, the company’s president and general manager for intellectual property, occupies an influential position in the Japanese IP community – he is president of the Japan Intellectual Property Association and a planning committee member in the government’s IP Strategy Headquarters. With SEP policy questions at the fore in Japan, Kondo’s views are certain to receive a fair hearing at the highest levels.


11 Arvin Patel, TiVo

Having led Technicolor to $285 million-worth of licensing revenues in 2016 – a 25% jump from its 2015 performance – Arvin Patel took up the reins as TiVo’s chief IP officer in June 2017. The 20-year patent licensing veteran was a natural choice for the entertainment technology company, which is seeking to take its $400 million-a-year IP monetisation business to the next level. Recruiting former IBM executive Marc Ehrlich as senior vice president of patent strategy, Patel has further consolidated TiVo’s top-notch IP team, which already includes celebrated strategists such as Courtney Quish. Under his leadership, TiVo has strengthened its position in Europe and Australasia with a slew of recent licensing deals.


10 Eran Zur, Fortress

There remain few, if any, financial institutions that combine the depth of capital with the patent expertise of Fortress’s IP group. Headed by Eran Zur, the team has firmly established itself as one of the go-to providers of debt financing for the licensing industry; however, a couple of deals at the end of 2017 showed the extent to which it has broadened its investment horizons. The most high profile of these was a $100 million loan to Theranos, the blood-testing start-up that was rocked by investigations into its business practices. The loan was collateralised by Theranos’s patent portfolio. The second deal saw Fortress acquire certain assets, including intellectual property, from DivX, a provider of next-generation digital video solutions, for $41.5 million. Those transactions add to the already substantial patent portfolio that Zur and his team are currently monetising. Throw in the fact that the IP group has raised its first fund, rumoured to be just shy of $1 billion, and you have a standout 12 months.


9 Kasim Alfalahi, Marconi/Avanci

It was a big year for auto and Internet of Things-focused patent pool Avanci, which is part of the wider Marconi Group; it was able to announce its first automaker licensee, BMW, in December 2017. Shortly afterwards, it revealed a royalty scheme for vehicle makers ranging from $3 to $15 per unit. With its charter licence on the books, Avanci now faces the task of convincing other major players in the United States, Europe and East Asia that its pooled approach is the way forward. As the auto effort continued, the broader Marconi Group also took on sub-licensing rights for BlackBerry’s mobile-related patents. It all puts former Ericsson executive Kasim Alfalahi, Avanci CEO and Marconi Group co-founder, at the centre of what could become an important licensing player.


8 Laura Quatela, Lenovo

Laura Quatela continues to be one of the busiest executives in intellectual property, wearing hats across in-house, advisory and board roles. Her chief legal officer role at Lenovo puts her in an excellent position to direct the overall legal strategy of a major Chinese corporate and one of the country’s top domestic patent filers, whose patent portfolio continues to grow. Quatela also serves as an adviser and board member to Provenance Asset Group, the independent licensing platform she founded along with her Quatela Lynch McCurdy (QLM) name partners. In addition to her QLM advisory work, Quatela remains a board member at Technicolor SA. As chair of the French company’s strategy committee, she would have been a key figure in the firm’s decision to offload its licensing business to InterDigital – one of the biggest IP deals of the last year.


7 Seungho Ahn, Samsung Electronics

The June settlement of a long-running design dispute with Apple closed an important seven-year chapter in Samsung Electronics’ IP history. Senior vice president and head of Samsung’s IP Centre Seungho Ahn will be happy to put the dispute behind him, to clear the way for the other litigation on his plate – not least a bruising battle with Huawei across both China and the United States. While litigation is a constant for the Korean company, noteworthy from the past year is Samsung’s activity in the patent transactions market. It picked up small portfolios from Yahoo!, PARC and a number of defunct start-ups, adding to what is already the largest and (by some measures) strongest patent portfolio in the world. Ahn also cut licensing deals over the past 12 months that constitute highlights of the year with companies on the other side – that is power.


Bill Merritt
InterDigital

Bill Merritt – Modesty matters

In patent terms, perhaps no other deal over the past 12 months has been as significant as InterDigital’s acquisition of Technicolor’s patent licensing business. The deal, which closed in July, handed the wireless business approximately 18,000 grants and applications, including a leading position in the video-coding sector.

In the run-up to the deal, InterDigital had been signalling to the market that it was looking for M&A opportunities and, as CEO Bill Merritt explains, Technicolor was ideal for the company’s growth ambitions.

“We had gotten to the point that while the wireless component of the business was very strong, we needed another growth vector, but we wanted to do something that was very complementary with the things that we had done before,” he comments. “The Technicolor acquisition fit our strategy perfectly.”

“You have a technology in video that is critically important on smartphones,” Merritt argues. “Technicolor is an incredible brand in video as well and the portfolio was very strong, and we had access to their research and innovation centre going forward so it was a great fit.”

Adding intellectual property in the video space opens up InterDigital to some potential new customers (eg, in the TV sector) and enables the business to approach existing customers with a broader offering.

“The Technicolor transaction gives us incredible depth and that creates a more comprehensive dialogue with some customers. Now we can have a conversation around wireless devices, home display, set top boxes – it’s a very broad discussion and my experience is that the broader the discussion is, the easier the discussion is because there can be all sorts of trade-offs that can occur between the different components.”

Although Merritt insists that the primary focus now is on integrating the Technicolor business, he also admits that the deal may not mark the end of InterDigital’s M&A activity. “I think there are more opportunities for us to replicate the same kind of move, which is to acquire a particular business which has depth in a space that is relevant to mobile,” he reveals. “So yes, I think there definitely could be another move by the company.”

As they look to integrate the legacy Technicolor business and start to generate revenue from the combined portfolio, Merritt and his team should benefit from improving market conditions for licensors in the United States. While the company’s recent performance has been strong, it has not been immune from the headwinds that many licensing businesses have faced in recent years. Those have started to abate in large part because of a change in stance from the Trump administration.

“The United States has done a 180 degree turn on patents,” Merritt comments. “The most damaging piece [of the previous environment] was the perception that patents were bad because it allowed other countries to exploit that and speed ahead on patent protection.”

While the United States looks to make up some lost ground, global licensing remains subject to court rulings in different jurisdictions that may sometimes contradict each other. However, Merritt insists that sticking to one over-arching principle can help to ameliorate the impact of clashing jurisprudence.

“If you’re charging a very reasonable rate for a large portfolio of patents, we think we can weather all of those legal challenges because ultimately what they’re going after are the outliers,” he reflects. “We’ve got to be pretty modest in what we do and because it’s a big market, being modest for us is just fine.”

6 Bill Merritt, InterDigital

Under Bill Merritt’s leadership, InterDigital took another stride forward this year, announcing the $475 million purchase of Technicolor’s licensing business in March. Adding 21,000 patents and applications to InterDigital’s roughly 19,000 existing assets, the transaction placed the company among the biggest players in the technology licensing sector. It also plugged important gaps in InterDigital’s portfolio, strengthening its assets in the pictorial and telegraphic communication space, thereby complementing its wireless communication holdings. This is bound to strengthen the company’s position in the lucrative mobile device market. In the months preceding the Technicolor deal, InterDigital entered a licensing agreement with LG Electronics and had an infringement decision against ZTE Wireless upheld by the Federal Circuit. These deals follow a successful 2017 in which Merritt’s organisation enjoyed an increase in recurring revenue, earning $99.1 million in the final quarter – up from $93.6 million in the same period of 2016.


5 Gustav Brismark, Ericsson

It is tough going for Ericsson in both the commercial and IP markets right now; chief IP officer Gustav Brismark faces the challenging task of steering the Swedish company through this while preparing for a 5G era that could pay dividends. Licensing receipts came in at around $1 billion for 2017, a decline year-on-year. Brismark did not win any favours from the big US court decision in the company’s SEP case against China’s TCL – one he criticised in the pages of IAM as containing “methodological and mathematical errors”. There is an awful lot riding on the company’s appeal to the Federal Circuit. The ongoing suit puts Ericsson at the forefront of a legal effort that could have a huge impact on licensing actors across the board, whichever way it goes. At the other end of the tunnel is the rollout of 5G wireless technology, in which Ericsson is tipped to be a key patent owner. Brismark is betting that a transparent approach to royalties and working through entities like Avanci can boost Ericsson’s fortunes.


4 Erich Andersen, Microsoft

Under senior vice president for intellectual property, Erich Andersen, Microsoft’s IP group remains one of the most forward-thinking of any major patent-owning business. As the company’s wider business goals have shifted – most notably in relation to its focus on cloud computing – so Andersen and his team have used its considerable IP strength in support. In October last year the company extended its Azure IP Advantage programme to China to give its cloud customers in the country the same IP benefits as those in the rest of the world – including the extension of its uncapped indemnification policy to cover open source technology and making 10,000 of the company’s patents available to Azure customers as a defence against possible infringement lawsuits. Earlier this year the company also unveiled a new set of principles to govern its approach to co-created technology and the intellectual property that arises from collaborative projects. Under Andersen, Microsoft is using patents as a means to secure far wider business goals. That is ultimate IP value creation.


3 Alex Rogers, Qualcomm

Arguably no other major patent licensing business has been placed in the spotlight quite like Qualcomm in the last few years. For starters there has been plenty of M&A activity, with the chipmaker the subject of a proposed offer from Broadcom – which was ultimately blocked by the US government – and with its own offer for semiconductor rival NXP. That bid ultimately lapsed after Qualcomm failed to get the green light from Chinese regulators before the company’s own deadline. While those deals placed question marks over the strategic direction of the company as a whole, the ongoing litigation with both the Federal Trade Commission and Apple is of much more pressing concern for Alex Rogers, head of Qualcomm’s technology licensing. The dispute with the iPhone maker is particularly significant, affecting Qualcomm’s quarterly licensing revenues to the tune of several hundred million dollars. The company is also in negotiations with another hold-out, widely believed to be Huawei. While Qualcomm remains an undoubted patent-owning juggernaut, closing deals with both Apple and the Chinese telecoms powerhouse will have a significant impact on its licensing fortunes.


2 Ilkka Rahnasto, Nokia

The flurry of deal-making activity from Nokia which began with its May 2017 licensing agreement with Apple continued through the course of last year as the Finnish mobile giant closed deals with Xiaomi and, in December, with Huawei. It also signed a new licensing agreement with LG following arbitration between the pair over royalty payments. With a deal already agreed with Samsung in 2016, Nokia now has agreements in place with most of the largest handset makers ensuring that its annual licensing revenues look set to remain well above $1 billion for the forseeable future. The focus now for patent head Ilkka Rahnasto and his team switches to the company’s ability to license players outside of the telecoms space in other sectors such as automotive and to ensuring that technological progress in 5G wireless technology translates into more licensing success.


1 Jason Ding, Huawei

China is more important to the global IP market than ever before and Huawei’s Jason Ding is the most important in-house IP executive in China. After debuting on this list in 2016, Ding assumes the top spot following a year in which the company threw its full weight into the world’s biggest ongoing patent war – and going into a year in which it expects to play a major role in shaping the licensing environment for 5G. Owner of China’s largest and most respected global patent portfolio, Huawei has shown that Chinese firms can play hardball on the plaintiff side, too – earlier this year it quickly obtained a Chinese SEP injunction in its long-running battle with Samsung. The company’s suspension of royalty payments to Qualcomm as it was already reeling from Apple’s decision to do the same likewise showed the workings of a team that is confident in its influence. With a thriving handset business and one of the biggest single contributions to 5G standards, Huawei has a lot of credibility on both sides of the licensing market. As other players propose their licensing plans for the roll-out, Ding is content to keep the market waiting.


Jason Ding
Huawei

Jason Ding – A long way to the top

Huawei head of intellectual property Jason Ding has plenty to be proud of when reflecting on what the company’s IP team has accomplished during the 12 years that he has led it. The first thing that he points to is how the company is perceived. “Huawei’s IP brand has become well established – not just in China, but worldwide as well,” Ding observes.

A part of that has to do with how the company conducts business as a newly minted power player in the licensing world. Back in June, the rotating chairman of Huawei, Eric Xu, told a Mobile World Congress event in Shanghai that Huawei will not use its 5G SEPs to “squeeze” any companies, a sentiment that Ding confirms: “We use a friendly way to work under the FRAND principle.”

Indeed, Huawei’s licensing approach was tested in a recent SEP case it brought against Samsung in the Intermediate People’s Court in Shenzhen this past January. Huawei was granted an SEP injunction– just the second in China and one of Huawei’s biggest victories of 2018. Its negotiating tactics got the all-clear in that case, while the Korean firm was held to have “maliciously delayed talks”.

The Shenzhen court order against Samsung underlines rising IP risks in China. Ding says that his team is responsible for averting negatives, rather than producing positives. “To contain IP risk and ensure business safety is a major task,” he explains. “For the majority of IP managers, the most important issue is how to ensure the company’s freedom to operate and the cost-effective delivery of products and services to customers from an IP perspective.”

Lessons learned

Ding points to Huawei’s growing patent portfolio as a signal accomplishment. The Chinese company has spent years making up ground against older competitors; and while the numbers are no longer surprising, they are still impressive. A total of 1,900 grants last year made Huawei a top 20 patentee in the United States and a top five patentee in Europe.

However, the experience of building an IP department over a 12-year period has convinced Ding that numbers are not always important. Huawei’s IP team has held steady at around 350 people for the last few years, up from a few dozen when Ding took over. “Originally we had a simple goal: file patent applications,” Ding recounts. Now, that approach has been inverted: “We first align IP strategy with business goals.”

Observing some of the other Chinese tech companies attempting to follow the trail blazed by Huawei, Ding emphasises that more is not always better. “You need to consider what your major business is, set appropriate targets and not over-invest.” Ding believes that in their eagerness to minimise third-party IP costs, some firms overlook the fact that paying for intellectual property can be cheaper than developing certain capabilities in-house. “I see a lot of companies in China that file lots of patents and hire lots of patent professionals,” he points out. “A few years later, the company has no business left.” A difficult lesson on the importance of a business-first IP strategy, but one that has been absorbed by the IP leadership at Huawei.

Pragmatic transactions

Even as its filings grow, the company is actively pruning its holdings; Huawei has been a significant player on the sales side of the patent transactions market over the past year. Its deals with foreign NPEs have drawn particular attention. Former Huawei patents have now shown up in US litigation against companies such as Microsoft and Samsung. In addition, Huawei appears to have sold hundreds of Chinese patents to iPEL, a new US-based NPE that has said that it plans to focus on litigation in China.

“We have a need to control costs, so we will divest a limited number of patents to others from time to time,” Ding says by way of explaining such deals. The transactions are purely pragmatic, Ding states, and he emphasises that the company is more than happy to deal with operating companies, not just NPEs. The last thing that Huawei wants, he says, is to spark a patent war.

5G in focus

Averting courtroom confrontation is on the minds of many companies at the forefront of 5G wireless technology. While rivals – including Qualcomm, Ericsson and Nokia – have all announced preliminary royalty rates for 5G-enabled mobile devices, Huawei is playing its cards close to its chest. “We have no timeline for setting 5G SEP rates,” Ding notes, repeating the pledge not to squeeze other firms with what is expected to be a significant portfolio of 5G SEPs.

Ding is clear about the fact that Huawei is seeking changes between its own 5G SEP approach and that pursued by other major patentees in previous generations of wireless tech. “Right now, there are some patent owners that do ask for royalties inconsistent with their contributions, in our view. That’s why we hope that in the future, patent owners can use their patent portfolios in a more reasonable way.”

Although royalty burdens increased when wireless technology progressed from the third to the fourth generation, Huawei believes that 5G could be different. “Generally, we believe as the royalty base will grow with the expansion of categories and sales scale of 5G products, the 5G aggregate royalty rate could decrease,” Ding comments. “Even if 5G aggregate rates are not higher than 4G rates, it will be enough to compensate patent owners that have invested in the standard.”

Biding its time, Huawei is projecting quiet confidence that its contribution to the 5G standard will put it in a position to exert influence on the licensing conditions in this next generation of technology. The market reaction to its concrete 5G proposals will be very telling and pose one of the biggest questions in the world of intellectual property over the year to come.

Table 1.The IAM Market Makers 2017

1.

Ilkka Rahnasto, Nokia

2.

Erich Andersen, Microsoft

3.

Jason Ding, Huawei

4.

Alex Rogers, Qualcomm

5.

Gustav Brismark, Ericsson

6.

Bill Merritt, InterDigital

7.

Arvin Patel, TiVo

8.

Nathan Myhrvold, Intellectual Ventures

9.

William LaFontaine, IBM

10.

Eran Zur, Fortress

11.

Seungho Ahn, Samsung Electronics

12.

Paul Lin, Xiaomi

13.

Bill Coughlin, Ford

14.

Toshimoto Mitomo, Sony

15.

Kenji Kondo, Toyota

16.

Marty Roberts, RPX

17.

YP Jou, Wispro/ScienBiziP/MiiCs & Partners

18.

Yoshiaki Tokuda, Panasonic

19.

Leslie Ware, Marconi/PanOptis Patent Management

20.

Russell Binns, Allied Security Trust

21.

Shigeharu Yoshii, IP Bridge

22.

Joe Sommer, AT&T

23.

David Pridham, Dominion Harbor

24.

Allen Lo, Facebook

25.

Kurt Brasch, Uber

26.

John LaBarre, Google

27.

Laura Quatela, Lenovo/Quatela Lynch McCurdy

28.

Spencer Shen, ZTE

29.

Joe Chernesky, Kudelski/NAGRA

30.

Jim Skippen, Quarterhill

31.

Didier Patry, France Brevets

32.

Erich Spangenberg, Hermes Patents, SK14 Advisors SARL

33.

Joo Sup Kim, LG Electronics

34.

BJ Watrous, Apple

35.

Deirdre Leane, Technicolor

36.

Phil Hartstein, Finjan

37.

Keith Bergelt, Open Invention Network

38.

Kasim Alfalahi, Marconi/Avanci

39.

Joe Siino, Via Licensing

40.

Michael Friedman, Hilco Global

Table 2.The IAM Market Makers 2018

1.

Jason Ding, Huawei

2.

Illka 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, Wispro/ScienBiziP/MiiCs & Partners/InQuartik

16.

Sandeep Chennakeshu, Blackberry

17.

Paul Lin, Xiaomi

18.

Yoshiaki Tokuda, Panasonic

19.

David Pridham, Dominion Harbor Group

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