There is little doubt that last year was among the most momentous of recent times – in intellectual property as in so many other areas. That made choosing our IP personalities of 2016 a tough task
The list of contenders for the 10 IAM IP personalities of the year for 2016 was probably longer than that for any previous year – so much has happened over the last 12 months in so many different parts of the world. But after a great deal of consideration, the final list has now been drawn up. As long-time readers know, we define a ‘personality’ in broad terms. You do not have to be a human being or even a single identifiable entity to qualify – it is all about who and what caught our eye over the past 12 months. With that in mind, this is who and what we felt defined the last year in intellectual property.
Antitrust in Asia
It was deja vu all over again for Qualcomm when in late December the Korea Fair Trade Commission (KFTC) fined it the equivalent of more than $850 million because of abuses of Korean competition law connected to its licensing practices. Qualcomm has said that it will appeal the finding, although this is not the first time it has been hit this way in Asia: back in February 2015, it agreed to pay a fine of close to $1 billion to end an investigation by China’s National Development and Reform Commission (NDRC). Lest anyone think that Asian antitrust authorities have it in for Qualcomm alone, it became abundantly clear during 2016 that interest is growing in the intersection between competition law and IP deal making across the continent. In China, the NDRC is working on guidelines for the application of competition law to intellectual property; in Korea, the KFTC has amended its rules relating to the unfair exercise of IP rights; and in Japan, the Fair Trade Commission has made changes to its Guidelines for the Use of Intellectual Property under the Anti-monopoly Act, which look like they will make life tougher for owners of standard-essential patents. In India, too, the government is homing in on the issue.
The CEO of defensive patent aggregator Allied Security Trust (AST) enjoyed a high-profile year, thanks to the firm’s management of the Industry Patent Purchase Program (IP3). Bringing together a group of major businesses – including the likes of Google, Microsoft, IBM, Ford, Apple, Cisco, Honda and Facebook – IP3 offered patent sellers the opportunity to pitch their wares and strike deals quickly. It proved highly popular, with 434 rights holders submitting 1,378 deals for consideration, resulting in 56 offers with a total value of $5.3 million. Launched in late May and completed by the end of the summer, IP3 was a ground-breaking expansion of Google’s 2015 Patent Purchase Promotion. The fact that AST ran the show bears testament to Binns’s leadership and the strength of the team he has around him. For many years, AST was happy to keep a low profile while others made the noise and hit the headlines; IP3 changed all that. Expect it to be back – in one form or another – later this year.
In a year of surprises, this was up there with the biggest. The United Kingdom’s vote to leave the European Union was a major shock for many and has left IP owners in limbo. For a while, it seemed as if the result would push the long-anticipated Unified Patent Court (UPC) system into the long grass, as the United Kingdom’s ratification is needed for it to come into force. But in another surprise move, the UK government announced at the end of November that it still plans to sign up and that the process should be completed by the middle of this year. While that may be seen as good news, it still leaves many questions – such as whether the United Kingdom can continue to be a UPC member state after it has left the European Union and what happens if it cannot. These questions will need answers, and quickly. More widely, Brexit looks likely to mean major rethinks for rights holders of all types as EU directives covering copyrights, designs and trade secrets – as well as enforcement – may no longer be valid in the United Kingdom; while the United Kingdom itself will in all likelihood leave the Community trademark system, with all the implications this carries. What a mess.
It does not seem that long ago that BlackBerry was standing shoulder to shoulder with Google and others in decrying the patent privateer business model, as well as transfers from operating companies to patent assertion entities in general. Times change, though. After a difficult few years, 2016 saw BlackBerry get serious about monetising its patent assets – whether through sale, assertion or licensing. At the heart of the new strategy is Mark Kokes, who was recruited in 2014 from InterTrust as the company’s senior vice president of intellectual property, licensing and standards. Kokes does not court publicity and is well known for playing his cards close to his chest, but he was brought in to do a job and, having taken a few months to survey the lie of the land, is now well into the business of getting things done. The pressure to do so comes straight from the top, with CEO John Chen having identified IP licensing as one of the key planks of his revival strategy for the Canadian tech giant. Combine that with the fact that he has one of the biggest, most interesting portfolios in the communications space to play with and Kokes looks set to be making patent market news for years to come.
Not only does China handle more patent applications than any other country, as well as more patent suits, it is also becoming one of the world’s most patent-friendly jurisdictions. This was a trend that accelerated during 2016, when it emerged that foreign rights holders had enjoyed a 100% win rate before the Beijing IP Court – one of three established in the country in 2014 (the others being in Shanghai and Guangzhou) – in its first full year of operation. What is more, unlike their counterparts in the United States, the Chinese courts are willing and able to hand out injunctions. It’s not all positives in China – damages remain low (though they are rising), enforcement of court decisions is often a problem and there are still issues around protectionism – but for a country with no strong patent tradition, China has come a long way fast. With manufacturing jobs moving to low-cost countries, the government’s push for an economy built on innovation is only likely to reinforce this trend. Perhaps the most significant confirmation of what is happening came at the end of the year, when it was announced that Qualcomm had settled a high-stakes patent dispute with mobile manufacturer Meizu. This was a US company which had taken action against a flag-waving local business – yet in the end, it was the latter which concluded it could not win. That says a lot.
There are few more experienced operators at the top end of the IP market than Laura Quatela. As head of intellectual property and then president of Kodak, she was intimately involved in developing the company’s IP strategy and in carrying out the 2012 patent sale which subsequently enabled it to escape from bankruptcy. From Kodak, she moved to Alcatel-Lucent in the summer of 2014, having set up IP consultancy Quatela Lynch with former Kodak chief IP officer Tim Lynch. With another report direct into the company’s CEO, Quatela was a key player in Alcatel-Lucent’s merger with Nokia; and while all this was happening, she also sat on the board of Technicolor as it went through a prolonged dispute with an activist shareholder. In November 2016 Quatela – a fluent Chinese speaker – took another big career step forward when she was appointed chief legal officer of Lenovo; once more, she will report direct to the CEO. With such a record, it is hard to think of anyone who has done more IP work at board level than Quatela. While her new job involves a much wider remit, given Lenovo’s ongoing need to secure freedom to operate, she will doubtless be spending a lot of time liaising with one of her own reports – the company’s IP head, Ira Blumberg.
In early September Rovi Corporation completed its purchase of TiVo and a new entertainment technology super-company – which retains the TiVo name – was born. The merger also created an IP powerhouse, which puts Courtney Quish – who joined Rovi in March 2015 with a specific IP M&A strategy role – at the heart of its operations. Since moving from private practice at Mintz Levin to the corporate world at Rovi, Quish has made a big splash, playing a key part in negotiating an agreement with Intellectual Ventures which saw Rovi become the non-practising entity’s (NPE) exclusive partner in licensing its combined patent portfolio to over-the-top content technology customers. While product development remains big business for Rovi, so too does IP licensing, and its reach and influence continue to grow. In August it announced that it had concluded a 10-year licensing renewal agreement with DISH Network, meaning that nine of the top 10 US pay-television operators are now under licence. Another big deal with Netflix was announced at the end of November, followed by yet another with HBO at the start of this year. The TiVo hook-up will give Quish even more assets to play with in a market in which patents have an increasingly important role. Watch this space.
It has been a busy year for Apple’s former director of patent licensing and strategy. It began with Unwired Planet – the NPE he joined as CEO from Technicolor in mid-2015 – securing significant patent litigation wins in Europe and saw Teksler call for a major rethink in the way that fair, reasonable and non-discriminatory licensing is carried out. However, only weeks later, it emerged that Teksler was stepping down from Unwired Planet as the firm was leaving the patent business and selling its assets to Optis. A few months of relative quiet followed, with Teksler taking the opportunity to do some consulting work for Via Licensing; this was soon followed by the announcement that he had been appointed new CEO of Canadian NPE Conversant. All in all, it has been a frenetic three years for this IP market veteran, but he now has an opportunity to help revive the fortunes of a firm which is beginning to bounce back from a series of tough knocks.
If 2015 was the year in which the Canadian NPE’s boss, Jim Skippen, announced he was to step down and then changed his mind, 2016 was the year in which it made history. At the start of November, one of WiLAN’s subsidiaries – Wireless Future Technologies Inc – filed suit against Sony in the Nanjing Intermediate People’s Court, becoming the first western NPE to initiate litigation in China. Not only significant for WiLAN itself, this move was also a major vote of confidence in the Chinese patent system and will be closely watched by other NPEs seeking monetisation opportunities outside the United States as the market there remains hostile to patent owners. Long known for its pragmatic approach to IP deal making, WiLAN has focused heavily on Asia in recent times and struck several deals with major Japanese companies. The Chinese action against Sony may ultimately result in another one; but whatever happens, WiLAN’s place in the record books is now assured. It could well have started something that gets very big over the coming years.
Who says the IP deals market is flat? During 2016, Chinese mobile manufacturer Xiaomi – not yet 10 years old – seemed to be on a one-company mission to prove that this is far from the case. In January it emerged that Xiaomi had obtained a suite of Broadcom patents, while a month later came news that it had acquired a significant portfolio of US assets from Intel. However, both deals were eclipsed by a ground-breaking transaction with Microsoft announced at the end of May – a win-win for both that exemplified how intellectual property now forms the bedrock of much wider collaborations between operating companies. While all this was happening. Xiaomi was also incorporating Zhigu Holdings into its internal operations – a move that saw the aggregator’s president and chief operating officer, Paul Lin, become vice president of IP strategy. This could well prove to be a masterstroke, with Lin having gained a great deal of deal-making experience at both Intellectual Ventures and Microsoft while based in the United States. Like many young Chinese technology businesses, Xiaomi is running a significant patent deficit; unlike many of them, it has recognised that it needs to be aggressive in doing something about this. To expand, it will not only have to develop its own intellectual property, but must also continue to be active and creative in bringing this in from third parties. With Lin enjoying enlightened support from the very top of the company, Xiaomi is set to become an even bigger patent player in 2017.