Key Patent Innovations
What does effective leadership look like at Key Patent Innovations?
At Key Patent Innovations (KPI), our approach is to hire experienced, enthusiastic self-starters. For us, effective leadership focuses on recruiting good candidates with the right professional and personal skills, ensuring that each team member is working on assignments that are challenging and important to achieving company goals. We make sure to solicit feedback on everything from corporate strategic objectives to more mundane issues, such as what new technologies would increase productivity and employee happiness. This requires constant communication with and between team members, which we accomplish through weekly team and project meetings and quarterly company updates and, more importantly, by implementing a team approach to each project so that employees and consultants are in constant contact with other team members.
How is the launch of the UPC affecting your clients’ European IP strategies so far?
We have no doubt that the UPC will be a gamechanger when it comes to patent licensing. However, just like any new system, it is prudent to proceed with caution at the beginning, which is why we have adopted a wait-and-see approach to the UPC. We do see the UPC as a key forum for our future licensing programmes and we are developing patent prosecution and maintenance strategies with it in mind. For example, it is likely that we will increase the percentage of our prosecution and maintenance budgets towards European patents. However, to what extent the UPC will play in our future strategies will depend, in large part, on what we observe over the coming months as the initial cases make their way through the system.
Have you had to adapt the way that you view portfolio strategy to manage economic headwinds (eg, pruning or allowing patents to lapse)? If so, what changes have you made and how are they working in practice?
To a large extent, we have not had to adapt our portfolio strategies in view of economic conditions. However, we do always consider future economic forecasts in various jurisdictions to ensure that our resources are being deployed appropriately. For example, if mobile device chip suppliers are shifting manufacturing operations from country A to country B, such decisions may influence our relative spend in those jurisdictions on patent maintenance and prosecution. For us, economic headwinds also present new opportunities, as companies with valuable patent portfolios are often more receptive to partnering with companies like KPI to monetise their patents. Finance departments challenge the business units to implement solutions that will not only generate near-term revenue but also reduce internal costs.
What makes a world-class IP monetisation strategy?
Three things: valuable assets, talented people and strong financial backing. If any one of those three elements is missing, the monetisation strategy will not reach its full potential. That is why KPI has enjoyed the success that it has; we only invest in patents from technology pioneers that have demonstrated value to the market. KPI has assembled a world-class team of lawyers, technologists, licensing professionals and financial experts that have focused expertise in the business of patents. We are fortunate to have a financial partner that understands the patent monetisation business and is ready and willing to invest significant dollars on patent licensing programmes where untapped value can be demonstrated.
How would you characterise the European licensing landscape at present?
We would characterise the landscape as one of promise but uncertainty. The launch of the UPC brings tremendous possibilities to licensing programmes, from both timing and value perspectives, as pan-European patent enforcement should bring efficiencies to licensing discussions. However, how the UPC operates – particularly in terms of injunctions – remains unclear. There is greater uncertainty, however, surrounding SEP licensing. The current draft proposal from the European Commission regarding SEPs has introduced confusion and near-term unpredictability to licensing campaigns. However, the recent success of companies like Ericsson in licensing their SEPs along with the uptick in patent pool membership directed at standards-intensive industries does support our view that, despite this uncertainty, those who have large fundamental portfolios and run sophisticated well-thought-out programmes will continue to have success in European patent licensing.
What recent decisions or legislative developments are having the biggest impact on IP strategy in Ireland right now?
The development having the biggest impact on Irish IP strategy is probably the pending constitutional referendum for Ireland to join the UPC. While everyone is operating under the assumption that the referendum will pass – and law firms and other businesses have ramped up hiring and operations in Ireland to handle UPC-related matters – it will be a welcome relief when it is done.
What have been some of Key Patent Innovations’ proudest achievements since its inception?
Our proudest achievement is our subsidiary Malikie Innovations’s recent purchase of the BlackBerry patent portfolio. Aside from being one of the largest patent portfolio purchases ever made, the process confirmed that KPI has a strong, diverse and talented team that is skilled at not only identifying high-quality purchase opportunities, but also closing the deal.
In just a few months, we have also made great strides in launching our monetisation programme, which again is a testament to the strong team that we have in place. This achievement, however, is even more special because while we were closing the Malikie patent purchase, our other subsidiaries Pictiva Displays International (which owns and licenses over 2,000 fundamental OLED patents invented at OSRAM) and Valtrus Innovations (which owns and licenses a diverse portfolio of about 2,000 valuable patents from Hewlett Packard Enterprise) concluded significant licence deals that also validated the value of those investments.
As more and more industries are affected by technological convergence, what considerations should patent owners bear in mind when assessing their existing IP strategies?
First, when drafting patents, patent owners need to make sure that the claim scope is broad enough to cover the future product roadmap. For example, if a mobile phone company develops a novel wireless communication technique, it should secure patent rights that are broad enough to cover implementation of the technique in devices beyond mobile phones.
Second, companies should consider proactively establishing internal plans to out-license patents and technology to other companies that sell products in non-competing industries. Time and time again, we have seen situations where companies have a need for near-term revenue and identify the monetisation of their patents as part of the solution. Unfortunately, implementing such a strategy takes time, which often leads to either the strategy being scuttled or the patent assets being disposed of for diminished value.
Third, companies should implement regular IP audits, during which they identify patent assets for potential divestment – with an eye towards identifying high-value patents that are not core to the company’s existing business but would be of significant value to others in non-competing industries. As technologies converge, it becomes more and more likely that patents issued years ago have value that was not foreseen at the time. Periodic portfolio reviews, with fresh analyses of the individual patents, will allow companies to effectively unlock additional value from the portfolio.
What trends do you see emerging in FRAND licensing and how can companies best prepare to take advantage of these?
One of the most recent trends is the uptick in patent pools for FRAND licensing in specific segments, such as automotive, video and IoT. Another trend is the enforcement of SEP patents in specific jurisdictions that have shown a willingness to set FRAND rates applicable to worldwide sales. Patent owners can prepare to take advantage by aligning patent prosecution and maintenance strategies with these trends. For example, if a relevant pool assigns more value to patent families that have issued patents in China or India, patent owners will want to prioritise those jurisdictions when deciding where to spend prosecution and maintenance budgets. Similarly, since countries like India or the United Kingdom have taken a proactive approach to handling SEP/FRAND matters, patent owners may want to ensure that those jurisdictions are prioritised when portfolio decisions are made. As for implementers, they too can take advantage of these trends by educating themselves on the rates and terms being offered by the various pools, as well as the FRAND analyses being applied by the various courts, and then using this data in productive licence discussions with patent owners.
Is Key Patent Innovations taking steps to future-proof itself, and if so, what does this approach look like?
We are building something special here at KPI. While the platform is only slightly over three years old, it has already made significant investments in world-class patent assets, realised tremendous success in licensing its patents and built an internal team and network of expert advisors that includes some of the most experienced and respected patent professionals in the world. We intend to future-proof this success by continuing to identify and close on valuable patent purchase opportunities, as well as building our team with younger talent who can be mentored by the seasoned experts that we already have.
Managing Director, Key Patent Innovations
President, Patent Platform Services
Chief Operations Officer, Patent Platform Services
Licensing Executive, Patent Platform Services