Evolve or Perish: Legal Tech at the Center of Patent Darwinsm

Evolve or Perish: Legal Tech at the Center of Patent Darwinism

©2 0 1 5 INNO GRAP H Y, INC. : : CO NFIDE NTIAL NOVE MBE R 1 0 , 2 0 15

PANELISTSJames Billmaier, CEO & Co-Founder of TurboPatentIan D. McClure, VP of IP Strategy of Black Stone IPNicole Shanahan, Stanford CodeX, Founder of ClearAccessIP


HOSTED BY John F. Martin, CEO Innography

https://www.innography.com/


Agenda

• Meet the Panel• How can we create low cost, highly effective patent monetization

strategies?– Nicole from Stanford CodeX– Jim from Patent Navigation– Ian from Black Stone IP

• Questions & Discussion

Download the Webinar

https://go.innography.com/patent_future_legal_technology_cost_revenue_on_demand.html



Nicole ShanahanStanford CodeX, Founder of ClearAccessIP

Nicole Shanahan is an attorney in California and a residential fellow at CodeX, the Stanford Center of Legal Informatics, a joint center between Stanford Law School and Computer Science. She is the founder and CEO of ClearAccessIP an integrated patent management technology, and a legal technologist who specializes in the utilization of structured databases, APIs, UI/UX, automation and SaaS.



James Billmaier CEO & Co-Founder of TurboPatent

James is the CEO and co-founder TurboPatent®, the first cloud-based, fully automated, patent production and prosecution solution. James has previously served as Chairman and CEO of Asymetrix, which he led to a successful IPO in 1998, and Digeo, Inc., which he co-founded with Microsoft legend, Paul Allen. At Digeo, James became the only entrepreneur to ever win back-to-back EMMY awards for technical achievement. James is a graduate of Santa Clara University and serves annually as an instructor in the MIT Gordon Program.



Ian D. McClure VP of IP Strategy of Black Stone IP

Ian D. McClure is a corporate, M&A and intellectual property transactions attorney and licensing business development professional with experience in a large law firm, as an in-house counsel, and as an entrepreneurial leader. Mr. McClure is currently Vice President of IP Strategy at Black Stone IP, LLC, an investment bank focused on valuing and trading intellectual property.



John F. MartinChairman & CEO of Innography

John F. Martin, moderator, is the CEO of Innography and former CTO, COO, and VP of Product Management for various software companies. A former McKinsey & Co. management consultant, John understands how to drive innovation internally and in support of emerging market segments, disrupting the status quo. John holds an MBA from Stanford and BS degrees in electrical engineering and computer science from MIT.



How can we create low cost, highly effective IP

management strategies?



What Does Coase Theorem 2.0 Look Like Applied to Patent

Operations?



The proof is in the pudding (and the pudding is transaction cost theory)



Patent OperationsCost Center Check List



Patent OperationsRevenue Center Check List



Identify the Relevant Technology







TurboPatent®

• “CAD” for Patent Professionals

– Architects and engineers have CAD software to increase speed and precision

– Patent professionals now have TurboPatent to develop and produce patents faster, more effectively, and with greater consistency.

REINVENTING THE PATENT PROCESS



Problem• Low quality patents & portfolios

– Is this what we intended to patent? – Is this patent well-enabled and not vague?– Have recent judgments diminished the value of this portfolio?



Problem• Low quality patents & portfolios

– Is this what we intended to patent? – Is this patent well-enabled and not vague?– Have recent judgments diminished the value of this portfolio?

SolutionMachine Analysis &

Validation



Problem• Security

– Hacking– Theft– Privilege Bubble



Problem• Security

– Hacking– Theft– Privilege Bubble

SolutionSecure Cloud Collaboration



Problem

Expensive!

82%PATENTABLE

24%PROTECTED

EARLY PHASE COMPANIES



SolutionPower tools reduce time & cost by 50%+







A Patent Market for Lemons

AdverseSelection– GeorgeAkerloff,1975



For most US companies, EVERY patent risk decision is a material event to the company

4x Patent filings since 1975 June 1, 2005

The Most US quarterly patent litigation filings in US district courts(3,122) ever in first the 6 months of 2015

$2.5-5M Spent in average fixed costs for patent litigation

$5M In average damages for losing patent infringement defendants

3B Spent in aggregate patent litigation legal fees in 2014(BTI consulting)

96% Percentage of US companies that make less than $10M in annual revenues

4% Percentage of US companies that can say every patent-risk taking decision is not automatically a material risk to the company

Net-Negative* Wealth effect for diversified shareholders related to patent litigation

Patent Market Today



IP Impacts Shareholder Value• Marvell – stock fell by 50% after patent litigation result with

Carnegie Melon

• Acorda Therapeutics - stock fell by 10% after IPR filing

• Nortel and MIPS Technologies deals – separation of IP from OpCo increased value of company

• Net-negative wealth effect for diversified shareholders– Study by Sangjun Nam & Changi Nam: wealth effect of patent

litigation is negative for defendant firms and insignificant for plaintiff firms.



Corporate Governance and IP



Patent information disclosure practices

300+

patent transfer transactions took place between 2011-2014 involving public company buyers, with patents in the same patent class as the patents invalidated in *Alice* (CPC G06Q).

Twopublic companies were among the top five buyers of patents in all three of the patent classes associated with *Mayo*, *Myriad* and *Alice*.

Some of those transactions were announced.

Noneof those companies has since updated information or risks about its portfolio to investors.

Very little licensing history is made known to investors.

Lots of licensing obligations are known or perceived by public companies.

Bare minimum of patent value information and risks are disclosed to investors.

Public Company Disclosure Requirements & IP



The Patent Market for Lemons

Uncertainties

Litigation

Clarity (strong patents)

Transactions

• $3 billion spent on patent litigation legal fees in 2014

• Most patent litigation district court filings EVER in the first two quarters of 2015, despite NPE filings down



Q&A

Download the Webinar

https://go.innography.com/patent_future_legal_technology_cost_revenue_on_demand.html


Data & Analytics

Evolve or Perish: Legal Tech at the Center of Patent Darwinsm