Last week, this column covered the events of the first week of the virtual edition of the IP Dealmakers Forum in 2020. Fortunately, the second week of the conference was just as action packed, albeit without repeating the very tasty and informative whiskey tasting that the good people had of Fine & Rare NYC performed with serenity. In its place as a virtual social event, the Trivia Night hosted by TeamBonding took its place, with the usual range of questions about sports, entertainment, and history, supplemented by IP-specific queries created by the IP Dealmakers hosting team. It was a fun time with panelist, colleague and trivia monster Jackie Hutter getting the honors. Kudos to the IP Dealmakers team for recognizing the importance of bonding events at industry conferences and doing their best to provide fun variety despite the challenges that arise. The ultimate success of a conference, however, is whether it is successful in terms of content. Busy professionals invest their time and resources to participate because there is something they want to learn.
As expected, the content delivered at IP Dealmakers. As in the last week, it would be impossible to accurately reproduce all the findings from the panels of the second week in the space of this column. However, we can give a taste of what is going on right now, especially in relation to the ever-changing nature of IP practice. In particular, I want to focus on three key takeaways from different panels that I attended over the week. Again, this is just an idiosyncratic selection of the broad and in-depth discussions that each panel at IP Dealmakers has had. For our purposes, however, I want to focus on three main conference topics that have also been important topics of this column over the years – and promise to be part of our discussions in the years to come: 1) diligence, 2) venue, and 3) licensing .
First, diligence. As the IP Litigation Funding Board rightly pointed out, due diligence is one of the key areas in which IP owners can benefit from litigation funders’ assistance. Based on the premise that litigation funding is supplanting the traditional contingency model in certain types of patent litigation, there was a clear message of due diligence towards the IP community sent by litigation funders panelists. First, litigation funders have invested in and continue to invest in their due diligence, particularly on intellectual property issues. Second, the level of diligence in potential patent funding opportunities remains higher than ever before, even as more patent matters are brought to donors for review. Third, litigants and their law firms do best by taking a proactive role in the due diligence process, providing funders with all the information they need to delve deep into the risks of a particular potential investment and willingly discuss risks with funders as part of the due diligence process.
The benefit of all this care naturally has an impact on everyone involved. Law firms get a free second opinion on riskier non (fully) paying projects, backers project their investors’ capital out of bad investments, and patent holders get risk-based pricing based on an in-depth analysis of the strengths and weaknesses of their respective cases. In short, diligence remains a touchstone in the rapidly evolving patent litigation financing market.
Second, the venue. Just a few weeks ago this column dealt repeatedly with the importance of the place of jurisdiction in modern patent disputes. In that column, I claimed, “Jurisdiction is a critical part of patent litigation, from finding litigation funding before litigation to filing practice after filing.” The depth and breadth of the discussion at IP Dealmakers about the importance of the venue confirmed the correctness of this claim. For example, there was an interesting discussion about why it might be more critical than ever for patent holders to register at fast-track locations in order to get early technical discoveries from defendants and to try to avert stays up to IPR – or IPR Institution itself, as long as NHK / Fintiv is viable. One might feel that where a case is filed shouldn’t matter that much, but the current reality is that the venue can have a profound impact on both the trail and the ultimate fate of a patent case. As long as it stays that way, we can expect the disputes at the venue to multiply and the issue to remain a staple of IP conference calling for some time.
Third, licensing. There is no doubt that much of today’s patent licensing activity is based, at least in part, on an assessment of the licensee’s damage suspension in the event of an infringement suit brought against him. While there have been a number of major patent litigation rulings recently, including some obtained by non-practicing companies or universities, patent holders remain frustrated that many (often targeted) tech companies are unwilling to issue serious licenses Discussions until sued. On the flip side, the same tech companies face the challenge of obtaining licenses if they are not forced to, just trying to hold back even more challenges from hungry patent holders.
It was therefore interesting to hear the different perspectives offered during the closing panel of the conference regarding connected cars and 5G, two critical areas of technological development and deployment. The focus of the conversation was everyone’s realization that the license model prevailing in one technology area – such as wireless communication – may be under pressure to adapt to another, such as connected cars. In other words, licensing models are not uniform – and nobody wants them to be. Patent holders looking to set a royalty rate on billions of communications-enabled chips don’t want that rate to apply to a car valued at over $ 40,000 that measures millions in sales at best. And defendants in one industry don’t want the start of damage set by licensees in another industry to be just one example.
Ultimately, conferences like IP Dealmakers are best when they help formulate the right questions that attendees need to consider as they perform their professional roles. This year’s conference may have taken place under unusual circumstances, but that did not prevent the panelists and participants from boldly phrasing both questions and their proposed answers. Of course, it can take some time to determine which of these answers turn out to be correct. But at least the IP dealmakers have sent a clear signal that anyone playing the IP game fully intends to keep trading.
Please send me comments or questions at [email protected] or via Twitter: @gkroub. Suggestions or thoughts on topics are very welcome.
Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading patent consultancy to the investment community. Gaston’s practice focuses on intellectual property litigation and related advice, with an emphasis on patent issues. You can reach him at [email protected] or follow him on Twitter: @gkroub.