Category: News

Investors, both speculative and strategic, are adjusting to the emergence of a bold new category of assets—digital collectibles. NFTs, or Non-Fungible Tokens, are so called because they are irreplaceable or one-of-a-kind artifacts—effectively, digital “limited editions.”

NFTs trade on blockchains or distributed ledgers, typically without middlemen or brokers. The primary advantage of most blockchains is transparency and efficiency. Agreements are recorded on an open ledger for all to see. This is especially attractive to frequent traders who require accurate pricing and full disclosure for difficult-to-value assets.

Now, two stalwarts in the intellectual property world, IBM and IPwe, believe that NFTs can be used to take patent monetization to new heights. They have teamed up to tokenize patents on the IBM blockchain…But given IBM’s depth in blockchain technology, its expansive patent portfolio, and IPwe’s experience in patent transactions, IP watchers will want to keep a close eye on developments.

Continue Reading

“IPwe today announced plans to begin representing patents as non-fungible tokens (NFTs) or digital assets by working with IBM (NYSE: IBM) to create the infrastructure for representing patents as NFTs and storing the records on a blockchain network. The tokenization of intellectual property (IP) will help position patents to be more easily sold, traded, commercialized or otherwise monetized and bring new liquidity to this asset class for investors and innovators.”

Continue Reading Here

“Intellectual property specialist IPwe, which has been working with IBM for years on a blockchain solution for the patent industry, announced on Tuesday that it will begin representing patents as non-fungible tokens (NFTs), or digital assets, in a deal announced in conjunction with IBM.”

Continue Reading Here

“IBM, the longtime top U.S. patent recipient, and IPwe, the Paris-based company behind the world’s first global patent market, have teamed up to launch an ecosystem for patent-based non-fungible tokens, or NFTs.

The patent tokens allow owners to license, sell and otherwise monetize their intellectual property on IPwe’s global patent market and other platforms. Patent NFT trials begin today, and the company expects the NFTs to be commercially available by the end of 2021.”

Continue Reading Here

“As technology demystifies IP, money will flow into the space like never before”, said IPwe CEO, Erich Spangenberg.

AI and blockchain not only mean quicker execution and lower transaction costs, but could also transform patent and IP management.

The technology is making patents understandable at a level adequate for non-experts – thus transforming patents as an asset class.

More money than ever before is flowing into the IP space and the sums are only going to increase.

In an exclusive interview with IAM, Erich Spangenberg talks candidly about the need to ‘dismantle silos’ in the world of intellectual property, how AI can fundamentally disrupt patent monetization & investment, and the roadmap for the IPwe platform to connect and centralize the decentralized IP ecosystem.

Read the Full Interview

Background

Under Armour, founded by Kevin Plank, started in a Washington basement in 1996. Touting a special fabric to enhance performance and endurance, it established itself as one of the fastest-growing companies in the sportswear business. With a mix of media attention, strategic partnership and strong revenue records, the brand solidified among the titans of sport and athletic wear.

The M&A Transaction:  In 2013, the rising sports brand stepped up its digital health game by acquiring MapMyFitness – Texas-based health-tech startup for $USD150 million. MapMyFitness, which had about 20 million registered users offered running, biking, and walking apps and social networks that integrate with a wide array of other digital health apps and some consumer electronics devices. This put Under Armour in charge of one of the biggest social sports communities on mobile devices and was the first more for the pioneer in moisture-wicking shirts into digital health.

The “Uh Oh” Moment

In early 2014, Adidas (German athletic footwear and apparel brand) filed a federal lawsuit claiming that Under Armour and its recently acquired subsidiary, MapMyFitness, were willfully infringing on as many as 10 Adidas patents by marketing aforementioned digital fitness technologies.

The Outcome:

Under Armor launched 10 patent invalidation proceedings (aka IPRs) in the first 9 months of 2015.

In May 2016, the parties resolved their patent litigation and reached a settlement agreement in which Adidas’s claims were dismissed with prejudice.

Adidas granted a license to its patents in exchange for a confidential licensing fee payable by Under Armour and MapMyFitness.

Key Lessons

Expand in new markets with confidence but be aware of IP risks.

It is now an industry standard that the portion of total acquisition costs allocated to M&A Patent Diligence ranges from 1% up to 5%. The diligence is too often restricted to plain title checks while a true M&A Patent Diligence should include a review of all patent-related risks. In the case of Under Armour, a proper diligence would have flagged a risk emerging from the German behemoth’s patent position and allow Under Armour to plan ahead accordingly.

For Executive Management: Manage patents proactively – Patents are not just about protecting innovation but more importantly patents can build a competitive advantage that helps you conquer new markets and exert monetary pressure upon your competitors.

For Investors:  Be informed – the cost of an IPwe M&A Patent Diligence, part of the IPwe Reports family, will make investments safer. Our reports give you incredible insights to a company’s IP position relative to their market and competitors. Get informed and ask smart questions.

For Advisors: Understand the risks – IPwe Reports enable you to intelligently assess IP risks at a nominal cost. IPwe then offers solutions to mitigate those risks. You can use IPwe Reports to spot the issues and then apply your expertise to advise your client on how to best mitigate risks.

Background

Over the last decade, the automotive industry has quickly built connectivity in cars, introducing GPS-based navigation systems in 2003, Bluetooth functionality in 2006, Wi-fi and 4G between 2008-2012 and streaming services in 2014. While the “smartphone patent wars” peaked during this period, the automotive industry was left unharmed and continued implementing the latest connectivity solutions to bolster safety measures and added value for their customers. As it is common practice in the automotive industry, the suppliers in the respective tiers – if at all – contractually agreed to obtain the necessary licenses for the use of these technologies.

Automotive Licensing Offers: While the smartphone patent wars increased the license-saturation in the mobile phone industry, the end user prices also declined significantly, particularly in the low-price segment for smartphones. Although sizable, the price sensitivity in the smartphone market led to tough license negotiations, often requiring years of litigation.  

It is understandable for big licensors to explore other avenues for their license offers – finding premium (and connected) automobiles an ideal market-segment with high implementation rates, very low numbers of licensed products and very high-end user prices. A $USD 50k+ vehicle would be unsellable if a low double-digit dollar license was added to the sales price? Pooled offers like Avanci (2016) or Via, along with standalone offers like Broadcom (2015) and others began to emerge.

The “Uh Oh” Moment

Then came the sizable lawsuits, with Broadcom sueing Volkswagen in 2017 over automotive connectivity asserting a Billion-Dollar claim; infringement campaigns against BMW and Daimler followed in 2019. While BMW quickly paved the way for Avanci’s license offer by taking an automotive license in 2018 with Volkswagen and Volvo to follow shortly afterwards in 2019, Daimler was not willing to conclude any patent license agreements and was consequently sued by three Avanci pool members in early 2019. Daimler decided not to settle but stood up to the claims by Nokia, Sharp and Conversant in a full-blown patent battle involving different tiers of suppliers, anti- and anti-anti-suit injunctions, antitrust complaints and even public campaigns to change the law.

The Outcome

The costly efforts by Daimler and its suppliers to evade payment obligations could not save the car manufacturer before court. Even though the European Commission proposed an arbitration solution, and German anti-trust authorities sent a first-time-ever amicus curiae brief to all seized courts trying to spare Daimler and asking the courts to refer the cases to the Court of Justice of the European Union, the courts in Munich and Mannheim rendered injunctions based on Sharp, Nokia and Conversant patents. These verdicts were an imminent threat and could be used to enforce a production and sales ban in Daimler’s very heartlands.

Key Lessons

Learn from similar assertion cases and always have a proper defense strategy up your sleeve.

Daimler and its suppliers put together a sound IP defense strategy with one major flaw: it was more than a decade too late. While Daimler sold products that implemented the latest state of wireless connectivity and used these to compete especially in the luxury segment and gain market shares, it simply pushed the IP-related business implications on its suppliers and relied on contractual indemnity clauses. Whether the suppliers conducted proper freedom-to-operate searches and actually tried to collect the required licenses was not tracked until the patent battle dawned upon the car manufacturer.

Patents that could have been used as bargaining chips for a cross-license for Nokia’s infrastructure offers and Sharp’s handheld and TV offers have been sold throughout the past decade, patents for autonomous driving chips and more are in fact listed right now on the IPwe private listings. If car manufacturers and/or suppliers are not interested in these, they might well lead to the next litigation in the space.

For Executive Management: Pay attention – IPwe’s AI-Analytics and Reports enable you to intelligently manage IP risk at a nominal cost.  IPwe Reports deliver invaluable information, in simple language easily understood by business executives, enabling you to effectively manage risk. Think of buying assets as a proper countermeasure to litigation and not just challenging validity and infringement of the patents in suit.

For Investors:  Be informed – the nominal cost of an IPwe Report is worth its protective weight in gold. Our reports give you incredible insights to a company’s IP position relative to their market and competitors.

For Advisors: Manage your IP risk proactively – For less than an hour of your counsel rate and for a fraction of your deal-fee for bankers, you can use IPwe Reports to spot the issues and then applying your professional judgement better inform and advise your client.

Background

In 2018, two of the most admired and experienced executives in tech and content, Meg Whitman and Jeff Katzenberg, teamed up to launch “QuickBite” – later shortened to Quibi. Quibi is a “new” model where short form high quality content is delivered to your mobile device— similar to YouTube but with Netflix grade content. The key technology behind Quibi is the ability to keep the video oriented properly as you rotate your phone. Really cool technology – except for one or two problems.

Financing:  In August 2018, Quibi secured $1 billion of funding from a who’s who list of investors. A second $750 million round was completed just before Quibi launched in March of 2020. No shortage of sophisticated investors, bankers, risk managers and lawyers were deeply involved and advising Quibi and their investors.

The “Uh Oh” Moment

Eko filed a patent in 2015 on video orientation technology. Quibi filed a patent on similar technology in 2018.  Apparently, none of Meg and Jeff’s legion of advisors nor investors thought to evaluate or disclose that Eko might have the better IP hand, and that it might be a good idea to secure a license from Eko or make sure Quibi’s technology does not lay down on top of Eko’s IP. In March 2020 days before Quibi’s official launch, Eko sues Quibi for patent infringement, backed by the $40 billion hedge fund Elliot Management.  

The Outcome: Less than six months after launching, raising $1.75 billion and being sued by Eko, Quibi shuts down.

Was the shutdown solely because of Eko and IP issues? No.

Was it partly because of a very flawed IP risk management strategy? Absolutely. 

Quibi flops and plans to distribute its remaining $350 million to investors, does Eko go away? Not a chance- creating an ongoing nightmare for investors and Quibi directors alike.

Key Lessons

Manage and invest with confidence, but do not fly blind to IP risks.

In fact, even the simplest of searches on the IPwe platform would have shown that Eko and Quibi’s patents were nearly identical – what we call a “matching score,” raising a red-flag. An IPwe Report costing $500 would have quickly flagged these IP issues for Meg and Jeff, investors and advisors, giving them the key information before the fact they could use to assess and mitigate. IP risk is a business issue executives, investors and advisors need to understand in a world where 84% of most balance sheets are intangibles.

For Executive Management: Understand the risk – IPwe Reports enable you to intelligently manage IP risk at a nominal cost.  IPwe Reports deliver valuable information, in simple language easily understood by business executives, enabling you to effectively manage IP risk.

For Investors:  Be informed – the nominal cost of an IPwe Report is worth its protective weight in gold. Our reports give you incredible insights to a company’s IP position relative to their market and competitors.  Get informed and ask the intelligent questions.

For Advisors: Anticipate and identify– avoid putting yourselves at risk by not identifying IP risk proactively. For less than the cost of an hour of counsel time and a fraction of a deal-fee for bankers, you can use IPwe Reports to spot the issues and then applying your professional judgement to identify, better inform and advise your client.