Volume XXXVII No. 4

Entrepreneurial researchers are discovering that now may be the time to bring their new technologies to market. Now that Internet euphoria has worn off, many investors are seeking new technology alternatives and some researchers are capitalizing on opportunities to start new ventures through their discoveries. A startup venture can lead to far better return on research in the form of significant stock positions plus consulting fees instead of technology licensing fees that may not compare. Attracting investors and partners who can help bring a new business or technology to life requires first and foremost a sharp business plan. Guidelines for creating a compelling business plan for a research-based venture, including what components it should contain, are provided here.

This paper outlines a “structured licensing” model to facilitate negotiation of multi-party patent agreements. Principles of legal engineering developed on Wall Street over the past several decades, in fields such as asset securitization, derivatives and structured finance, are applied to aggregate and to commercialize split IP positions, using special purpose legal entities (SPEs) created to carry out a single transaction. The role of an independent director serving as a neutral decision maker is also discussed.

In the new economy, the number of commercial agreements involving U.S.–Canada crossborder use or exploitation of technology or intellectual property has greatly increased. Similarly, the sale of licensed merchandise, such as apparel, toys, computer games and knapsacks, depicting such things as professional sports franchise logos and cartoon characters, has become more prevalent and almost commonplace. As a consequence, the negotiation of license agreements whereby the rightsholder to the underlying intellectual property licenses some of its rights to technology integrators or users, or to manufacturers and/or distributors of licensed merchandise, has also become more prevalent in both the commercial and legal environments.

There are many technology-rich companies that are facing uncertain financial futures. The equity markets that previously helped fuel the growth of technology companies have dried up. This article explores financing alternatives for these companies, including some of the options available under the U.S. Bankruptcy Code. Many troubled companies need to raise cash and restructure their debt obligations so that their projected cash flows are sufficient to pay their debt as it becomes due. Indeed, a common method of restructuring is to raise cash, use it to pay off some old debt, and restructure the remaining debt to pay it off over a longer period of time.

As Europe prepares for a community patent court, little attention has been paid to the implications for patent-related cases. This paper examines the pitfalls of an over-specialized patent litigation system.

A review and commentary on recent developments in the law of the Andean Community (Colombia, Venezuela, Ecuador, Perú and Bolivia) that relate to the field of licensing.

A review and commentary on recent decisions relating to licensing in the European Union.

Volume XXXVI No.3

Strategic Alliances have become so common that a company with none to point to seems to be left out. Possibly for that reason, some companies have adopted the practice of referring to virtually any relationship with another company (or university, or government laboratory) as a "strategic alliance," whether or not it is strategic (or even an "alliance"). Nevertheless, a true strategic alliance—one that advances the strategic direction of both parties—can be a very important element in modern business. In this paper we will consider some important types of alliances and a recommended process for establishing alliances that have good prospects for success. The closing section will review the elements of a partnership as they need to be embodied in a contract.

The increasing value of intellectual property (IP) has produced many new IPmanagement initiatives and activities designed to extract value from this form of intangible assets. Because the activities related to managing intellectual property are new, the managers whose job it is have little in the way of guides or textbooks on which to draw. As a result, many firms are using the experience of other companies to provide them with valuable information and lessons. Some companies have joined self-interest sharing groups and one-on-one benchmarking activities have increased significantly. (Although there are no hard data on the rise in benchmarking, heads of licensing groups in many leading companies say that they are increasingly receiving requests to be benchmarked.)

Valuation of intellectual property (IP) plays an important role to the portfolio management and value extraction activities of IPprofessionals. When valuing intellectual assets, there are many methods to choose from and these can vary widely in applicability and cost. In this paper, the distribution of expected values in a typical IPportfolio, and an appropriate range of value extraction options are discussed and provide a context for selecting and appropriately applying various valuation methods. A dozen or so of the most commonly used valuation methods are reviewed in detail and their range of applicability, advantages, biases and caveats are addressed. The IPpractitioner is presented with a practical approach to the selection and effective use of valuation methods in day to day IPportfolio management, value generation and value extraction endeavors.

I RS Revenue Ruling 68-609, also known as the "formula method" or "excess earnings method," is believed by many to be the IRS's preferred method of determining the fair market value of intangible assets1 . The appeal of the IRS 68-609 formula is its precise and entirely quantifiable approach. A fundamental axiom of business, though, is that for every complex problem there is a solution that is simple, straightforward and wrong. The formula method can yield an answer precise to the second decimal place, but the underlying assumptions of the method are rarely met. For example, a start-up biotech company could invent a cure for cancer that tastes like chocolate and costs a nickel, but without a track record of earnings, the formula method would value this intangible asset at zero, or less than zero.

Determining the present value of intellectual property rights to a future technology or product is a daunting task to some and a source of livelihood for others. Licensing executives and their advisors disagree on the standard and most straightforward method to perform such calculations. A conversation overheard between three IP valuation players is indicative of the most recent thinking on this subject. Any similarities to actual people or institutions, past or present, are purely coincidental.

I n recent years, Brazil has experienced a series of changes and improvements in the laws and regulations concerning licensing and transfer of technology. Since the revocation of Normative Act 15 of 1975 by the Brazilian Patent and Trademark Office (BPTO) in the early '90s, there has been considerable relaxation of the rules and practices governing the examination and approval of licenses and know-how agreements.

Intellectual capital is likely to dominate everybody's professional life in the near future, since it is the new wave of interest in the business world. It is therefore prudent for in-house patent professionals to be aware of this development, especially since they will be among the first to be affected by it. The aim of this article is to explain why this will be the case and what can be done to prepare a patent department for this new era to come.

I n les Nouvelles, Volume XXXIV No. 1, March 1999, pages 1–2, this author had discussed the consequences of a landmark decision of the German Federal Supreme Court, keyword "Clinical Trials II," published in 1997, relating to the extent of the experimental use exception according to Art. 11.2 of the German Patent Act, reading in translation essentially as: "The rights conferred by the Patent shall not extend to acts done for experimental purposes relating to the subject-matter of the patented invention."

One of the core tools of the trade of licensing practitioners is a volume of precedents prepared by an experienced practitioner such as Bob Goldscheider. Goldscheider may be one of the most long-standing active members of the LES (USA and Canada) and LESI. His text, The New Companion to Licensing Negotiations is the fourth version of his "Companion" series and is the outcome of many other works that he has written.

A review and commentary on recent developments in the law of the Andean Community (Colombia, Venezuela, Ecuador, Perú and Bolivia) that relate to the field of licensing.

A review and commentary on recent decisions relating to licensing in the European Union.

Volume XXXVII No. 2

Anti-trust or competition law in Australia is to be found in the Trade Practices Act 1974. The Act is reflective of both the anti-trust laws of the United States of America and, to a lesser extent, the European case law dealing with abuses of dominant positions. Broadly speaking, the Australian legislation is built around a market-based competition test with certain conduct being absolutely prohibited.

According to the General Accounting Office, to compete in a global economy, companies must effectively exploit research and development to generate future value-added innovative products and processes1 . The challenge of innovation, i.e. the innovator's dilemma, is the irresolvable conflict between staying focused on the current market and at the same time recognizing and exploiting new opportunities that, initially, generate low profit margins2 . It is suggested that companies could circumvent the innovator's dilemma by establishing autonomous yet connected organizations that could identify and exploit emerging markets. The exact nature of these entities is not clear, but many companies have attempted to encourage innovation via a number of organization models, including centralized corporate R&D, advanced engineering groups co-located at manufacturing facilities, divisions, cost-centers, strategic business units, spinouts, and the like. However, the fundamental difficulty associated with the innovator's dilemma is, How is the organization simultaneously "connected to" and "autonomous from" the parent company?

New laws and amendments to existing laws enacted in the People's Republic of China during the past two years have reset the stage for doing business in the PRC, particularly for companies seeking to protect and to exploit their innovations in China.

This paper will limit its analysis to one aspect of the complex issues surrounding the Internet and its functioning, namely to the use of, and proprietary rights over, domain names and their relation to trademark law and, more generally, industrial property rights, and the names of persons. A second limitation will be that we are only concerned with the way the Italian judiciary system has dealt with the problem, leaving aside all out-of-court settlement procedures or voluntary jurisdiction and arbitration [including Internet Corporation for Assigned Names and Numbers (ICANN), Uniform Dispute Resolution Policy (UDR) and other national arbitration systems].

Dr. Razgaitis has for many years been one of the most popular presenters at meetings of the Licensing Executives Society, usually relating to some aspect of valuation of intellectual property. Now he has written a comprehensive book on the evaluation of early-stage technology. Much of our all too little literature on evaluation of technology focuses on mature technology; Razgaitis' book is highly valuable to those of us, such as this reviewer, who tend to deal primarily in early-stage technologies.

Patents are expensive and valuable properties to own, and to maintain. Companies patent inventions that have future economic potential. However, without effective patent management, the benefits of these patents might be very easily lost. This is the reason why companies that own patents should use every effective tool available to continuously monitor external use of their patents. Patent citation mapping is considered a useful new tool for patent administration and management. Companies can identify external interest in their patents by monitoring the citations they receive from other companies' patents. External citations to a company's patent reveals a close link between the citing patents and the cited patent. Many times, the complementary nature of the patents are so great that in order to commercialize its own patent a company might have to resort to either licensing or infringing other companies' patents. The author used a computerized technique developed by CHI Research Inc., to map the citation links between various patents of interest. This paper presents a real case of a patent citation map analysis the author has conducted recently for a Japanese oil company. This type of analysis is usually useful in identifying companies that could be future competitors, infringers, or even partners.

On behalf of the European Committee of LESI, I had the pleasure of representing LES International at a Diplomatic Conference for the revision of the European Patent Convention of the EPC member states, which took place at Munich November 20 –29, 2000.

Volume XXXVI No.l

Sophisticated molecular genetics technology coupled with the sequencing of the human genome provide the means ultimately for understanding most diseases at the genetic level. However, these technologies and related events have heightened public awareness and created an environment mixed with excitement, caution and skepticism. Thus, not only does continuing research into the unknowns of the human genome but the licensing of human cells as research tools requires diligent and thoughtful planning, patient consent and frequent review. Licensing human tissue for research demands a carefully worded license agreement that prioritizes the patients' rights and desires ahead of individual investigator, institutional and company interests. Given the recent experience at our institution, this paper presents our attempt proactively to protect the specific interests and rights of our patient while providing the opportunity for research by other investigators as applied to the licensing of human cells.

Licensing of patents and know-how offers the potential to reduce time and expenditures and also to avoid risks.

This paper is directed to the efforts involved in starting a business, particularly to the issues affecting a lone inventor.

Collaborations between certain departments of university and industry have always existed in modern times. However, something has clearly changed over the last years. Particularly in the area of biotechnology and chemistry, collaboration between universities and the pharmaceutical industry has increased dramatically. Even well into the 1980s, the R&D organizations within European industry only had but a few formal research collaboration agreements with universities. Nowadays, negotiating and managing contracts, be it research collaborations, agreements for research fellows, agreements for contract work, Material Transfer Agreements, secrecy agreements, is becoming a key process within an industrial R&D organization. So what has happened? Pharmaceutical companies started to realize that they did not have the monopoly on good ideas and that any one company could not expect to generate more than a fraction of the totality of valuable intellectual property. It dawned upon the industry that no company could expect to survive solely on what it can generate internally. Moreover, the investment community started sharing these thoughts. Indeed the stock market rewards those companies that announce one research collaboration deal after another. On the other hand, universities started to realize that their research actually generated important intellectual property and DD March 2001 that they could become crucial partners for the industry. Said partnership could then generate income for university laboratories where money is always a scarce resource. This trend of increased collaboration between industry and universities started in the United States and, particularly, the enactment of the Bayh-Dole act of 1980 changed a lot in the United States: it allowed the universities to reap the actual benefits of the intellectual property they themselves had created.

Patents related to business methods have gained considerable publicity in recent years. Starting with the decision in State Street Bank & Trust Co. vs. Signature Financial Group, Inc. by the Court of Appeals for the Federal Circuit (CAFC) in the United States of America in 1998, 1 business method patents have become the subject matter not only of high-publicity litigation, such as Amazon.com vs. Barnes & Noble.com, but also of political discussion and legislative acts. In the U.S., the Inventors Protection Act in 1999 establishing the so-called "First inventor Defense" (35 U.S.C. § 273) was introduced specifically for methods of doing or conducting business. In Europe there is an ongoing discussion whether and to what extent existing patent law should be changed to accommodate software and business method patents, especially in connection with the revision of the European Patent Convention (EPC) and an intended EU directive on the patent protection for software-related inventions.

It is well appreciated that patent assets are becoming increasingly important strategic business tools, making or breaking technology companies. Consequently, management of these assets is becoming a core responsibility within companies. A frequently observed problem within intellectual property {IP) departments, however, is that because of the already heavy-let alone increasing-workload there is often insufficient time to manage adequately patent portfolios. Indeed, many IP departments are too busy with the day-to-day professional activities such as drafting, filing, prosecution, counselling activities, etc., and they do not have the time to take a step back and review and measure the effectiveness of their patent portfolios.

The Framework Program of the European Union has become a household name within the European research and development community. It has become the main instrument of the European Commission for the support of research and development within the Member States. The status of the Framework Program as such has been laid down in the Treaty establishing the European Union (Article 130 1). There it is said that the Commission has to use a Framework Programme for the implementation of its R&D activities.