les Nouvelles - September 2010


  • Les Nouvelles - September 2010 - Full Issue
  • PDF, 2.74 MB
  • Royalty Rates And Licensing Strategies For Essential Patents On LTE (4G) Telecommunication Standards
  • Eric Stasik
    Long Term Evolution, or LTE, is the latest sequel to the successful GSM series of standards. A so-called fourth generation (4G) mobile communications technology, LTE is an upgrade to UMTS/WCDMA (3G) providing an enhanced radio interface and all-IP networking technology. Like a sequel to a successful movie, LTE includes many elements of the original release and offers a few new twists. This is especially true when it comes to the matter of licensing essential IPRs for the LTE standard. Audiences can expect to see the same licensing challenges that first appeared in GSM (2G) and which re-appeared in UMTS (3G) starring again in LTE (4G).2 The plot is essentially the same: lots of essential patents and many different patent holders. The LTE sequel begins in much the same way as UMTS did—with an announcement of an industry initiative on the matter of essential IPRs. In LTE this scene took place in April 2008 where a group of leading telecommunication companies committed themselves to a framework for “establishing predictable and more transparent maximum aggregate costs for licensing [patents] that relate to 3GPP Long Term Evolution and Service Architecture Evolution (LTE/SAE) standards.” In particular, these companies stated “support” for “a reasonable maximum aggregate royalty for LTE essential IPR in handsets is a single-digit percentage of the sales price.”
    PDF, 122.43 KB
  • Technology Royalty Rates In SEC Filings
  • Thomas R. Varner
    Previous studies of technology license agreements have been limited either to analyzing relatively small sets of agreements or to analyzing a mix of complete agreements and general descriptions of agreements from a variety of sources. This study is unique in that it considers a large number of complete, publicly available agreements from one source, agreements submitted to the U.S. Securities & Exchange Commission (SEC) from 1994 to 2009. The dataset used for this study is also unique in that it contains a large number of royalty-based agreements previously granted Confidential Treatment by the SEC and obtained in unredacted form under the Freedom of Information Act.
    PDF, 125.87 KB
  • When To Deal: Implications Of A Model For Optimal Timing
  • Gautam Aggarwal, Christopher Apolito and Ben Bonifant
    When licensing a pharmaceutical technology, there is no clear consensus on the best time to do the deal. With varying stakeholder interests and numerous factors to consider, the task of finding the optimal time to out-license a pharmaceutical technology is far from straightforward. To gather opinions on what stage of development is perceived as best for completing a licensing transaction, Campbell Alliance conducted a deal-making intentions survey of nearly one hundred licensing professionals in the pharmaceutical industry. Study results demonstrated variations between what in- and out-licensors stated was the ideal timing for a deal and when the historical record demonstrated the deals were actually getting done.
    PDF, 138.10 KB
  • Use Of Small Business Innovation (SBIR) Program In Support Of Technology Transfer
  • Clara Asmail
    The National Institute of Standards and Technology (NIST) has pioneered a new methodology for U.S. small businesses to spin-out commercially-viable technologies emerging from NIST’s focused research. Using its Small Business Innovation Research (SBIR) Program funds, NIST incentivizes small U.S. companies to create financially rewarding innovations by researching and developing NIST-originated technologies with the goal of transitioning NIST intramural research into the market. The goal of transitioning research to the commercial market is also the goal of federal technology transfer programs. The use of SBIR funds to achieve federal technology transfer is a novel systematic approach to merging these two complementary infrastructures in order to leverage the advantages of each program for synergistic growth.
    PDF, 121.89 KB
  • Mitigating Risks Of Patent Licensing After Forest Group vs Bon Tool Co
  • Keith R. Derrington and Jeffrey S. Whittle
    Whoever marks an article with a false patent number shall be fined “not more than $500” for every offense. The Federal Circuit redefined “an offense” in its Forest Group opinion to mean every time something is marked with a false patent number. Because the potential liability for false marking has been significantly expanded, both licensees and licensors should now implement proper product marking procedures so that appropriate patent numbers are identified on products and services. Moreover, the probability of false marking allegations can be reduced by assigning marking responsibilities, warranties, and indemnification in licensing agreements.
    PDF, 119.06 KB
  • Recent Trends And Developments in Italian Patent Law
  • Giulio Enrico Sironi
    Over the last few years a series of new laws have been introduced relating to the IP sector and specifically the patent sector. These laws have the dual purpose of strengthening measures to protect IP rights and ensuring that IP disputes are handled by Courts which are actually competent, in the sense that they have a specialist knowledge of the matter. The first of these laws was Legislative Decree 27 June 2003, no. 168, whereby Specialized Divisions exclusively competent for all IP cases were set up at twelve Courts and twelve Courts of Appeal. Since 2003, therefore, all patent disputes have been brought before these Divisions composed of judges who have, as the law provides, “specific skills” in the area. However, even before the institution of these Divisions, a de facto specialization had developed at the Courts of the cities in which IP cases were frequently held (Milan, Rome, Turin, Venice, Bologna and Naples), in the sense that it was common practice to always assign such cases to a certain division, the judges of which had—or, at any rate, had acquired over time through working in that division— a good level of knowledge of the matter. However, this was a situation in which specialization was the result of a common practice and in which, above all, the possibility that the case would be handled by a specialist judge depended on whether or not the case could be brought before a certain Court, according to the normal rules of competence laid down in the Code of Civil Procedure (CCP). If, on the contrary, for reasons of competence, a case had to be brought before another court, a particularly complex patent dispute involving substantial sums could be decided by judges who had never before in their careers dealt with such an issue. In addition to eliminating this kind of risk, concentrating patent cases before the twelve Courts and Courts of Appeal (the concentration is, in fact, even greater given that the majority of patent cases are held before the Specialized Divisions of the Courts of the six above-mentioned cities), has led to a series of other advantages.
    PDF, 121.47 KB
  • Monsanto Soy Bean Patent Cases - A Paradigm Shift Gathering In Case The ECJ Takes Over Patent Jurisdiction
  • Jlrich Storzu and Aloys Huettermann
    Recently, two patent disputes have attracted public interest not only due to the fact that Monsanto, one of the favourite evildoers of the anti-patent movement, was involved, but also because different jurisdictions in Europe, namely the Advocate General of the European Court of Justice (ECJ) and the UK High Court, have appraised the cases differently, although with similar outcome. The following article gives a short overview of the dilemma, and the paradigm shift which could arise should the opinion of the Advocate General prevail.
    PDF, 97.59 KB
  • Does Upfront Payment Reduce Running Royalty Rate? Theoretical Perspectives And Empirical Analysis
  • Jiaqing “Jack” Lu
    Running Royalty Rate and Upfront Payment: Theory and Reality This study continues the empirical approach of royalty rate study as set in a series of papers I authored or coauthored in recent years. In these previous studies, the research efforts were concentrated on the fundamental story of royalty rate determination, investigating the economic role played by major factors such as profitability, industry performance, and market structure. The focus of this paper is shifted to the structural side of licensing transaction and royalty payment, and devoted to one of the important structural issues, i.e., the interaction between upfront payment and running royalty rate. While the combination of upfront payment and running rate is one of the frequently-adopted payment methods, there is little research on the interaction between the two.
    PDF, 133.89 KB
  • LPO And The Great Recession
  • Alok Aggarwal
    Saragota, California, April 2010: The economic recession (the Great Recession) of 2008 and 2009 resulted in a sharp drop in international trade, impacting the entire global economy. Recent studies by BTI Consulting Group and Hildebrandt-Citi Private Bank reported that 2008 and 2009 were among the worst years for the legal market in the United States during the last 50 years with billable rates and realized rates dropping by almost 10 percent (after including inflation). On the other side of the Atlantic Ocean too, the Great Recession took its toll; the Clementi proposals in the United Kingdom are further expected to change the way the law firms operate, forcing them to become more efficient and competitive.
    PDF, 116.48 KB
  • Recommended Resources for Licensing Professionals
  • John T. Ramsay, Q.C.
    The Recommended Resources Subcommittee of the Licensing Executives Society (USA and Canada), Inc., Education Committee has completed this list of resources (books and articles) that they as business and legal practitioners with extensive experience in developing, managing, protecting and commercialization intellectual property have found useful. They offer this list of resources as guidance to others. Some years ago, the LES Foundation published a list of resources that is still in circulation and some of our subcommittee members participated in its preparation. It is time to update it and to add commentary as well as guidance as to the intended audience. Inevitably, good resources, not included, should be included. This resource list is somewhat U.S./Canadacentric and hopefully in time will be expanded to include resources from other countries; perhaps a LESI committee may do this in the future.
    PDF, 124.58 KB
les Nouvelles