Human beings are hardwired to assess risk and return. Whether driving faster to avoid being late for a meeting or demanding more equity to invest in a deal, we constantly consider the tradeoffs between risk and what we stand to gain by accepting that risk.

This is the second part of a two-part paper. In Part 1, key concepts related to risk, return, income-based valuation, and the cost of capital and returns on assets were explored. Part 1 concluded with Section VI which considered how differing types of IP monetization approaches can affect the selection of an appropriate discount or capitalization rate. Part 2 continues below.

The WIPO Arbitration and Mediation Center, established in 1994, offers alternative dispute resolution services for international commercial disputes involving intellectual property. The WIPO Center has published model submission agreements for the arbitration of disputes involving commitments to license patents under “fair, reasonable and non-discriminatory” (FRAND) terms. These model submission agreements provide for flexible arbitral procedures based on the standard WIPO arbitration rules, but surprisingly refrain from setting out rules and procedures specifically tailored for FRAND disputes. This preference for flexibility over tailored rules can be explained as resulting from tensions inherent to the standard setting process and the choices adjudicants have between different arbitral forums.

Academic Technology Transfer Offices (TTOs) are tasked with protecting and commercializing the scientific and technological developments discovered at university and research institutions. Besides pushing a technology forward, there are other metrics through which TTOs are measured. This article will focus on one such metric— licensing revenue. We have gathered a database of deals over a 10-year period across three institutions and have analyzed what deal terms produced revenue and when. The most surprising result of this exercise is that sublicensing revenue was the 2nd largest source of value. It is our hope that this analysis will help readers better understand where potential value lies within licensing terms and what terms to prioritize during negotiations.

At first blush, a world where parts and products are 3D printed at home or on the factory floor may seem like a potential IP licensing bonanza. In reality, 3D printing may create some IP licensing opportunities and destroy others.

On October 6, 2014, David R. Jarczyk, David Drews, and Dwight Olson presented a study of trends in the pharmaceutical, semiconductor, chemical, telecommunication and consumer product industries at the LES USA & Canada Annual Meeting entitled, LESI IP Valuation Committee Study on Royalty Rates & Deal Structures. This study is intended to supplement the LES Surveys and the authors urge you to review this excellent work, accessible via the LES website. The following article is a summary of the presentation.

When Swiss researchers invented a method for using ultrasonic energy to infuse thermoplastics into wood and other porous materials, they found themselves in a challenging business position. The technology created a near-instant, very stable bond that could be used to attach hardware or fuse pieces of an assembly without utilizing adhesives or fasteners. It was an intriguing technology, but it had no clear place in the market.

Techniques for valuing intellectual property continue to develop, especially as access to information becomes easier and more efficient. The practice of valuing intellectual property has only been around for the past few decades, during which time the practice itself has grown and refined.

In the 1970s, the Supreme Court identified a loophole in the patent statute, whereby one could manufacture in the United States components of an infringing product and export those components for assembly and use of the infringing product outside of the United States. In response, Congress enacted 35 U.S.C. § 271(f)(1), which permits a finding of infringement where a party (1) supplies from the United States all or a substantial portion of the components of a patented invention and (2) actively induces the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States. The Federal Circuit recently held that the statute does not require active inducement of a third party—inducing one’s own foreign subsidiary qualifies. The Court also held that “a substantial portion of the components” does not require any specific number of components and could include just “a single important or essential component.”

As a result of the pharma sector inquiry opened in January 2008, the European Commission issued three decisions for “pay-for-delay” competition law violations in the pharmaceutical industry: the Lundbeck decision re Citalopram in June 2013, the Fentanyl decision in December 2013 and the Servier decision re Perindopril in July 2014. An investigation of Cephalon and Teva concerning Modafinil is still pending.