les Nouvelles -March 2021

Join LESI in its les Nouvelles LIVE online event to hear the “making-of” stories from the authors of articles included in the March 2021 edition.  Articles address timely issues important to your practice.

Watch the short session highlighting what you’ll find in this month’s edition!

  • les Nouvelles - March 2021- Full Issue
  • PDF, 3.88 MB
  • Cost Of Capital Calculations In Intellectual Property Valuation, Damages, And Transfer Price Analyses Disputes
  • Connor J. Thurman and Robert F. Reilly
    Intellectual property owner/operators often retain forensic accountants, financial advisors, industry consultants, licensing specialists, economists, and other professionals (collectively referred to herein as “analysts”) to perform valuation, damages, or transfer price analyses related to their intellectual property assets. These analysts may develop these various types of intellectual property analyses for transaction, financing, taxation, strategic planning, financial accounting, litigation, and other purposes. In matters not related to intellectual property disputes, these analysts often serve the owner/operators as consulting experts. In matters related to intellectual property disputes, these analysts often serve the owner/operators (and their legal counsel) as testifying experts.
    PDF, 196.00 KB
  • Survey Of Mobile Cellular 5G Essentiality Rate
  • David Cooper, Johanna Dwyer and Alexander Haimovich
    This paper summarizes the results and methodology of a 5G essentiality survey that estimates the total number of patent families (excluding Ericsson, which funded this study) that have a patent with at least one claim that is essential to the 5G consumer mobile smartphone as of January 2020. In total, 200 randomly selected patent families were reviewed, with 8.0 percent found to contain at least one claim likely essential to a 5G NR smartphone. Applying this essentiality rate to the declared 5G patents from which the 200 patent families were selected results in a total estimate of approximately 746 patent families likely essential to a 5G NR smartphone (excluding those owned by Ericsson). We understand that Ericsson funded this study to estimate the total landscape outside of Ericsson. We further understand that Ericsson prepared claim charts for its own patent families evidencing essentiality to a 5G NR smartphone. We estimate Ericsson’s share of patent families likely essential to a 5G NR smartphone using the number of claim charts prepared by Ericsson and the results of this survey.
    PDF, 282.38 KB
  • China Amends The Patent Law: A Stronger Protection Is On The Way
  • Chuanhong Long
    On October 17, 2020, China’s top legislature, Standing Committee of the National People’s Congress (SCNPC), adopted the 4th Amendment of the China Patent Law on October 17, 2020 and the Amendment shall become effective as of June 1, 2021. The Amendment includes some important measures to strengthen the patent protection in China, e.g., introducing 1-5 times punitive damages for willful infringement where the situation is serious, increasing the amount of statutory damages, ordering the defendant to provide evidence that can prove the damages, protecting partial design, extending the patent term of design from 10 years to 15 years, providing patent term extension for new drugs, establishing patent linkage, etc.
    PDF, 132.56 KB
  • Intellectual Property Valuation Within A Bankruptcy Context - Part Three
  • Robert F. Reilly
    Licensing professionals and related professionals (hereinafter “analysts”) are often asked to conduct intellectual property valuations (or damages analyses or transfer price analysis) as part of a bankruptcy-related controversy. Part one of this three-part discussion considered all of the components—often called the elements—of such a valuation assignment. As a best practice, these assignment components should be agreed to (preferably in writing) by the analyst, the bankruptcy party-in-interest, and the party’s legal counsel (“counsel”). Part two of this discussion explained the generally accepted valuation approaches that analysts consider in conducting the bankruptcy-related intellectual property valuation analysis. That part of the discussion also presented illustrative examples of the application of each of the three generally accepted intellectual property valuation approaches. This third and final part of the discussion describes the analyst’s valuation synthesis and conclusion process. This discussion also summarizes best practices related to the development of an intellectual property valuation report outline in a bankruptcy context.
    PDF, 73.60 KB
  • IP For Investors: From Spin-Off To Stock-Exchange
  • Christian Hackl and Thomas Bereuter
    IP proved vital for the university spin-off Marinomed for its successful flotation on the Vienna Stock Exchange. In 14 years, the Austrian biopharmaceutical company Marinomed Biotech AG2 has evolved from a spin-off from the Veterinary University of Vienna to a public company, raising €22 million through an initial public offering (IPO) in February 2019. Since then, its shares have performed positively, remaining consistently above the issue price. Marinomed has successfully developed two technology platforms based on natural compounds. By building on them both, the company develops different products for over-the-counter (OTC) drugs for ailments such as colds, coughs and allergies. It is a traditionally large segment of the pharmaceutical market and is growing at around five percent (5 percent) a year. As studies have indicated that Marinomed’s Carragelose has an antiviral effect against coronavirus, initial targets for the market have grown. Right from the beginning, Marinomed emphasized strong patent protection for its technologies, enhanced by trademarks for its main product lines. Using tailored business models, Marinomed caters to various markets worldwide in co-operation with dedicated partners.
    PDF, 107.43 KB
  • Fast Market Pricing Of Patents: Pricing “Uncomparables” Using Comparables
  • Kent Richardson and Michael Costa
    “Patents are unique! You can’t get a market price for them because they are ‘uncomparable (sic)’!” “The average price of a patent is the worst thing that has ever happened to patents.” “The model can never be accurate enough.” These are all things that we have heard about why it is impossible or horrible to attempt to find a market price for patents. Ultimately, we disagree. Within a set of reasonable constraints, you can arrive at a reasonable market price for patents.
    PDF, 164.43 KB
  • As Open As Possible, As Closed As Needed: Challenges Of The EU Strategy For Data
  • Ginevra Bruzzone and Koenraad Debackere
    1. The 2020 Package on Shaping Europe’s Digital Future On February 19th, 2020, a few days before the outbreak of COVID-19, the European Commission published a package of four documents on the digital transformation in the EU: a general communication on shaping Europe’s digital future,1 a European strategy for data,2 a white paper on artificial intelligence (AI)3 and a report on the safety of products and liability in the era of AI, Internet of Things and robotics.4 This package was the first set of measures adopted by the new Commission in order to pursue one of the six priorities of the political program of President von der Leyen for 2019-2024, i.e., ensure that the EU is fit for the digital age. Therefore, the general approach and the specific contents of the digital package deserve careful consideration from a public policy perspective, although many initiatives were merely outlined in broad terms.
    PDF, 164.65 KB
  • Licensing Structures And Compliance In An Evolving IP Landscape
  • Todd Sigler, Ozer Teitelbaum and Keith Walker
    As we discussed during the roundtable in the 2020 LES Annual Conference,1 there are various different types of licensing structures available to licensors, each having their own unique set of pros and cons. However, over the past two decades, licensing has seen a gradual transition from the traditional running royalty-based agreements to various, more predictable financial solutions, including fixed annuity fee structures and one time, lump-sum payments. This business transition was accelerated by the adoption of the accounting rule ASC 606, which defines when and how royalties should be recognized. While this transition is by no means complete, the increased commonality of predicable financial solutions mentioned above has made licensing negotiations more nuanced, introducing variables previously not considered. Depending on the type of deal structure agreed upon, these new variables should be considered and explored in preparation for deal making, as well as at the negotiating table—be it real or virtual.
    PDF, 105.71 KB
  • The Indomitable Biotech IPO Window— What’s Keeping It Open?
  • Mark G. Edwards
    There’s a longstanding adage in the biopharma industry that biotech initial public offering (IPO) windows creak open but slam shut. After seven years of capital markets being receptive to biotech public financings, one might have predicted that the industry’s IPO window would be a casualty of the Covid-19 pandemic. Way wrong! As shown in Figures 1 & 2, the 53 biotech IPOs on US exchanges year-to-date (YTD) have just surpassed all of 2019 in quantity, and have roughly doubled the aggregate amount raised last year. Even more impressive is that the median IPO proceeds of $178M per IPO are more than double the highest level seen in prior years (Figure 3 on page 56), and the median post-IPO market capitalization of $658M per biotech is 50+ percent higher than previously seen (Figure 4 on page 57).
    PDF, 295.48 KB
  • International Technology Transfer To Promote Access And Innovation In Times Of Global Crisis
  • Carolina I. Sepúlveda and Jessica A. Ocampos
    The COVID-19 pandemic as a global challenge has demanded the attention of governments around the world, and questions have been raised about technology transfer and global access to essential products to address the crisis, especially for countries with limited research and development capabilities and resources to develop their own healthcare solutions.
    PDF, 107.62 KB
  • Standard Essential Patent Licensing Antitrust And Patent Law: Crossroad Or Intersection?
  • Roberto Dini, Garrard Beeney, Dina Kallay and John Paul
    Standard development organizations that develop technical standards like Wi-Fi, Bluetooth, and MP3 often require patent owners to indicate whether they will grant licenses to implementers on fair, reasonable, and non-discriminatory terms. In recent years, courts have issued conflicting decisions on the rights and responsibilities of patent owners and technology implementers in negotiating licenses under standard essential patents (SEPs) and what it means to grant a license that is fair, reasonable, and non-discriminatory ( i.e., a “FRAND” license). One underlying aspect of these conflicting court decisions is whether patent law and antitrust/competition law conflict with each other, or whether these laws are aligned and complement each other.
    PDF, 112.15 KB
  • Killed In The Art? How Artificial Intelligence Challenges The Fictional Concept Of The Skilled Person In Patent Law
  • Benjamin Rätz, LL.M. and Dr. Jonas Block
    The legal fiction of the “person skilled in the art” is at the core of patent law. It impacts both a patent’s validity and its scope of protection as determined in infringement proceedings. The advent of Artificial Intelligence (“AI”) technology challenges the legal fiction, handing the “person skilled in the art” a powerful tool to process the world’s information with unprecedented breadth and speed. This article explores the effects of AI on the skilled person fiction, mapping out the potential points of friction in future patent validity and infringement litigation.
    PDF, 180.49 KB
  • Same Questions, Different Perspectives—A Frenemy Dialogue On Patent Litigation Strategy
  • Eszter Szakács and Alexander Haertel
    When a company is asserting IP, e.g., a patent, they are following a strategy that suits their position not only as plaintiff but also the specific market and their commercial goals. The defendant must in some parts adapt to that strategy but also has the opportunity to influence the course of the proceedings in great detail. A carefully devised patent litigation strategy can put crucial cards in the hands of both the plaintiff and the defendant. Especially in the preparation of the dispute. In this next dialogue an imaginary patentee and a potential defendant will this one time give the game away and discuss strategic possibilities and positions related to patent litigation.
    PDF, 114.41 KB
  • FRAND For All, Or Just Some?
  • David Holt
    Following the Supreme Court’s affirmation of the decision in the Court of Appeal in Unwired Planet v. Huawei,1 it is clear that where the UK Courts are seized with an action of this type, they have the discretion and the power to determine the terms of a global license that they consider to be “fair, reasonable and non-discriminatory” (“FRAND”). Debate continues as to the likely longer term effects of the Unwired Planet decision and the effect it will have on both Standard Essential Patent (“SEP”) holders and those using technology covered by SEPs, particularly in relation to whether the balance of power has shifted in favor of SEP holders or users of such technology in light of this decision.
    PDF, 126.24 KB
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