Corporate Counsel - Sample Issue

CC: You’ve warned that operating companies are getting into increasingly entangled relationships with patent assertion entities. Are you talking about privateering relationships, and why are those necessarily bad or dangerous?

M Y: I’m not just talking about privateering in the simplest sense, when an operating company would assign its patents over to a nonpracticing entity and the NPE would assert them. It’s gotten actually more complicated than that.

We have such a dynamic global economy right now. Every year you see companies that are doing great, and you see huge integrated companies that are no longer as high as they used to be. So you have increasing amounts of pressure on these operating companies to monetize their patent assets because in some cases they’ve spent hundreds of millions of dollars prosecuting them.

What we’ve seen more and more is
divestitures of patents from these oper-
ating companies, but not in ways that
are readily apparent. Our research team,
which has crawled through the public
data, the public filings, as well as matched
it up with our proprietary data, is able to
get a better picture of what’s happening.

This morning I was just looking at some of that data. And there’s an operating company that used to sell lots and lots of product but their revenues have declined in recent years. They have an enormous patent portfolio. Over the past few years they’ve assigned over 2,700 patents to a couple of dozen NPEs, and those NPEs have asserted 55 of them in nine litigation campaigns.

You might know if you were sued in one
of those campaigns that ultimately this pat-
ent originated from X company. But ulti-
mately I think there’s very few [who know]
the enormous impact of this one company
from how much they’ve divested. So I
think the more we can shine a light on it,
the more beneficial it will be to the indus-
try so that companies can focus on innovat-
ing and not just litigating by proxy.

CC: A lot of people credit RPX and other aggregators with dialing down risks in the patent arena, along with patent reform legislation and recent U.S. Supreme Court decisions. What is RPX’s pitch to clients in this less volatile era?

M Y: We’ve spent the past 10 years trying to
reduce the risk from patents, and trying to
make patent risk more predictable. We’ve
made significant progress toward that goal.
But in some ways we’re still just beginning.
It took so much time and effort—you
know, almost a decade, right?—to shift
the behaviors and the mindsets of an
entire industry to look at this patent prob-
lem differently and to act differently than
before. And so now that it’s working, now
that we have the data, we have this plat-
form that never existed before, we have
the ability to do things more efficiently.
So in many ways we’ve only just begun.
ip insider

AS ADOPTION OF FINANCIAL TECHNOLOGY takes off, so do related patent filings.

An analysis from London law firm EMW shows a drastic spike in global patent filings related to financial technology in 2016 compared to 2015. Last year, the number of fintech filings totaled 9,545—500 more applications than the year prior.

The number of fintech patent filings was up by 49 percent from five years earlier in 2011, when there were 6,399 filings, according to EMW’s research sourced from the World Intellectual Property Organization.

“The surge in patents reflects both the proliferation of startups bringing new technology and products to market over the last few years, as well as investment by more traditional financial services firms in an effort to remain relevant and retain market share,” Felix Dodd, senior solicitor for EMW, said in a blog post discussing the firm’s findings.

One area for financial technology
patents, EMW found, is artificial intelli-
gence, specifically ideas that enable users
to highlight risks in real time by pick-
ing up suspicious or abnormal activities
through predictive models. EMW’s other
examples of financial technology applica-
tions were for tools providing services for
cryptocurrency or other digital currency,
including bitcoin trading platforms and
bitcoin storage services, as well as new
methods for managing e-money and digi-
tal wallets.

According to U.K. news website City A.M., the United States filed the most fintech patents with 4,523 last year. This was twice as many filings as China, the country with the second highest number of patents in this area. Korea had the next highest number of filings.

In January, IPWatchdog published an article indicating that Visa Inc. and Mastercard hold the most financial technology patented inventions, Visa with 327 and Mastercard with 308.