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SPEAKER : JIMMY VESTBIRK
let’s [email protected] @JimmyVestbirk
Complexities in product / service development
Understanding the risks and opportunities with intellectual
property
SPEAKER: GRAHAM BELL
“Things” that I’ve been involved with…
What CUBICIBUC does…
• Clients tell us that they don’t want launch products with outstanding risks associated
with the IP.
• At Cubicibuc we believe that it is impossible to develop modern, complex
products without infringing IP.
What CUBICIBUC does…
• We provide services that allow our clients to understand who owns that IP; what the
owners might do with it; and how our clients can manage those risks.
Today’s product world is a complex place
• “In 1899 George B. Selden was awarded a patent for the automobile - it was a single patent”
Today, it is impossible to develop modern, complex products without infringing IP. The key challenge is to understand who owns that IP and what they will do with it when your product is successful.
The spectrum of possible approaches to intellectual propertyNaïve Avoidance
Naively ignoring the facts, not making suitable provisions. Lacks of planning means no leverage.
Information Overload
Unnecessarily trying to “know” everything inevitably leads to decisions paralysis.Too much info means no prioritisation.
Finding a middle ground
A pragmatic approach to managing IP risksInformation overload
Unnecessarily trying to “know” everything inevitably leads to decisions paralysis.Too much info means no prioritisation.
Naïve avoidance
Naively ignoring the facts, not making suitable provisions.Lacks of planning means no leverage.
Finding a middle ground
A pragmatic approach to managing IP risks
Finding a middle ground
Where is the magic sauce?
All businesses apply intellectual assets as the foundation of how they add value. Understanding where, how and by whom the value creation is done means that the associated IP can be identified and protected.
While avoiding third party IP is impossible managing your own position to understand where in your value chain the “magic happens” is vital.
IP portfolios should be dynamic and your IP strategy closely match your product strategy
– Maintaining portfolios is increasingly costly – organisations continually look to reduce these costs, and extract value from IP
– In parallel, IP is not static. Just as product portfolios move on, technology evolves, so must IP portfolios. IP portfolios must adapt to current company drivers
– Managing an IP portfolio is therefore an active responsibility with associated costs and revenues to be accounted for.
New IP needs
Old / unused IP
Old / unused IP
New IP needs
v1v2
v3v4
v5
v6v7
Roadmap
A pragmatic approach to managing IP risks
Finding a middle ground
“Semantic text analysis” may identify the appropriate technology clusters
A starting point to landscaping is often identifying what technology is key, and how to identify / describe it.
Main
Tech areas of additional interest
Clustering tech areas into more granular subsetsInternational Patent Classification (IPC) based clustering of the portfolio in combination with the semantic provides a tighter list of relevant patents.
• G06F 003 – I/O Interface Arrangements
• G09G005 – Control for Visual Indicators
• G06K009 – Recognition of patterns
• G06T007 – Image Data Processing
• G06F017 – Digital Computing
Citation analysis of patents gives us insight into where the portfolio sits relative to the IP assets owned by third parties
Understanding the relationship between third party portfolios helps pinpoint potential key players with seminal patents.
Technology trend analysis would be useful to identify the key tech area among several areas for a given assignee/competitor
Simple analysis shows which third parties have the strong portfoliosHaving a view of the ownership landscape assists in preparing engagements with these entities – prioritisation, identifying leverage for negotiations or partnering opportunities.
A pragmatic approach to managing IP risks
Finding a middle ground
Competitive reaction
Understanding who owns the IP that you might be using allows you to prepare for potential responses to your market success.
The IP landscape gives you valuable business intelligence to spot trends, to identify weaknesses and to build IP ahead of product roadmaps – maximising the value from your R&D.
Imm
edia
te R
eacti
on
Considered Reaction
Blocking / Attacking
Capability build / catch-up
A pragmatic approach to managing IP risks
Finding a middle ground
Thinking about the value of your IP
– Do we really care if others use your invention? If they did, would it impact your business?
– How likely is it that others will use your invention?
– Would having a patent deter others from practicing the invention?
Thinking about the value of your IP
– What appetite do you have to enforce the patent? How policable is the invention?
– What is the plan for utilising the invention? What are your own plans for exploitation?
•Note: Only point 5 is introspective, but is historically the only question firms have asked.
Having no concept of value exposes the business to lost opportunities where IP could have contributed.
Placing a value on your IP allows you to use it as leverage in commercial negotiations with suppliers and customers.
Align IP strategy with business strategy to maximise
Understand how your IP can help succeed in controlling, managing or influencing relationships with suppliers, customers, competition in various sectors and markets.
Align IP strategy with business strategy to maximise
Market Sector Relationship
Control
Manage
Influence
A pragmatic approach to managing IP risks
Finding a middle ground
Driving R&D activity to generate patents for widest possible adoption
R&D effort must be directed towards continually generating new IP to follow evolving technologies. However this can be expensive, and with complex products no one company can be expert in all necessary areasPrioritising R&D can be done directly or through research projects or consortia or by being involved in standards setting activities
Driving R&D activity to generate patents for widest possible adoption
But working with standards committees takes a lot of time and effort, and is expensiveDeveloping IP through R&D effort can be difficult. Increasing your patent portfolio through acquisition is an alternative option. IP may be acquired:
• from existing owners• through acquisition of entire companies
Questions the Board should be able to articulate answers to their shareholders about their IP & IP strategy
Disclaimer and Notice:
The information in this document is provided in confidence for the sole purpose of supporting the independent evaluation of the enclosed information relating to Cubicibuc Limited and related services.
No assurances, representations or warranties pertaining to the enclosed information or its validity are provided or implied herein, and the information in this document is not legal advice, analysis or a legal opinion. This document is solely attributable to Cubicibuc Limited and does not necessarily represent the views or opinions of other third parties.
This document and any other materials or information provided by Cubicibuc Limited are copyrighted, and are intended for use by the receiving party solely. Any distribution of such materials or information outside of the receiving party’s organisation without Cubicibuc Limited permission is strictly prohibited.
Current Legal Issues for Technology Companies
SPEAKER: AMARDEEP DHILLON
Recent Case Law
• Ultrasoft Technologies Ltd v Hubcreate Ltd
• [2016] E.W.H.C. 544 (IPEC)
• Concerned software for management of serviced office space
• Hubcreate and Ultrasoft are direct
competitors for this software
Ultrasoft v Hubcreate
• A customer moved from Hubcreate to Ultrasoft and then back to Hubcreate
• In returning to Hubcreate, the customer asked them to extract all of the accounts information, contacts, licence agreement and invoices from the existing Ultrasoft files and integrate them into the Hubcreate software.
• To do so, the customer provided Hubcreate with a copy of the SQL database files
Ultrasoft v Hubcreate
• Hubcreate then extracted the specific ‘UltraCRM/UltraBis’ files which should have contained this data, and copied them onto the Hubcreate SQL server
• Hubcreate were unable to access this data,
but were able to do so at a later date (after several failed attempts) when updated SQL files were provided.
The legal ramifications
• Hubcreate legally liable, by copying and utilising the extracted SQL data files, for:– Copyright infringement– Infringement of the Database regulations
• However, Ultrasoft also alleged further infringement, by alleging infringements as the data files were made available to the public
• This latter allegation failed as no member of the public could access the SQL server upon which the data was stored
Learning/Discussion points
• Early admissions save legal costs
• Some companies may set up a ‘damages fund’ before undertaking infringing acts, i.e. essentially plan for a claim in the future (and then quickly settle any claim)
• Possibly risky strategy as damages claim may be open-ended
Learning/Discussion points
• What routes could minimise risk, if about to undertake infringing acts?
• Identifying risk with customer (important, reinforces your reputation within market)
• Seek indemnity from customer?
• Ask customer to obtain suitable licence from competitor?
Learning/Discussion points
• Alternatively, although not in all circumstances, seek dialogue with owner of software
• Obviously dependant upon respective market sizes and reputations (ie direct competitors unlikely to agree to you working on their software)
• Might discover new markets for your technology
Risks in Litigation
• Not having a clear strategy at the start of the litigation, whether bringing or defending a claim
• Possible example see Nekoti Ltd v Univilla Ltd [2016] E.W.H.C. 556 (Ch)
• Not conceeding those points that should be conceded (i.e. early admissions vital to save costs)
Risks in Litigation
• Considering which Court to litigate in:
– IPEC: Costs recovery limited to £50,000, but damages limited to £500,000
– High Court: Damages unlimited, but no upper limit of payment of legal costs
Overall
• Companies need to have Intellectual Property Strategies in place, to cover both collaboration and litigation
• If protecting Intellectual Property rights by way of patents, then correct formulation of the claims is key to ensuring protection
• If litigating, having an early idea of the strategy should allow for decrease in overall costs of litigating
REDUCING THE FINANCIAL RISK IN INTELLECTUAL PROPERTY LITIGATION
SPEAKER: TIM MAYERTHERIUM CAPITAL
MANAGEMENT LIMITED
Funding vs. insurance
Success fees vs premiums
Recoverability of either (or none)
BASICS
Market capacity, rating
Cost/pricing (general)
If the claim fails, then what?
a ‘third way’: funder’s adverse costs indemnity
BASICS
‘Vanilla’ funding
Portfoliosoclient ‘books’o lawyer ‘books’oprofit sharesore-cyclingodue diligenceopricing
FUNDING MODELS I
FUNDING MODELS II
Monetization of claims
o sale/assignment
o potential risks (champerty)
o ameliorations: SPV with equ interests (management etc)
FUNDING MODELS II
o awards; enforcement; a combination
o sale at a discount (Elliot model) vs. more light-touch approach to suit client’s cash needs.
Funding and IP
56
Pitfalls:
o prior art
o Originality
o how test (due diligence)?
Funding and IP
57
o beware patent trolls
o class actions – certification; opt ins/opt outs; jurisdictions
•Funder flexibility via indemnities, portfolios
REDUCING THE FINANCIAL RISK IN INTELLECTUAL PROPERTY LITIGATION
Funding vs. insurance
Success fees vs premiums
Recoverability of either (or none)
BASICS
Market capacity, rating
Cost/pricing (general)
If the claim fails, then what?
a ‘third way’: funder’s adverse costs indemnity
BASICS
‘Vanilla’ funding
Portfoliosoclient ‘books’o lawyer ‘books’oprofit sharesore-cyclingodue diligenceopricing
FUNDING MODELS I
FUNDING MODELS II
Monetization of claims
o sale/assignment
o potential risks (champerty)
o ameliorations: SPV with equ interests (management etc)
FUNDING MODELS II
o awards; enforcement; a combination
o sale at a discount (Elliot model) vs. more light-touch approach to suit client’s cash needs.
Funding and IP
64
Pitfalls:
o prior art
o Originality
o how test (due diligence)?
Funding and IP
65
o beware patent trolls
o class actions – certification; opt ins/opt outs; jurisdictions
•Funder flexibility via indemnities, portfolios