The Examiner in the US Patent Office clearly noted that an older AOL patent application US 2007/0174389 also described a method for collecting and distributing information related to recent content publication activity of an instant messaging (IM) user provides other users in a network with timely, relevant information about people known to the user or within the same social network. Facebook had to limit their patent claims (the legal base of the patent) to a method in which a link was provided to enable a user to participate in the same activity as the other user. This certainly isn’t the same as patenting a general news feed. It has to be said that the term seems to be extremely vaguely worded in the patent – and it will be up to a court to decide later what this broad general term actually means.

It’s true that the description is much more general – with a general overview on news fees. However, the description is not relevant to the ultimate protection that can be claimed by the patent applicant – only the claims are relevant.

The interesting thing will be to see how Facebook start using their IP portfolio in the future. Currently they have 33 pending applications published. Their competitors seem to be much less active. LinkedIn has a sole patent application pending in Europe and the United States. German rival Xing AG appear to have no patent applications pending. A more general search on the Questel database showed that there are currently 3079 patent families with the words social and network? in the claims, title or abstract. Facebook clearly only have a small proportion of the relevant IP since some of it is held by companies such as Microsoft (5.7% of all patent families) and Yahoo (4.4% of patent families). However, from the point of view of companies focussed in the social networking field Facebook is the clear leader since no other company comes close to the breadth of their patent portfolio. Not only have Facebook patented the “neat ideas” but their patent applications clearly indicate that a significant amount of thought has been given to patenting revenue-generating solutions, such as advertising. Coupled with their clear innovative tendencies, this suggests that Facebook could go a long way.

Technorati Tags:
Social Networking, Patent, Twitter, Facebook, LinkedIn, Xing

A view. To try to make this simple to understand.

To call Nathan or IV a troll is incredibly simplistic.

IV has built one of the Worlds most sophisticated businesses and it has the potential to have substantial direct and indirect returns for its shareholders. IVs people are amongst the brightest IP and business minds you could wish to find anywhere. And what they have done is combine lots of the smartest and newest ways of creating value from IP into the same entity in a patent and IP play on an absolutely massive scale.

 They are an invention house, and have adopted and reinvented leading edge patent strategies to create a portfolio of their own IP which, in its own, would be of high high worth.

 In combination they have acquired patents, hard to say how many as they are very private, but lots of patents on an unprecedented scale. Some say they have 30,000 patent families, but it is impossible to know exactly how many. What is believed though is that this number puts them in the Premier league (up there with IBM, Nokia, Qualcomm and others) in terms of IP influence. The buying has not come cheap but they’ve worked hard on starting with buying anything to moving to buying quality.

 And along the way they’ve worked hard on their IP reputation. Ask people who know anything and they’d say that if IV breathes in your direction, take a license. Perfect in the US world of IP where licenses are cheaper than litigation so companies like Acacia Research, a genuine troll, can prosper. But they don’t want to see seen to be litigators…that’s bad for reputation so they outsource that part to others who aren’t so bothered about what the outside world thinks of them.

 This is IP genius on a scale never seen before and which would be hard to come close to replicating again in a generation given what IV has successfully done. If you imagine or remember one of those days when the idea you had could change the world. Amazingly though almost nobody outside of the IP community and largely outside of the US has a clue that this is going on. Which it has been for 10 years.

The full impact of this is to be seen. What Nathan though appears to realise in his public statements is that all things intangible make up a large and unexplained part of shareholder value. The accountants don’t explain it, shareholders don’t ask about it, most business leaders don’t understand it. It still amazes me that people don’t even ask! IV is playing an arbitrage game; it knows what is valuable and it knows the value to it of what its buying. The sellers do not.

 This is grand and to be complimented. It will be hugely successful.

 Andrew

Second, we’ve also added Patentopolis to our partners section.  This is a pretty cool facilitated strategy game where you play head-to-head against other players with various IP rights.  They do a whole lot of customisation for the game to make it fit your business, and it’s a pretty fun way to spend an afternoon or a whole day learning about IP. This game is worth a post in itself, so I’ll not say too much more about it.

We’ve also got some speaking slots at conferences coming up:

• Global IP Exchange 14-16 March in Munich.
• Nordic IPR Forum 22-24 March in Stockholm.
• BVCA – Venture Foundation Course in London.
• IP Business Congress in Munich in June. Andrew is speaking as part of an SME panel on IP.

We’ll also be doing a new series of webinars with the European Venture Capital Association following on from our webinar last September on IP due diligence. Catch us at any of these events for a coffee or a chat.

The 1990 act stimulated the development of solar technology in Germany and one might have expected German companies to massively profit from the scheme. Indeed Q-Cells, based in Bitterfeld in the former East Germany, benefitted massively and has today become one of the leading suppliers of photvoltaic panels in 2008 (see the Wikipedia article for further information).

Another German company, SiC Processing was listed in the 1998 Guardian/Library House’s CleanTech 100 as one of top 10 companies (see here)

The interesting question for me was to look at the IP protection on the products. Clearly there may be a lot of processing knowledge that companies would chose to protect as trade secrets and not through patents. However, given that the panels can be found on many rooftops and also in do-it-yourself stores, one might expect many innovations to be the subject of patents.

Intriguingly, I was only able to identfy 19 families of published patent applications for Q-Cells. There may be more in the pipline, but that seems a small number for a companies whose balance sheet at the end of December 2008 showed intangible assets with a value of  EUR 48.4 Million

SiC Processing held a single patent – filed initially in Italy in 2005. This was more on recyling than on solar cells itself.

I thought it intriguing to see how this fits into the patent protection of other companies in this technical space. Using the most popular European Classifications from the Q-Cells portfolio, a worldwide search of patent applications showed Japanese companies (Canon, Sanyo, Sharp and Matsushita) dominating the photovoltaic landscape. The first European organisation was the German contract research organisation Fraunhofer Gesellschaft in fifth place. This correlates with the report in EE Times which identified the predominance of Asian companies in the space

The Japanese patent system encourages multiple applications by domestic applicants which tend to be combined when filed outside of Japan. It tends to overemphasise the contributions of Japanese companies when worldwide statistics are used. I therefore limited the search to only patents filed or pending in Europe and identified that Sanyo and Sharp still occupied top spots (first and second with respectively 49 and 47 out of a total 1590). Du Pont came in third place followed by Canonl in fourth pace and Sharp in fifth place. The Fraunhofer Gesellschaft had 26 patents or applications  in total and were in tenth place. Q-Cells only had seven patents or applications using this set of data (which is the most relevant for solar cell photovoltaic panels).

What conclusions can we draw from this? Intriguingly the Japanese companies are putting an increasing amount of research and development work into developing a substantial photovoltaic patent portfolio and clearly in terms of numbers are overtaking German companies in the European marketplace. However, the commercial activities of Japanese companies are much more limited. It is possible that much of the innovation taking place in Europe is on processing matters which is more appropriate to trade secret protection – as you do not want after all to let your competitors know how the silicon is being processed.

Technorati Tags:
Patent, Photovoltaic, Q-Cells

xkcd is CC-BY-NC by Randall Munroe and at http://xkcd.com/670/

• Korean companies beef up patent expertise as policy makers confront the NPE challenge – The government is even creating an anti-NPE fund ala RPX and other patent pools.
• Innovation Games – Games to kick start innovation at your company.
• IAM Magazine – IAM Blog – Getting deep inside the chief IP officer role – Innovation games — looks like I missed out on some fun at the IPBC this year, will be sure to be in Munich though!
• SCRIPTed December 2009 – New great issue out from SCRIPTed. Tangible IP readers may be interested in the TPMs article on the effectiveness of anti-circumvention measures under EU law.
• Obscure Patents: These are SO much better than software | IPWatchdog.com | Patents & Patent Law – More funny patents, including a reversible sweatshirt.
• Patent Sharks (Trolls?) – insightful or missing the point? (IP Think Tank Blog) – Worth reviewing again (both the article and these comments).
• Software, the viral business | Joren De Wachter – Interesting notes on the expansion of software companies alongside the expansion of software in more and more products.r

Gabór Lamm from EMBL’s technology transfer arm EMBL-EM has just given a fascinating lecture outlining technology transfer. EMBL’s first patent was filed in 1990 but it was not until 1996 that a formal policy on intellectual property was established. The specialised technology transfer unit was only set up 1999 to commercialise intellectual property coming out of EMBL’s main campus in Heidelberg, as well as its outstations in Grenoble, Hinxton and Hamburg. Since then EMBL has filed over 250 patents and patent applications, protected 71 copyrights, which includes database rights, and set up 12 companies. They currently have an annual revenue of EUR 4,5 Million which more than covers expenses.

One of the most interesting points that came out of the lecture was the motivation of the individual researchers to file patents. The financial reward is attractive (30% of revenue, excluding direct patent costs) but more importantly is the expectation from researchers from outside of Europe for a functioning IP management organisation. This seems to contrast – as one questioner pointed out later in another context – with the attitude of some European researchers that intellectual property rights somehow jeopardize academic freedom.

Gabór noted that part of the mission of EMBL is to transfer technology to improve human health. This requires commercial companies (and EMBL have over 250 licencees). There has in the past been criticism that only 56% of the licencees come from Europe (and 20% from EMBL’s host country, Germany). 33% of the licencees come from the United States.

Interestingly EMBL-EM “broke even” in 2004 at which point the net revenues exceeded the expenses. Gabór Lamm noted that this was helped by the IPO of Lion Bioscience (now Sgnis Pharma AG). However, the annual licensing revenue now exceeds patenting costs.

One of the things that struck me about Gabór Lamm’s presentation was the contined need to invest in technology transfer and train scientists and engineers of the benefits to themselves personally and how technology transfer actually contributes to society. Technology transfer cannot be seen to be “merely” a cost factor – but immediate financial benefits cannot be expected. It took five years for EMBL to obtain a net profit from technology transfer – or 14 from the date of the first patent – and that was helped by the opportunity to commercialise a database in a very favourable investment climate.

I wonder what a telco with 405m users would be worth? That is an awful lot of relationship capital to work with.

Phew. What a long long week. In fact October end to end has been hard work every step of the way. I’m not by any means saying that I’m pleased to see the back of it, but it’s been full of lots of ups and quite a few downs. I suppose though that I’ve learned through the years that in trying out something new the magic is to look for the upward trend, whilst treating the little downs as correction points to warn against getting ahead of yourself or becoming arrogant.

This week was full on closing out an investment round for one of our clients. We went from carrying out a relatively easy piece of diligence to managing an ownership issue, correcting old documents that did not reflect the parties’ original intentions. And, as usual with ownership issues, what looked relatively simple to fix took a little life all of its own, and close on two full weeks of work.

I spent some time on Monday with David Jones of Exponent IP chewing over the development of the IP market and how boutique organizations that share the same ethos (quality, professionalism, can do mentality, longevity) can help to grow the market by working together. I like David and Ben as they share these principles and are easy people to work with. This catalysing has become a bit of a theme for us at ipVA, particularly as we know that there are so many pretenders out there who talk without having gone out and done it.

This must be one of the challenges of a growing market, picking out the good from the bad. So I’ll end this week’s post as a call to fellow pioneers and to raise a theme that David and I talked about as one of the key steps in developing this market. That is speaking with a common language. We think that without this, it becomes very hard to communicate and understand even each other. Never mind to communicate with the 95% of the market who don’t get IP.

I was explaining to David that, in our view, the IP world fixates itself on those imposters of value, patents. Just because they are publicly viewable and every second advisory firm has a way of rating them, is this really an indicator of corporate value? Is it heck! If one understands where patents typically come from or rather don’t come from, it is bizarre to badge them as any indication of a corporate worth or surefire predictor of value.

We see all the time that the smartest engineers devalue their own ideas, patenting things that should be better maintained as trade secrets, and retaining as know how little implementation nuggets that would be great patents. We see investor pressure to file greater patent numbers driving a behaviour of filing everything whether good or bad. We see large corporates binging (thank you Craig Opperman) on filing huge patent numbers to help cross licensing discussions, whilst some cultures (France is good at this) spurn the system as creating fraudulent indications of the worth of inventions. In short, one cannot rely on the vagaries of human experience and behaviour towards patenting as giving a reliable result. Sorry IV, you will no doubt capture huge amounts of license revenues, but will you really carry the true debate forward? Will you crack the IP value code and start to explain what drives value in the best companies?

As an alternative, to work out the true comparative worth of companies, we need to work hard at obtaining this common language. And, for us at ipVA, this means following the accountants’ language. Intangibles is the word. This message in a bottle is to those out there who follow that same principle. Ignore the imposters that are patents as nothing more than one way that inventions can be properly protected. Not irrelevant, but just because they’re easy to see does not make them any more important that any other part of the intangibles tree. The accountants have actually given us a pretty good guide in the categories of IP assets able to be valued in IFRS3. Examples of intangible assets to be separately recognised and categorised within the purchase cost are set out in the regulations and include:

Marketing related – intangible assets are typically those assets associated with the market or promotion of a company’s products or services (trademarks, brands, trade names, trade dress, internet domain names, newspaper mastheads, non-compete agreements).

Customer related – intangible assets are assets, which are utilised in the development, procurement, management and maintenance of a company’s customers (customer lists, order or production backlog, customer contracts and related relationships, non-contractual customer relationships).

Artistic related – intangible assets relate to artistic products or services which are protected by a contractual or legal right, such as copyrights (plays, operas, ballet, books, magazines, newspapers, musical works, pictures, photographs, videos, films, television programmes).

Contract based – intangible assets represent the value of rights which arise from contractual arrangements (licensing, royalty and standstill agreements, contracts for advertising, construction, management, service or supply, lease agreements, construction permits, franchise agreements, operating and broadcasting rights, use rights such as drilling, water, air, mineral, timber cutting and route authorities, servicing contracts, employment contracts).

Technology based – intangible assets represent the value of technological innovation or advancements, and can be protected through legal or contractual rights (patented technology, computer software, unpatented technology, databases, trade secrets).

As comprehensive as could be….don’t you think? Does anyone want to join in the debate?

Don’t just think of someone alive today – hall of fame members include Sir Edward Coke and Thomas Edison, though only the live members get a vote (unlike the apocryphal story of Jeremy Bentham at the University of London):

Via the nomination process, anyone in the global IP community can put forward a name to be considered by the IP Hall of Fame Academy, comprising all living IP Hall of Fame inductees and specially invited international IP thought-leaders.

The deadline is 2 December, with the 2010 inductees announced in February 2010 with a gala dinner at next year’s IP Business Conference in June, in Munich.