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Clouding IP LLC: All filed in Deleware, “Technique for Enabling Remote Data Access and Manipulation from a Pervasive Device” also used to sue news companiesPersonalWeb:All in Eastern District Texas
Transcript of "Efrat ip up con 2012 presentation"
1. Intellectual Property Strategy: Challenges and Opportunities in the Cloud December 12, 2012Efrat Kasznik, Founder & PresidentForesight Valuation Group, LLC
About Me: Efrat Kasznik Founder and President, Foresight Valuation Group (Palo Alto, CA), a Silicon-Valley based intellectual property, valuation and start-up advisory firm. Lecturer on IP Strategy, Stanford Graduate School of Business (MBA class) Licensing Executives Society (LES), High Tech Sector - Leadership Committee; Chair, Nanotechnology Committee Intellectual property (IP) valuation and strategy expert, with 20 years of experience analyzing IP portfolios for mergers & acquisitions, financial reporting, technology commercialization decisions, tax compliance, transfer pricing, litigation damages and business liquidations. Work with corporate clients across industries, from Fortune 100 to start-ups, as well as law firms, universities, research institutions, inventors, IP brokers and patent funds. Extensive telecom expertise, including: AT&T, Avaya, Juniper Networks. Co-founder, CFO and adviser to startups in the fields of telecom, media, cleantech and healthcare.Foresight Valuation Group © 2012
Outline The IP (Patent) Marketplace in the US Mobile Wars Ecosystem and Forces Is the Cloud Market the next Litigation Battlefield? How is Cloud Similar to Mobile? Early Indicators of Patent/Litigation Activity What to Expect in the Next 5 Years? How to Avoid Litigation Armageddon… Best Practices in IP Portfolio ManagementForesight Valuation Group © 2012
The Mobile Patent Wars Apple alone has been involved in 142 smartphone patent lawsuits since 2006. The top 10 litigants have over 1,000 smartphone related lawsuits between them Source: The Guardian and New York TimesForesight Valuation Group © 2012
Multi-Billion Dollar Deals Involving IP Apple, Microsoft, Google, the losing bidder Research in Motion, EMC, in the Nortel auction, Ericsson, and Sony announced the $12.5 joined together in a billion acquisition of consortium to win an Motorola Mobility, whose auction for the 6,000 IP portfolio includes patents of the bankrupt 17,000 issued patents Nortel at a price of $4.5 and 7,500 patent billion. applications. June 2011 Aug 2011Foresight Valuation Group © 2012
Mobile Market Patent Activity Redistribution of IP holdings through Land-grab and Turf-wars… Global Litigation Global court battles: Apple-Samsung (2011) Non-Practicing Entity (NPE=”Troll”) litigation: NTP-RIM $612.5 MM in damages (2006) Multi-billion Dollar IP Transactions Patent acquisitions: Nortel patent auction (2011) Company Acquisitions: Google/Motorola mobility (2011)Foresight Valuation Group © 2012
A “Perfect Storm” in the IP Marketplace IP MarketplaceForesight Valuation Group © 2012
The New Patent Marketplace in 21st Century – Rise of the Intermediaries Enforcement (Litigation) IP Creators IP Users - Operating Companies - Operating Companies - Independent Inventors - Others - Universities Patent Sales/licensing - Research Institutions - Gov’t labs Cross Licensing Intermediaries: •Non-practicing entities (NPEs) •Patent Funds/Aggregators (Intellectual Ventures) •Market Makers (Auctions, patent exchange) •Financial services (securitization, litigation finance)Foresight Valuation Group © 2012
Is Cloud the Next Patent Battleground? Attribute Characteristics Mobile Cloud? Market Size Explosive Market, large economic stakes ?? Products/ Multiple features in one product Services Multiple layers of Services in Platform IP Landscape Patent thicket – overlapping claims ?? Business method patents – broad claims ?? Competitive Incumbents with large IP holdings Dynamics Newcomers entering markets without IP NPE (trolls) patent holders Foresight Valuation Group © 2012
Market Size: Explosive GrowthForesight Valuation Group © 2012
Products/Services: Multiple Cloud Service LayersForesight Valuation Group © 2012
Cloud Patent Landscape: Accelerated Patenting Activity 6000 5154 5000 4801 Cumulative Count of Patent Families 3867 4000 3000 2781 2090 2000 1556 1143 837 1000 512 248 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Note: Filing Year The search has been conducted from 2003 onwards. Number of patents for 2011 & 2012 may be incomplete because some of the applications might not have been published yet. The counts are indicative and not comprehensive.Foresight Valuation Group © 2012
Cloud Competitive Dynamics: Incumbents with Large Patent Holdings 800 Count of US patents Families 694 700 600 500 400 333 293 300 200 125 103 97 82 78 75 100 51 0 IBM MICROSOFT HEWLETT HITACHI ORACLE Hon Hai CISCO FUJITSU LTD AMERICAN NEC CORP PACKARD Precision POWER Industry CONVERSION Assignee Note: The search has been conducted from 2003 onwards. The subsidiaries of the assignees have not been considered for the analysis. Number of patents for 2011 & 2012 may be incomplete as some of the applications might not have been published yet. The counts are indicative and not comprehensive.Foresight Valuation Group © 2012
Cloud Computing – Taxonomy Cloud Computing Architecture Management Security (889) Services (2412) Storage (584) (1237) (1761) APIs Storage Deployment Models Provisioning Access Control System/Hardware Cloud Engineering Load Balancing Fault Tolerance Web Services & Storage PlatformTechnologies Enterprise Applications Virtualization Resource Management Cryptography & Secure Storage Virtualization Transmission Mobile Applications Performance Data Storage Management & Billing Cloud Client Software Cloud Firewall/Gateways Scalability & Software as a Service Maintenance Infrastructure as a Bandwidth Service Management Platform as a Service • Dell Service Cloud • Amazon CloudWatch • IBM Hosted Application • Amazon Relational • Cisco MDS 9000 Family Implementation Security Management Database Service (RDS) Solution • Amazon EC2 PackagesProducts* • Citrix Cloud Gateway • Apple iCloud • Amazon EC2 Instance • BMC Cloud Lifecycle • Oracle Automatic Storage Management • Symantec.cloud • AWS Amazon Cloud Drive Storage Management • EMC VPLEX • VMware vCenter • Symplified Cloud Access • IBM Sterling B2B • VMware vSphere Operations Management Manager Integration Services • IBM SmartCloud Archive • Citrix Cloud Platform Suite * Product list is indicative and not comprehensive
Cloud Patents by Technology Area (Since 2003) 3000 2500 2412 2000 1761 Count of Patent Families 1500 1237 1000 889 584 500 0 Architecture Manangement Security Services Storage Note: The search has been conducted from 2003 onwards. Number of patents for 2011 & 2012 may be incomplete because some of the applications might not have been published yet. The counts are indicative and not comprehensive.Foresight Valuation Group © 2012
Cloud Litigation/Collaboration Trends No signs of litigation between any of the large IP holders, not likely either Cross Licensing between large players Likely to see litigation between startups/large players Early signs of troll litigation Early signs of collaboration: Facebook’s Open Compute Project technologies as open hardware, our goal is to develop servers and data centers following the model traditionally associated with open source software projects…”Foresight Valuation Group © 2012
Are Trolls Coming to the Cloud? “Patent Trolls Are Hindering Innovation at PersonalWeb Technologies Rackspace—And Our Customers” (2011-2012) -Alan Schoenbaum, SVP, General Counsel and Secretary at Amazon/Amazon Web Services Autonomy Rackpsace (October, 2012) Caringo EMC Google/YouTube Clouding IP LLC (2012) NEC Corporation of America NetApp Rackspace Hosting VMware Amazon.com / Amazon Web Services Apple Apple Dropbox Google Facebook Microsoft Microsoft IBM Oracle Nexsan Technologies Motorola Mobillty Rackspace YahooForesight Valuation Group © 2012 Source: Pacer, CRN.com
Troll Litigation is a Serious Problem! “This year, about 61 percent of all patent lawsuits filed through December 1 were brought by patent-assertion entities, as compared to 45% in 2011 and 23% five years ago” “About 35% of startups that have raised $50 - $100 million have been sued on a patent, as have 20% of the companies that have raised $20 - $50 million” “Estimates on the ratio of demands to lawsuits run between 100:1 to 307:1” Source: Patent Troll Cases Now Dominated by “Trolls”, Study by Colleen Chien, Reuters, December 10, 2012Foresight Valuation Group © 2012
IP Strategy Throughout the Lifecycle IP portfolio building Portfolio liquidation Portfolio commercialization & monetizationForesight Valuation Group © 2012
Portfolio Building – Early Phase Goals: • Freedom to operate • Block competitors • Support future products • Hedge against litigation • Attract buyers, investors Sources of IP: • Internal R&D filing patents • Buying patents • In-licensing (university, government labs, etc) IP portfolio buildingForesight Valuation Group © 2012
The Chasm as a Critical IP Juncture: Liquidation or Litigation? Litigation Liquidation Portfolio commercialization & Portfolio liquidation monetizationForesight Valuation Group © 2012
IP Best Practices: Portfolio Building Rely on patent analytics Guide future R&D >> white spaces Know your competition>> patent landscape (by family, industry) Identify external sources of IP Identify potential buyers Seek legal advice Patentability assessments, prior art searches, claim drafting Don’t do it (all) by yourself! Start early! AIA (First to File) kicks in 3/16/2013 Don’t compromise key filing deadlines by lack of funding Use “roadmap” approach to filing Don’t forget your foreign filingForesight Valuation Group © 2012
IP Best Practices – Later Phase Keep Building Your Portfolio as a Strategic Business Asset Have a clear filing strategy, aligned with your corporate vision Monitor the industry for buying opportunities (companies, patents, technologies) or licensing opportunities (universities, labs) Monitor your competitors Defensive Goals – Manage Litigation Exposure Don’t panic! Be Prepared… Assess your options, use litigation data - not only legal analysis (prob. of success, anticipated damages, etc) Mitigate the risk (patent defense funds) – be proactive! Offensive Goals – Enforcement & Monetization Be ready to enforce you IP Monetize your portfolio regularly Manage royalty, maintenance paymentsForesight Valuation Group © 2012
What to Expect in the Cloud market Foresights Predictions for the next 5 years: The golden age of cloud patent litigation is about 5 years away First signs of troll litigation are popping up The cloud market can avoid mobile Armageddon by better collaboration Startups need to be aware of patent traps and plan their strategy accordingly First to File enhances the urgency of global patent filing for all players WHAT DO YOU THINK?Foresight Valuation Group © 2012
THANK YOU! Efrat Kasznik President, Foresight Valuation Group firstname.lastname@example.org 650-561-3374 http://www.linkedin.com/in/ekasznikPresentation available upon request