March 2010

Timing Is Everything

By D. Patrick O’Reilley, President, LES International

My younger son has a favorite saying: “If you wait to the last minute, it only takes a minute.” Rather than being profound, this may reflect his tendency to procrastinate. It is also a truism for busy professionals; work expands to fill the time available to complete it.

I am writing this article after receiving a gentle reminder from Larry Plonsker. It was due last week, but, ever flexible, Larry has given me an extension. I seem to have inherited from my son a gift for procrastination.

Perhaps my delay is a result of poor timing. This article was due two weeks before the Winter Meeting in Istanbul, but it will be published in March, after Istanbul and shortly before the Annual Meeting in Sandton, South Africa. I cannot report on the results of the Istanbul meeting; all I can address is expectations.

It is hardly newsworthy to report on what may happen. But, such is my lot. As of now, it appears we will have nearly sixty National Presidents, Committee Chairs, and Member Society representatives in Istanbul to discuss committee activities for the 2010 LESI year. While the Board manages the organization, it is through the committees that LESI acts. It is appropriate, therefore, to devote the Winter Meeting to the committees.

A couple of years back we changed the name from a Planning Meeting to the Winter Meeting in recognition that we cannot wait until January to plan for a year that began in October. The Board and the Committees have been active since October and will use the Istanbul meeting to discuss the committees’ activities thus far and its plans for the remainder of the year.

A principal focus of the Board since October has been financial planning—how to support the continuing activities of the committees in a challenging economic climate. Fortunately, past LESI administrations had followed good association practice by accruing sufficient assets to support operations despite a downturn of revenue. Also, fortunately, the expected drop in membership worldwide did not materialize. True, some Member Societies lost members, but others gained members, probably a reflection of different impacts of the recession.

Even those societies that lost members did not lose as many as expected, perhaps an indication of the importance of technology transfer to the renewed growth that is just beginning to show itself.

The Long Range Planning Committee has been actively considering the future of LESI. Under the mandate to consider what LESI will look like and should look like in ten years, Ken Payne and Lex van Wijk, as co-chairs, and vice chairs Hector Chagoya, Daniel Koh and Junichi Yamazaki, developed a list of topics for discussion that may be controversial but will cause us all to consider the future.

• Should Member Societies be eliminated in favor of one worldwide group?
• Should Member Societies be consolidated into regional societies?
• Should LESI be subdivided by industry instead of geographic region?
• Are there incentives that would encourage business executives to join a Member Society?
• Should we eliminate the requirement to join the local Member Society?
• Should we have corporate membership?

Such questions raise differences of opinion within the Committee, but the Committee recognizes the need to present the questions for open discussion. The initial discussion will occur in Istanbul. Unfortunately, Ken Payne had to withdraw from the Committee and will not be in Istanbul.

The Committee has benefitted from his insight, and he will be missed. Another Ken, Ken McKay, has stepped up and agreed to co-chair the Committee with Lex. LESI has much to gain from “thinking outside the box,” and the LRP Committee will guide us in that respect.

Alan Lewis chairs the Policy Position Ad Hoc Committee.

He will lead a discussion in Istanbul as to whether LESI should take policy positions with government and other policy making organizations. On issues related to IP licensing and technology transfer, can LESI speak with one voice or does it have to? Our membership is spread across numerous constituencies that on some issues may conflict making consensus on policy positions difficult and time consuming to achieve. In face of this reality, should LESI retire from the public arena or seek areas where we can have a policy impact without unduly disrupting the membership. Alan may need the three-year mandate of the Committee to answer the questions, but the first step will begin in Istanbul.

The External Relations Committee, co-chaired by Willy Manfroy and Art Rose, with vice chairs Markus Ineichen, Ken McKay, Walter Copan and Ichiro Nakatomi, continues to be very active. This Committee has maintained or initiated contacts with WIPO, UNEP, the World Economic Forum, OECD and several other organizations having an interest in technology transfer. Ichiro, for example, has contributed to the WEF comments on the proposed Global Responsibility License. His contribution has encouraged the WEF to consider LESI as a contributing organization that may participate in the WEF annual meeting in Davos, Switzerland. In another example, Walter Copan has been actively working with the EPO, UNEP and the International Centre for Trade and Sustainable Development to identify and quantify the impact of transnational technology transfer on adoption of environmentally sound technologies. LESI, through Walter and the External Relations Committee, brings to these deliberations a unique perspective not otherwise available.

In Istanbul, the Committee will discuss these and other activities, as well as solicit discussion on whether LESI needs more or less of such activity.

Wes Anson and Jim Malackowski have been actively seeking worldwide members for the Valuation Standards Ad Hoc Committee. They have also established contacts with other organizations involved in trying to define standards for determining the value of IP. As most of our members appreciate, placing a definitive value on IP is a challenge. But, as IP assumes a more important position on the balance sheets of companies worldwide, there must be some common approach to according a value to such assets. LESI brings to these deliberations a unique perspective, that is, of professionals who actually trade in IP. In Istanbul, the Committee will discuss valuation standards and LESI’s contribution to the process.

Another active committee, led by Lynda Covello, is the Standard Licensing Contract Ad Hoc Committee. While no one would suggest that an IP asset is as generic as a truck and could be sold or leased on standard terms, there is also no reason all aspects of an IP transaction should be unique to that transaction. This Committee will explore commonalities of international IP transactions and develop proposed standard terms. Having garnered support from members around the world, the Committee will generate standard forms and provisions that will be the starting place for more efficient IP transactions. In Istanbul, the Committee will explain its mission and goals.

In addition to these few committees, all other IPR Committees and the Communications, Education, Meetings and Membership Committees will report on their activities during the Istanbul meeting. Each of these Committees represents an important function of LESI and an important contribution to the Member Societies and their members.

The discussions in Istanbul will guide LESI for the reminder of the year and hopefully for years to come.

I will use the next of these articles to report on that meeting. It will no doubt be due to Larry Plonsker before the Annual Meeting in South Africa, leaving only speculation as to what transpires in Sandton. Timing is everything.

December 2009

An Opportunity For LES International As IP Makes Global Business Changes

By D. Patrick O’Reilley, President, LES International

It is an honor to be president of LES International at such a critical time. Much is changing in our world and our Society. These changes present an opportunity to make meaningful contributions to the profession and to our members.

The place of intellectual property in global business is changing. Today technology is like water—as it rises in volume it flows freely in all directions and around all obstacles. The volume of technology is increasing exponentially. It is freely and cheaply communicated worldwide to an ever increasing population of educated and skilled people who are able to commercialize it. While financial constraints ebb and flow, the trend supports continuing worldwide competition in innovation. Intellectual property remains an incentive to this innovation but may no longer serve as a long-term obstacle to such competition.

We can guide and counsel businesses, policy-making organizations and governments as to responses to this changing environment. Traditional applications of intellectual property rights have been attacked as archaic obstacles to progress.
As professionals in this field, we understand the dynamics of the technology market and the place of intellectual property, and we can shape the evolving perception of intellectual property. This will require more attention and effort by LES International and its Member Societies to identify and respond to policy initiatives that impact the value of intellectual property.

New business models have resulted from recognition of the changing technology market. Frequently labeled “open innovation,” these business models recognize that a company cannot control dissemination of technology nor employ all the smart people. Companies adopting open innovation models take advantage of the worldwide distribution of innovators by creating networks of independent developers to fill the new product pipeline. Intellectual property to these companies is a vehicle for obtaining the right to use the results of networked developments and an asset to be used not as a stick but as a carrot for collaborative networking and revenue generation.

LESI has a significant role to play in this new environment—providing education to policy makers faced with challenges to the intellectual property system and setting standards for intellectual property transactions in open innovation networks. Of course, LESI will continue to perform its traditional roles of education and networking for professionals in the field, but the
new environment requires us to adapt.

LESI, through the External Relations Committee, already is advising international organizations on intellectual property issues. The relationship with WIPO will aid that organization in developing policies regarding technology transfer, particularly to emerging economies. We are also actively participating in a program sponsored by the EPO, ICTSD and UNEP to study the impact of intellectual property on transfer of environmentally- beneficial technologies. We will also advise the World Economic Forum on its effort to create a Global Responsibility License by which IP owners can contribute
technology to the poorest of countries.

In addition to the External Relations Committee activities, the European Committee continues to prepare and submit important comments on EU initiatives that may impact intellectual property transactions. The Trademark Committee is also participating in an EU study of the European Trademark system.

LESI can apply its professional experience to the challenging transactional envi-ronment in the open innovation business models. As more and more industries recognize the need, demand for education and guiding principles will increase. LESI and its Member Societies should be in the lead in this area. Similarly, as intellectual property becomes more a
commodity and less a defensive weapon, the value of such a commodity must be determined. LESI is populated with experts who understand the various facets contributing to intellectual property value. It is appropriate for LESI to lead in developing principles and standards for such valuation.

I have two goals for LESI this year. First is to provide greater services to its Member Societies and their members. This will entail assisting Member Societies with their program and training needs and with their efforts to counsel and guide local policy makers on intellectual property issues.

The second goal is take the lead in guiding transnational policy makers on intellectual property transaction issues and in developing principles and standards for transactions in the open innovation business models.

To further these goals, I have asked each Committee of LESI to proactively aid Member Societies with their training and programming needs and to cooperate with Member Societies and other Committees in identifying and responding to opportunities to guide policy makers on intellectual property issues.

Since LESI represents various constituencies, I will form an ad hoc committee to identify and define core policy principles relating to technology transfer and intellectual property on which LES International can and should take positions. The goal of the ad hoc committee will be to provide a guide for the Board of Delegates, the Board of Directors and Committee chairs as to policies and positions on which LES International can and should take positions, to thereby facilitate timely responses to opportunities.

Standards for IP valuation and transactions need to be developed. Since the topics are not unique to any one industry, professional or regional Committee,  I will form two additional ad hoc committees, one to address generally accepted contract provisions to make more efficient international IP transactions, and the other to identify issues, factors and methodologies used in giving value to IP portfolios or license deals.

The three ad hoc committees will assist LESI in guiding IP policy and transactions in this new, dynamic technology marketplace. Like all ad hoc committees, they will expire after a defined term. Anyone interested in contributing to these committees should let me know.

The two goals for the coming year are consistent with the purpose of LESI—to support Member Societies in education and networking for their members and to represent Member Societies and their members in all international fora.

Effectively achieving these goals will require the aid of all interested members, and I welcome all ideas and help. Thank you for the opportunity to lead this organization for this year. And thank you for your contribution of time to make LESI the “go to” organization in intellectual property transactions.

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