Volume XLIII No. 4

Technological innovation has been the principal reformer of our world. Nearly every aspect of our lives—from human interaction and transportation to economic processes, leisure activities or health care—has been dramatically reshaped over the centuries, with an especially rapid change in recent decades. Licenses, in their tremendous versatility, have been one of the most important instruments for the transfer and spread of novel technological developments, at least since the beginning of the U.S. Republic. It would therefore seem that technological progress and licenses are inherently linked. It is surprising, however, that this connection has largely been scrutinized from the one-sided perspective of commercializing technology. The legal and business literature has overwhelmingly focused its attention on the transfer of the legal right to use and market patented technology. It is mystifying, however, how in a world characterized by cumulative innovation licensees, the role of licenses in the essential question of where innovations come from and how they are generated has largely been ignored.

Is recapture of unpaid royalties worth the effort and expense involved in an audit? Is there a certain percentage of revenue at which the licensee pays for the cost of the audit? What are the areas of greatest payoff in an audit? These and other questions are answered in this AmiCOUR advisory brief, which was previously presented at the Licensing Executives Society Annual Meeting held October 15, 2007 in Vancouver, B.C. under the title Freedom to Operate 2007—Royalty Audits and China. For purposes of reader economy, several of the important points are presented in the form of useful checklists. If any reader wishes clarification, we would be very happy to discuss specific items in detail.

1. The Current Automobile Industry According to a report issued by the World Business Council for Sustainable Development (WBCSD) for 2004 concerning survival of the automobile industry (see Figure 1), automobiles will still be an important means of transportation on a global scale in the future. Aside from whether the future form of the automobile industry will be the same as the current one, there appears to be no disagreement that it will continue to exist. The industry appears to be growing even in terms of the number of units produced domestically (see Figs. 2), and it appears the market will continue to exist in the future as well. It should be pointed out that the automobile industry is not limited to the manufacture of motor vehicles. To quote Professor Takahiro Fujimoto of the University of Tokyo, the structure of the industry as shown in Figs. 3 and 4 is a “vertically integrated structure that employs homegrown technologies.” The chemical industry is also of this type. It is the epitome of self-perfected independence within one’s own company or affiliated group. Another type of industry structure is the “horizontal multilayer type whereby optimal technologies are combined from outside like building a Lego structure.” Examples include the IT, electronics and electrical equipment industries. Components can be fit together by standardizing combinations of components like Legos. Consequently, it features easy substitution of components.

The following remarks were presented by Sergio Trindade at the LES (USA & Canada) and LESI Spring Meeting in Chicago, Illinois on May 7, 2008 in a Mini-Plenary: Choices, Choices and More Choices for Fuels in the Future. The best choice for the fuel of the future is NOT to need any extra fuel! Technologies for demand management, efficiency improvement and conservation are presently available. It helps to look at energy from the demand side, that is, the demand for energy services: transportation, lighting, cooling, heating, rotary motion. The energy innovation portfolio to meet increased supply would be very different from the energy innovation portfolio to meet demand management, efficiency improvement and conservation overall. And the ensuing licensing market might require a different set of practitioners’ skills. It seems that irrespective of the energy innovation configuration, a talent shortage is affecting the green start ups. Over the history of humankind, energy services have been met from human and animal muscles; wood and wastes; solar; wind and hydraulic energy (including ocean waves and tides); coal; petroleum; gas; geothermal and temperature gradients; and nuclear. Their relative contributions to the total of energy sources consumed have varied in the past and will continue to vary in the future. Singling out the demand for transportation, heating and power, globally speaking, it becomes clear that diesel fuel is probably the petroleum distillate of highest demand and highest rate of growth. Stretching the availability of diesel fuel requires: (i) meeting demand for diesel energy services with less diesel fuel, that is, using technologies for improving fuel efficiency; (ii) adding biodiesel to the diesel fuel supply and maintain higher efficiency. In general, biofuels and biodiesel in particular, can provide a measure of relief from pressures on fuel demand. They should be produced and used sustainably to make their fullest contribution to the energy system. Nevertheless, it must be understood that the role of first generation biofuels, for many reasons, will be limited to replacing fossil liquid fuels, to the tune of 10-20 percent. Since tropical areas of the world are more likely to produce biofuels more sustainably (including economically) than temperate regions, a global understanding among countries that opens up markets—a Global BioPact—would go a long way to make biofuels respond to liquid fuels demand globally. It would also mitigate the food versus fuel issue and contribute to peace and harmony among nations. One of the issues with biodiesel storage and use is oxidation stability. There are technologies already available to address this issue (e.g. www.internationalfuel.com), which will find increasing licensing demand, as biodiesel markets expands. A whole new world of technologies is likely to evolve, which will reward the vision, the luck and the persistence of those who are willing to take risks and try for the future, and those who will license the successful technologies.

1. Introduction In the age of the knowledge economy, copyright licensing remains at the heart of any intellectual asset management strategy—whether in a corporate or research environment. However, very few practical guides to copyright licensing are available. The aim of this paper is, therefore, to assist those working in a research and development environment needing guidance with the practical aspects of copyright licensing. 2. Copyright Law in the UK Copyright in the UK is currently governed by the Copyright, Designs and Patents Act 1988 and updates the law brought into force by the Copyright Act of 1911 and the Copyright Act of 1956. One fundamental and common misunderstanding about copyright is that it can be used to protect a concept or an idea. It is the original expression of the concept or idea through ‘literary, artistic, dramatic or musical works’ that copyright protects.

The enforcement of intellectual property (“IP”) rights through litigation has continued to rise along with jury awards for economic damages, particularly in patent infringement matters. Indeed, a cottage industry of patent litigation has developed in the Easter District of Texas involving plaintiffs and defendants coast-to-coast. As a consequence, many law firms are adding IP expertise to their practices, and an increasing number of trial attorneys represent clients in IP infringement lawsuits. This paper is intended as a general introduction to the types of damages available for consideration by counsel in IP litigation. Numerous other papers and treatises are available which more comprehensively discuss various aspects of this broad subject matter. The four primary types of IP rights are (i) patents, (ii) copyrights, (iii) trademarks, and (iv) trade secrets. These four types of IP rights can be broadly characterized as patent and non-patent (copyrights, trademarks, and trade secrets). To that end, this paper discusses IP damages in two sections: (i) patent damages and (ii) non-patent IP damages.

Overview Universities establish policies and practice for managing their intellectual property (IP) in order to achieve a variety of objectives—one of which is typically the fast, broad, commercialization of university developed innovations for the purpose of (a) benefiting society and the regional economy, (b) supporting research and education, as well as (c) rewarding inventors for their ingenuity. Accordingly understanding how university innovations get commercialized to meet those objectives is important in optimizing a university’s IP policies and practices. However, many university executives don’t have a comprehensive understanding of the pathways by which innovations get commercialized on their campuses. To address this disconnect, this article proposes a new framework for characterizing how innovations get commercialized at universities, and then the article analyzes IP licensing, patenting, and related aspects of sponsored research in the context of this new framework in order to help universities strategically optimize their IP policies and practices. Commercialization Pathways Innovations developed at universities get commercialized through a variety of pathways. These pathways can be organized into a framework that can be used to optimize a university’s IP policies and practices such that the IP policies and practices strategically help drive the commercialization of innovations

The licensing profession is undergoing a change in focus in response to the world’s appetite for innovation. The constructs used are those of Open Innovation, Connect & Develop, and Integrated technology-business- intellectual property (IP.) That said, no matter by which name the process is called it has been demonstrated that the methodologies underpinning each are good ones for companies to use that are trying to grow through innovation. This paper summarizes the points of view expressed in the May 2008 LES Add-On Workshop held in Chicago, IL, USA. This workshop used real-world stories and data to highlight important points of these methodologies. As a condition for doing so it must be remembered that the opinions expressed are those of the authors and not necessarily those of their organizations.

The intangible assets owned by any software development enterprise, include: the technical knowledge (and know-how) of its staff, the competence of its sales force, the business knowledge (and experience) of its management, its goodwill and reputation (including trademarks), the value of its intellectual property (including copyrights, trademarks and patents), the commercial value of its licenses, and the value of its software inventory. Recent les Nouvelles articles discussed the need to accurately identify, analyze, and evaluate intangible assets within an enterprise as regulations such as Sarbanes Oxley and Financial Accounting Standards Board (FASB) Statements 141, 142 that force governance of these assets. There were three questions asked: Which software assets can be monetized? And third, what is the commercial value of software, whether as a capital asset or as debt security? Further to a recent les Nouvelles article’s discussion of a software asset’s monetization, this article will address which software assets have value. Mr. Kemerer, a writer for Information Week asked, “Do you know what your software inventory is worth?” It’s a question you may not have addressed, or even thought of, but knowing the value of your software inventory can help you manage it better. Furthermore, the current spate of mergers and acquisitions means that enterprises must estimate the value of existing software application inventories for financial and tax reasons. It is not an easy task as many software products today, including embedded software, are actually complex information systems that involve many components, networks and other related assets. Those assets are highly sophisticated, highly integrated, and many have the ability to communicate directly via secured network connections. Many software products cost millions of dollars to develop, millions of dollars to deploy, and tens of millions of dollars to adapt to ever-shifting conditions over time.

In some circumstances, a licensor may intend for a license to continue for the life of the patent. Nonetheless, when writing a license agreement, it is important to consider other changes in circumstances in which a licensor ma wish to terminate the license agreement earlier. In Orion IP, LLC. V. Mercedes-Benz USA, LLC., Civil No. 607-451 (E.D. Tex. May 30, 2008), the United States District Court for the Eastern District of Texas found in favor of the licensee, Mercedes-Benz USA (“MBUSA”), holding that it was still entitled to a license even after splitting from the patent corporation that originally signed the license agreement. This case involves a settlement agreement signed to end litigation between Orion, LLC. and DaimlerChrysler Corporation. When the agreement was signed, DaimlerChrysler Corporation was the parent corporation of Mercedes-Benz USA. In the settlement agreement, Orion granted a nonexclusive, nontransferable, royalty-free, fully paid-up, worldwide license to DaimlerChrysler Corporation (“DCC”) and all DCC Related Companies. The agreement specifically stated that “DCC Related companies shall include, by way of example but not limitation, Mercedes-Benz USA, LLC.”

Introduction Out-licensing is a mainstay of life science business development and financing strategies because it can be deployed to achieve a variety of goals. Companies frequently use licensing in order to access resources (financial and non-financial) that are unavailable or insufficient within their own organizations. Accessing capital is among the most common reasons to out-license. Up-front license fees provide cash infusions to fund operations and defer the need to obtain capital from the equity or debt markets. In addition, a successful licensing transaction provides an imprimatur on the licensed technology/IP and on the licensor itself, both of which may enhance subsequent market-based capital formation activity. That said, while out-licensing is an important capital formation tool, licensing typically requires sacrificing all or partial control and downstream financial benefits of the licensed program or technology to the licensee. Companies considering out-licensing primarily as a near-term, direct capital formation tool may wish to consider revenue interest financing as a strategic alternative.

The stated objects of this comprehensive book (with 1,051 pages of text plus appendices and an index) are to offer an “integrated analysis” of the licensing not only of patents, copyright, trademarks and trade secrets, but also of information not covered by intellectual property rights law. The authors state that they are dealing “with a vibrant field of law whose contours are shifting in the face of changing economics and business practices.” They intend to “create the framework for understanding the complex and changing body of licensing law and the various influences that shape it” (1:1, p.2). They aim to “provide an integrated coverage of all areas of licensing law so that practitioners would have a comprehensive source for dealing with licensing questions that arise in the press of modern practice” (Preface, p.vii). This book is distinctive from other books on licensing on account of integration as well as the recognition that the licensing information is now the “most common transactional form for trafficking in commercial informational assets that now serve as the foundation of our modern economy” (Preface, p.vii). The integration of traditional intellectual property and information, especially computer information not covered by intellectual property is not new to the authors. Raymond Nimmer, the Leonard Childs Chair of Law at the University of Houston Law Center and co-director of the Houston Intellectual Property and Information Law Institute, was a member (and reporter) of the Committee that acted for the National Conference of Commissioners on Uniform State Laws in preparing the Uniform Computer Information Transactions Act “ UCITA” in 2000. Jeff C. Dodd, a licensing lawyer who is a partner in the Austin and Houston offices of Andrews and Kurth LLP, represented companies and industry groups in the UCITA drafting.

Volume XLIII No. 3

In the United States, the doctrine of patent exhaustion cuts off a patent owner’s rights to enjoin, control or extract royalties from a patented product after an initial authorized sale of that product in the U.S. While the basic policy of preventing a patent owner from repeatedly extracting compensation for the same product seems straightforward, the law developed by the courts over the past two centuries in response to efforts by patent owners to preserve and control their rights is more complex. For example, patent owners have tried to avoid exhausting their rights in a patented product by characterizing their disposition of the patented product as a license rather than a sale, only to see that courts have uniformly concluded that patent rights are exhausted in such instances. Patent owners have also sold or licensed patented products with various restrictions on their subsequent use by companies at various levels in the supply chain. It is in those situations where the courts have most frequently discussed the exhaustion doctrine.

With the current threat of an economic recession, commercial litigation and, in particular, patent litigation is picking up. This comes at a moment of heightened action in the patent arena: a recent damages award of $1.5 billion, eight other damages awards in federal district courts exceeding $100 million in the past three years alone, judicial decisions reducing the likelihood of permanent injunctions and scope of eligible damages,proposed legislation to reduce the availability of damages, and a continuing increase in patents granted and actions filed. Indeed, senior executives are facing a myriad of issues on the use of litigation to protect and monetize their patented products and ideas. Although the risks in patent litigation have increased, the damages awards remain significant. These issues also raise questions about companies’ patent positions, protection and enforcement strategies, and litigation tactics.

The “technology transfer” process is complex in nature, and is made increasingly so due to expectations from internal and external stakeholders. Given this, we believe it is imperative for a technology transfer organization to engage in a comprehensive strategic planning process. It is important for any such organization to identify a specific primary goal, and to then implement strategies, objectives and tactics consistent with the chosen goal. In this paper, we compare and contrast perhaps the four most commonly stated organizational goals for operating a technology transfer function, which are: to provide a service for the organization’s researchers, to maximize the societal benefit of the new technologies, to act as an “engine” for economic development (assume local and regional), and to act as a revenue generator for the organization. We then contrast and compare the strategies, operations, and policies for offices operating under each of these four goal scenarios.

Climate change unquestionably is a global problem. Nonetheless, that problem raises different issues in different countries. This article examines, from the perspective of the domestic situation in the United States, one specific issue: how attacks on the U.S. patent system threaten both green innovation and the potential for a green economic boom in the United States.

Innovation executives are emerging in executive suites throughout the world and in addition many nations are appointing ‘Ministers of Innovation’. This is due to increasing recognition of the importance of innovation to future shareholder value as well as concerns related to protecting their IP from internal and external threats as well as concerns over assuring ‘Freedom to Operate’. However, the role is so new that often there is little in the way of an adequate job description. This article lays out the basics of the missing job description in terms of their responsibilities. These include finding innovation throughout their enterprise, protecting it, facilitating it, reducing R&D costs, increasing licensing revenues, protection from ‘trolls’, modeling IP economic flows, enabling disposition decisions, managing patent committee, strengthening legal position, and globalizing market protection.

This paper discusses the business reasoning for the practice whereby standard development organizations (SDOs) require undertakings to license Essential patents on fair reasonable and nondiscriminatory terms (FRAND undertakings) as a condition of approving standard specifications. The central business reason for this practice is for the stakeholders to avoid excessive royalty costs that would be possible due to patent holder bargaining power when negotiations are conducted ex post standardization and ex post implementer investment. This paper proposes an ex ante investment analysis (not to be confused with ex ante declaration of licensing terms) and a top down approach for determining reasonable royalties. In order for implementers to determine whether royalties would make it economic to invest in implementations, it is necessary for them to evaluate the total cost of licenses for use of all Essential patents, against their business case in investing to standard implementations. It is argued that licensors should base their offered rates as a justified proportion of such total cost. To improve the predictability of licensing outcomes at FRAND rates, it is recommended to SDOs to expressly require application of the principle of aggregate reasonable terms (ART) and the principle of proportionality.

In Gordon Smith’s book “Valuation of Intellectual Property and Intangible Assets,” third edition, he discusses that proprietary technology or trade secrets and know-how is often more valuable to an enterprise than its patents. He references Karl Jorda, David Rines Professor of Intellectual Property Law and Industrial Innovation at Franklin Pierce who states, “Patents are but the tips of icebergs in a sea of trade secrets. Over 90 percent of all new technology is covered by trade secrets and over 80 percent of all license and transfer agreements cover proprietary know-how or hybrid agreements relating to patent and trade secrets.” Much of those trade secrets are in software processes, products and programs, electronic databases maintained by software, and trade secrets embodied in software. With so much invested in software, how can it be leveraged?

Best practices in evaluating and protecting intellectual property (IP) are determined by measuring and comparing the operations of enterprises based on outcomes. The mission of an enterprise drives its organization, its goals, the allocation of its scarce resources, and its definition of successful outcomes. The missions of universities, businesses, and Department of Defense (DOD) laboratories are different; and, so too are successful tech transfer outcomes. These enterprises measure some of the same evaluation and protection activities and have similar tech transfer processes. Each enterprise can learn from the other. In order to identify the best practices in technology transfer, a questionnaire was mailed to over 80 DOD labs, personnel interviews were conducted with the tech transfer offices at five leading universities and a literature survey of business practices was conducted. Results were compared among the DOD labs and their evaluation and protection processes were compared with the practices at universities and businesses. It was found that the best practices for maximizing IP disclosure and protection in the DOD include: • The establishment of rewards for disclosures, • Conducting patent award ceremonies, • Establishing and utilizing an invention review board, • Locating patent attorneys and/or paralegals on-site. Universities and businesses do some of the above, but they also stress the importance of the support of executive management and the importance of achieving this support. It is critical to demonstrate the value of intellectual property by insuring that technology transfer is an integral component in the strategic plan for the research enterprise.

When a complaint is served, most defendants ask, “Can I win?” The ability to qualify the risks related to litigation is often challenging. Some may even call it next to impossible to do, but this is exactly what litigants should attempt to do when managing patent litigation. A second question also asked by both parties is: “How much will this cost me?” Whether the parties are math oriented or not, natural human instinct includes sizing up the odds and estimating the costs. This whitepaper suggests that case probability analysis can be done more accurately by applying some basic mathematical principles. Doing so results in better decision making. This said, in order to evaluate risk more accurately, two core areas of expertise must morph together in order to compute an accurate result. First, a proper balance of legal acumen must inform the analysis; and, second, the statistical calculations must be performed correctly. In other words, even if you have the legal part right, case managers must be able “get the math right” as well. This whitepaper presents the basics of case probability analysis and identifies a few of the pitfalls to avoid. These are the first steps to making better case management decisions.

A confidential disclosure agreement (CDA) is arguably the most commonly used contract between companies. However, its commonality and ease of use can overshadow the many serious implications and issues associated with a CDA. Of the many issues surrounding CDAs, this article highlights five aspects of CDAs that frequently elicit philosophical tension between parties. Consciously assessing each CDA’s (i) scope, (ii) offensive or defensive position, (iii) residual rights clauses, (iv) reverse-engineering provisions, and (v) limitation (or not) of damages, lays a good foundation to help assure a party does not execute an unfavorable CDA. Even though it may be short and commonly used, there is no such thing as a simple CDA. Although the principles mentioned in this article apply worldwide, the law cited is drawn solely from the jurisprudence of the United States.

This book will serve as an excellent resource for licensing practitioners. Although it is international in scope, it will still be useful for practitioners who only license domestically. By the highlighting of the differences so succinctly, the reader can better understand the fundamental principles underlying practice in the reader’s own jurisdiction.

Volume XLIII No. 2

The impetus to use academic innovations to enhance peoples’ lives in the developing world, which we term promoting Global Social Responsibility or “GSR,” got its start with healthcare and the need to ensure affordable access to life saving medicines even during their period of patent protection in the developed world. However, academic innovation has the potential to advance living standards in the developing world in other ways in addition to healthcare, and it is equally important that academic institutions commit themselves to realizing this broader potential and adopt licensing approaches that anticipate these broader considerations.

Intellectual Property licensing is becoming a key aspect of leading corporations’ strategic business plans. And, finding and proving infringement of your patents is the essential foundation of any successful licensing campaign. More and more companies perceive the value of their own Intellectual Property. Many attempt to license their technology to achieve business goals or generate revenue. In a crowded field, it is harder to stand out. Strong evidence that backs up your patent claims will make you stand out. Successful assertive patent licensing programs use reverse engineering of competitor’s products to show infringement. New developments in the patent licensing arena are making reverse engineering even more essential for any company seeking to capitalize on their intellectual property assets.

The People’s Republic of China represents almost one-quarter of the world’s population, and it has one of the world’s fastest growing economies. Any international licensing strategy cannot afford to simply ignore such a market. But for most licensors, whose international experience is primarily in countries with developed legal systems, China represents something of a “black hole” about which they know little more than what they read in the press. And much of that press coverage they consider worrisome.

Last February, Joe Rogan, the beefy host of the gross-out extravaganza “Fear Factor,” got on the stage at the Los Angeles club The Comedy Store and unleashed a tirade against the comedian Carlos Mencia, who sat beside him on a stool, angrily protesting. According to Rogan, Mencia had been stealing other comedians’ material for years, and the only way to stop him was by making his habits widely known. This Rogan did his best to achieve; shortly thereafter, he posted a video of the exchange—liberally peppered with indecencies and spliced with supporting material—on his Web site. From there it spread quickly over the Internet.

The LES mantra of the 1990s was that “Wealth in the 21st Century would be measured in ownership of intellectual property.” Well, the information age is here and we see an increasing number of corporations accumulating wealth based on intellectual property including (Software). We watched Microsoft’s enterprise value pass one quarter of a trillion dollars and annual revenue exceed fifty billion dollars, with much of it due to Software licensing. Yet, we see few line items on their corporate financials touting ownership of intellectual property including Software assets. One is left with the thought, “where’s the beef?”

The question “What is Patent Quality?” is one that has long been answered not by the authors of this paper but by the marketplace itself. It has been defined by the actions of patent holders in their decisions to maintain patents of quality and abandon patents of lesser quality and value. Ownership of quality patents has been rewarded by both public and private markets with a scale and precision that simply has not been well understood. Our statistical research shows not only that the marketplace appreciates quality patent assets, but that many of the attributes which drive quality assessment by market participants are well correlated to those that affect investor returns.

Copyright law does not protect any particular idea. Rather, copyright protects only the expression of that idea. Limitation to the expressions of an idea is the principal distinction between the applications of patent and copyright. Unlike copyright, a valid patent does not protect the expression of an idea but the underlying substance of it. For example, a patent applicable to a microchip protects not the expression of the chip itself, or the electrical diagram describing it, but the idea that given circuits can be organized and made to operate in a particular way. Because of their potentially vast scope, patents are construed more strictly, require a registration process, and last for shorter periods than copyrights.

n les Nouvelles 2003, pp. 176–183, the authors have reported on components for agreements relating to research cooperation between industries and universities in Germany, generally known, since then, as the “Berlin Contract.” The model solutions according to the “Berlin Contract” had been found, under the patronage of IPAL Gesellschaft für Patentverwertung Berlin mbH, the central Technology Exploitation Office of the universities based in Berlin, Germany, and other institutions, by a number of IP and licensing experts from both the university and industry side, amongst them the authors of this article.

Under U.S. law, patents are granted to the inventors of the patents, who, like other patent owners, typically transfer ownership of their patents by an assignment. U.S. patent law generally requires that such assignments be in writing, but in Akazawa v. Link New Technology Int’l., Inc., No. 2007-1184 (Fed. Cir. Mar. 31, 2008), the United States Court of Appeals for the Federal Circuit held that ownership of a patent may be transferred not only by an assignment in writing, but also based on operation of other laws of property transfer.

Volume XLIII No. 1

Thank you for that kind introduction. You know, the last time I spoke before this august body, I had just been hired by Microsoft after a 28-year career at IBM and a 3-year career as a venture capitalist. And it’s funny, but at the time, every media pundit and IP wonk in the world claimed to know exactly why I was hired and what my job was going to be.

At the Fall 2006 LES (USA & Canada) Annual Meeting in New York City, the Chemicals, Energy and the Environmental Committee of LES International and the Chemicals, Energy and Materials Committee of LES (USA & Canada) sponsored a mini-plenary session on Global Energy. Leaders from government, industry and funded institutes presented facts, figures, insights, challenges and hopeful options that society is relying on to solve one of the greatest, if not the greatest, challenges to our way of life: having enough energy to spur and sustain economic growth and development without strangling humanity in a noose of greenhouse gas emissions and climate change. Just about all conceivable energy source challenges and options were covered at the session, as was the realization that licensing was going to figure into the solution as a mechanism to ally interested parties into collaborations and ventures that can solve the problem and motivate the committed participants.

Technology transfer between universities and industry plays an important role in both filling industry pipelines with innovative technologies and promoting economic development. Nearly all academic institutions with research enterprises have technology transfer offices, and institutions as a whole are accruing a significant number of intellectual property (IP) assets that are available for industry to license, develop, and offer as products and services to the broader community. The optimal mechanisms for transferring this growing base of academic IP to industry collaborators remain to be determined, however, academic IP marketing has recently received increased attention.

With the continuing transition of the U.S. from a manufacturing to a service economy, intangible assets comprise an increasingly significant portion of corporate market values and balance sheets. Consequently, the valuation of intangible assets constitutes a considerable issue to LES members, and their employers and clients. The American Institute of Certified Public Accountants (“AICPA”) recently released its first valuation practice standards for its CPA members, an overview of which is provided in this paper.

Due to the growing role of technology and its impact on increasing the effectiveness of production elements, upgrading competitiveness of products manufactured or services rendered and opening doors for industrial product to penetrate new or existing markets now more than ever, technology acquisition has become closely associated with economic development and growth.

The conflict between intellectual property rights and standardization has become clearly visible with the examples of the second generation (2G) wireless GSM system and the third generation’s (3G) WCDMA and CDMA-2000 systems. Now, on the verge of standardizing fourth generation (4G) systems, the mobile telecommunications industry has become highly sensitive to issues resulting from the ownership of a standard’s essential patents. Mobile WiMAX, which is expected to form part of future 4G systems, is said to be offering a vendor-neutral patent landscape since it is based on new radio access technology, allowing no company to leverage its existing position into WiMAX. Based on the theoretical and historical context of IPRs in mobile telecommunications, this paper establishes a framework encompassing six factors to evaluate the role of IPRs in broadband mobile telecommunications. The factors include analyses of the number of essential patents, the patents’ fragmentation, the business models of the involved companies as well as external influences. This framework is applied to analyze the present 4G WiMAX standard, and the findings suggest that the supporting arguments may turn out counterproductive with WiMAX suffering from high transaction costs as well as weak competitiveness.

Georgia-Pacific contemplates that parties to infringement litigation engage in a hypothetical negotiation assumed to occur just prior to the date of alleged infringement. The hypothetical negotiation is intended to produce a license agreement similar to what a willing licensor and willing licensee would have agreed to, neither under any compulsion to enter into an agreement, assuming the patents in question were understood to be valid and infringed. Consistent with Georgia-Pacific, the parties may consider 15 factors, among other things, in connection with their negotiation. Consideration of these factors often is referred to as a Georgia-Pacific analysis, the outcome of which is intended to provide damages “adequate to compensate” the patent holder for infringement. Within the hypothetical negotiation construct, industry royalty rates often are considered as part of the analysis and determination of a reasonable royalty rate. Indeed, Georgia-Pacific factor 12, “the portion of profit or selling price that may be customary in the particular business or in comparable businesses to allow for the use of the inventions or analogous inventions,” calls for an evaluation of royalty rates paid for licenses to technology in the relevant industry. The sections that follow set forth an empirical study of industry license agreements. Results from this study are used to discuss how observed industry average royalty rates properly can be utilized in the hypothetical negotiation construct. These results are not intended to serve as a substitute for analysis of Georgia-Pacific factors 1 and 2, which relate to established royalties for the specific technology in question. Instead, the agreements which we have analyzed here provide a useful context within which rates for specific patent claims can be assessed.

So you and your negotiating partners have agreed on the use of mediation/arbitration as the mechanism to resolve disputes that may arise under your IP agreement. That is all well and good but the hard part of the task is now at hand: properly formulating the actual wording of the mediation/ arbitration clauses. The goal being to insure that you get the procedure you want while avoiding pitfalls which can be result in unintended effects or, even, in the entire agreement to arbitrate/mediate to be ruled invalid and unenforceable.

Over the last few years there has been a major shift in accounting rules that requires companies to identify and value any intangible assets they can. The aggregate value of all identified intangibles must be reported on the balance sheet along with the depreciation and the net value. The U.S. rules, Financial Accounting Standards Board (FASB) Statement 141/142, currently only apply to those intangibles acquired by acquisition but logically there is no distinction between intangibles acquired by acquisition and those developed internally. International rules, International Accounting Standards (IAS) 36/38 do not make that distinction and neither do the Securities and Exchange rule (SX) that requires all public companies to identify and value all intangibles that account for at least 5 percent of their company's total intangible value.

This IP Handbook is a very significant contribution to the knowledge and practice of technology transfer, particularly for early stage technology. Although it focuses on technology coming out of universities, research organizations and other public sector institutions, the information in the Handbook will be useful for those in the private sector.