Licensing matchmaking: the allure of reputation and organizational capital

Guest post by Ian McCarthy and Karen Ruckman, both from the Beedie School of Business, Simon Fraser University. This is based on the research article: Why do some patents get licensed while others do not?

If the deluge of reality television shows about the subject is any indicator, the public has an ongoing fascination with both inventors and their innovations. Entrepreneurship programs like Shark Tank or Dragons’ Den offer some entertaining glimpses into how venture capitalists decide upon the kind of people and ideas they want to invest it.

But do these insights extend to the licensing of patents? Not exactly. But for those wondering why some innovations and patents get licensed while others do not, a less intuitive reality television genre might provide more compelling insights. I’m referring here to the reality dating show. If there is a truism from programs like The Bachelor or The Bachelorette, it is that match-making is a complex affair that goes well beyond choices that can be made from reviewing what we know to be true on paper. Fans of these shows—you might secretly be one yourself—note that a much richer set of variables guide the decision-making process on the part of the relationship-seeking protagonists– which often creates a greater degree of unpredictability within the plotlines and consequently a more compelling reason for viewers to watch week after week.

So how does this all relate to the licensing of technology patents? We’ll get there in a minute. But first, it’s worth restating what readers of Patently-O already know: The global licensing of patents is serious business these days. Within just the U.S., it is estimated that the annual value of licensed technologies has increased from $50 billion in 1997 to $200 billion in 2017. As a result, the financial and economic stakes for this form of matchmaking are quite high. Such technology licensing involves the transfer of intellectual property rights between two parties: the owner of the patent (i.e., the licensor), and a potential buyer (i.e., the licensee). It’s a growing opportunity for companies, and an increasingly integral business activity for companies who buy and sell patents in order to develop new innovations and products. When companies aren’t in a position to develop their own patent, perhaps due to their size or a lack of financing or expertise, they are at least able to license it out. Such a proposition offers much for both sides of such a transaction. Yet much remains unknown about the interplay between buyers and sellers in the patent licensing market.

Our study in the journal Industry and Corporate Change sought to address this gap, and answer the question: Why do some patents get licensed while others do not? By focusing on patents that are technologically similar, our analysis has provided new insights into why some patents are more likely to be licensed out. We looked at U.S. biotechnology patents that had been licensed over a period spanning 1993 to 2007, and those equivalent technology patents that were not. Historically, patent licensing has been studied by looking at primary measures of the patent itself—using measures such as patent cites and patent claims that reflect potential patent quality and value. Through a quasi-experiment methodological approach, our study looked at not only these characteristics of the patent, but also the characteristics of the licensor.

And that brings us back to those dating programs. When the Bachelorette whittles down a field of serious relationship prospects from 30 eligible bachelors down to 1, she is making choices beyond the immediate appearance-based qualities of her suitors, such as intelligence and physical attractiveness. She also observes her suitors in a multitude of social, cultural, and athletic environments; and in some cases she visits their hometowns and meets their parents and old acquaintances. In short, the choices made by the Bachelorette (or Bachelor) hinge not just on the intrinsic qualities of the suitors, but also their connections, standing and reputation. So we shouldn’t be surprised when the brother of a famous NFL quarterback is selected in the season finale over other equally-qualified but ultimately frustrated candidates (this actually happened). This shows that perceptions of quality can be garnered by association.

The academic equivalent of this might be found in a PhD student applying for faculty jobs. Two top candidates for a professor posting might hold the same qualifications—number of journal publications, quality of journals where published, research awards, and teaching prizes. With other measures equal, however, the prestige of their institutions will play a major role in the final decision. Rightly or not, organizational reputation matters—candidate qualities are insufficient to explain who gets chosen.

The same phenomenon holds true in the licensing of patents. Some licences happen to be more desirable than others—and they appeal to their prospective licensees through a combination of patent attributes and their organization’s attributes: prestige, experience, brand, and reputation (See Figure 1). When a patent is associated with a licensor of high repute or prestige, it benefits from a halo effect. A patent may be deemed to be more appealing than it really is, if it comes from a company with a strong reputation for producing outstanding technology. Conversely, a groundbreaking patent might be ignored or undervalued if it is from a lesser known licensor.

Specific variables help dictate the outcomes of a patent. Technological prestige reflects the licensor’s reputation for high-quality technologies. Technological depth indicates the extent of a licensor’s existing knowledge in a particular technological area. Technological breadth is the knowledge scope of a licensor’s past patenting efforts. Other key variables include experience, size, and the licensor’s past relationships with the licensee.

Figure 1: The allure of patent and licensor characteristicsFigure1

In many ways this boils down to organizational capital, or the status of the licensor. When the qualities of a patent or technology are equal, licensees will seek out other information to make a decision, such as the status of the organization selling the licence. The owners are deemed to have more experience, alongside deeper and broader knowledge capabilities. We are looking at the characteristics of the licensor in terms of what makes them attractive beyond the technology itself. It’s not just the functional quality of the patent that takes priority—the appearance and prestige of the owner also matters. Bluntly put, it’s important to look good at producing good technology.

Granted, this doesn’t always produce reasonable outcomes. A PhD graduate from second-tier university might be just as qualified as a PhD grad from an Ivey League school, after all—but we can predict who stands the best chance of getting the faculty position. Similarly, a worthy patent from a lesser-known licensor might be overlooked in favor of technological similar inventions from licensors of higher repute or standing.

Our findings provide a reminder for licensors of all patents that halo effects are important—they play a major role in framing and licensing technologies. Technological brand and reputation directly influences one’s ability to licence a patent out. Licensees look not only to the qualities of patents, but also to the profile and prestige of their owners. Licensors can’t change these variables overnight, but they should be strategically aware of them. On the flipside, some high-value patents might be ignored or undervalued because they do not have this kind of halo effect working for them.

Ultimately, the matchmaking analogy holds true across different outcomes for patents. Licensors emit reputational signals to licensees, which in turn influence a firm’s success in licensing out patents. Impressions not only matter—they are the driving force in the licensing process for otherwise equal patents.

= = =

Acknowledgements: We are grateful to Derek Moscato for his ideas and work on this posting.

 

95 thoughts on “Licensing matchmaking: the allure of reputation and organizational capital

  1. Posted here because I cannot post in the Celgard thread due to the filter:

    The petitioned may wish to cite United States v. Bell Telephone Co., 167 U. S. 224 (1897) and move to vacate the obviousness decision because the other side’s withdrawal mooted the case.

    1. Ned,

      I do not think that you are correct concerning a case being mooted if the one side withdraws.

      The AIA was explicit in giving the Office the power to continue even through a withdrawal as you seem to indicate.

      1. Anon, read the case. The government suffers no injury. Moreover, case and controversy standing is not conferrable by statute. Just because one has a statutory right to be in a case, that does not mean one has constitutional standing.

        Nobody is entitled to standing to complain about some government action that affects all generally. If the government sues to repeal a prior government action because it adversely effects all, the government would be suing the government. That makes no sense.

        There is no case and controversy. The government has not standing in court to challenge the validity of a patent.

        1. You ar confusing yourself in thinking the action is first coming in an Article III forum.

          It is not.

          The presence in Article III stems from the Article I matter and NOT an Article III matter.

          The “case and controversy” IS the AIA action itself.

    2. Just because a petitioner dies and leaves no heirs does not mean that the PTO is barred from fixing an identified error with negative consequences for the entire population of the country.

      It’s hilarious that anybody would think otherwise. Even more hilarious that anyone would think that the Constitution (LOL) requires otherwise.

      Then again, the Constitution is turning out to be pretty much a total piece of s *h * i * t, isn’t it? Unless you’re a rich white Christian, of course.

      1. Then again, the Constitution is turning out to be pretty much a total piece of s *h * i * t, isn’t it? Unless you’re a rich white Christian, of course.

        Please feel free to cart your @$$ to some other country that has a Constitution that more fits your feelings.

        1. a Constitution that more fits your feelings.

          Because the one that protects those rich white Christians is the one that faux glibertarians like “anon” luv luv luv more than anything. Freederm! Smell it.

          Keep the laughs coming, “anon.” Wave that flag. You’re a very serious person and totally not an ign 0rant hypocrite!

          LOL

          1. MM, given your penchant for the black and red, I think you would be more at home in a Republic lead by a Central Committee and chaired by a Jacobin.

            How can a defender of due process even begin to have serious discussions with an anarchist?

      2. MM, you obviously can a hill of beans about controlling case law of the US Supreme Court interpreting the constitution.

        The Supreme Court has already ruled that the government has no case and controversy standing to challenge the validity of an issued patent. The government is not harmed. No one has standing to challenge the validity of a government action that affects all. Moreover, the government is challenging its own action!

        1. controlling case law of the US Supreme Court

          LOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOL

          Excuse me for a second. Okay. Controlling?

          LOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOL

          Aw, man, that’s funny.

          No one has standing to challenge the validity of a government action that affects all.

          LOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOL

          1. Actually, MM, someone did use scire facias to challenge the 19th Amendment. The Supreme Court ruled they did not have standing because they were not alleging any particularized injury.

        2. The Supreme Court has already ruled that the government has no case and controversy standing to challenge the validity of an issued patent

          That might be true with respect to standing in Federal Court.

          But Congress has the Constitutional right to define a patent as a right that can be taken away by the agency who granted it upon a showing that the original grant was likely improvident.

          Easy peasy.

          1. Except for this thing called other Constitutional protections of property.

            I suggest that you inform yourself on takings law in order to do more than just bloviate with your usual feelings.

          2. OK, then, MM. The government has no standing. We are agreed. Then the patent owner needs to toss the case as moot as the petitioner dropped out and there is no one left to challenged the validity of the patent in court.

          3. “But Congress has the Constitutional right to define a patent as a right that can be taken away by the agency who granted it upon a showing that the original grant was likely improvident.”

            That may very well be true right there. But they didn’t do that in the AIA.

            1. But they didn’t do that in the AIA.

              I have to check myself, but I agree with 6 here.

              The aspect of patents as property was completely unchanged by Congress in the AIA.

              What Malcolm is trying to do is to sneak an elephant through the mouse hole, and he (purposefully of course, as he has no cogent legal counterpoint), is “forgetting” that even Congress cannot write laws that violate other Constitutional protections of property.

              As I have mentioned, takings law is directly on point here.

            2. they didn’t do that in the AIA.

              Technically true. They did it even before the AIA. It was called “ex parte re-exam.”

              And with the AIA they did it again.

              Also interferences. Same deal.

              Yes, you can buy and sell a patent right like property. Utterly beside the point.

              1. MM, you are assuming that reexams are constitutional. The Supremes have already said that they are not. McCormick Harvesting.

                Interferences? So long as the losing patent owner had a right of de novo review of priority and a right to a jury trial for validity, I see no problem. But, just recently, the Feds held that losing patent owners no longer have a right to their day in court.

                Unconstitutional, as with the rest of the AIA that strips constitutional rights.

                The folks who crafted the AIA hated due process and loved their captured appellate court. One of them, Johnson, is being pushed by the Koch brothers for Director. I know you approve.

              2. Except those earlier items are either different enough or are not (and were not) valid themselves.

                Your “legal” argument does not hold water.

      3. “Then again, the Constitution is turning out to be pretty much a total piece of s *h * i * t, isn’t it? Unless you’re a rich white Christian, of course.”

        Um that’s who it was written for. I’m not even sure what you mean “is turning out”. That was known since it was written. Which is yet one more reason why we must endeavor to expand the white cis hetero patriarchy to those of non-white ethnicity that they may prosper as much as possible under the constitution and our gubmit. And until leftism is defeated this certainly cannot happen.

        “Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.” – John Adams

        ^Mr. Adams speaking at the time when only white people were citizens for the most part. You might think this quote is just for religious nuts but it isn’t, it’s the god’s honest truth, and in context he was definitely referring to whitey.

        This is also one of many reasons why lefties sit around whining about how the US is a “white supremacist nation” right now.

  2. > Some licences happen to be more desirable than others—and they appeal to
    > their prospective licensees through a combination of patent attributes
    > and their organization’s attributes: prestige, experience, brand,
    > and reputation …

    Sorry, the true world of licensing does not fit your academic model. At least in the electronics and technology space (where I practice), prestige, brand, and reputation actually do not have that much impact. Having participated in about 150 license negotiations over the past 20 years, and been involved in hundreds more involving colleagues, the absolute number one factor in any decision to license is the likelihood of enforcement (i.e. patent lawsuit) if no license is executed.

    In other words, how likely is it that the prospective licensor will sue if the other side tells it to pound sand? The answer to that question is more likely to drive the yes/no decision on a license, and the amount of the license, than your nonsense academic model. The threat of litigation depends on factors such as the licensor’s past litigation experience, whether the potential licensee has counterclaim leverage in the event of suit (to create a “mutually assured destruction” scenario in the event of litigation), the likelihood of venue transfer if suit is filed, and the susceptibility of the patent to CBM or IPR challenges, which takes into account the strength of the patent.

    Beyond the litigation threat, the second factor is the strength of the patents in terms of the infringement read and invalidity challenges. And “prestige” has nothing to do with this. I’ve seen patents whose inventors were big name pioneers in the industry, that were taken down by 101 and prior art challenges. The quality of a patent has about as much to do with how well it was prosecuted than who it came from or who was listed as an inventor. This stuff about a “halo effect” is nonsense.

    Most companies do not take licenses to enhance their own prestige, but to ward off a potential threat to their business. The garbage patent held by an Acacia troll who credibly threatens to sue in E.D. Tex. is far more likely to get licensed than a groundbreaking portfolio from a company that, everyone knows, is most likely not going to enforce it.

  3. Justice Kennedy: While we now may be coming to the realization that the Cyber Age is a revolution of historic proportions, we cannot appreciate yet its full dimensions and vast potential to alter how we think, express ourselves, and define who we want to be. The forces and directions of the Internet are so new, so protean, and so far reaching that courts must be conscious that what they say today might be obsolete tomorrow.

    This case is one of the first this Court has taken to address the relationship between the First Amendment and the modern Internet. As a result, the Court must exercise extreme caution before suggesting that the First Amendment provides scant protection for access to vast networks in that medium.

    Oh, that’s going to leave a mark.

      1. The context is that it’s 2017 and someone kind of important is stating an obvious truth, although it’s about 20 years too late.

        1. Water is still wet.

          It’s 2017, and that is still kind of important, it is still and obvious truth, and it is way more than 29 years “too late” (whatever that means).

          And it has every bit as much relevancy to a patent blog as the items that you seem to like to post.

          We all know why you do not post on patent law items (you lack the where-with-all to actually inte11ectually honestly discuss them), but please try harder to post things that actually deal (in more than the slimmest mots tenuous manners) with patent law.

      2. He’s just saying that a judge seems to agree with him that the first amendment might be said to assure people access to the medium of the interbuts/networks thereon via its “protections”.

        1. Not just “a judge”. Most Justices on the Supreme Court signed onto this. The exception was … Sammy.

          And it does cue up a wide range of issues that we’ve been discussing here for many years. Importantly, it seems to cue them up in a way that is extremely favorable to those of us who prefer a strong barrier to the use of patents to control who gets to use fundamental communication technology like “a computer connected to other computers” and what kind of information gets transmitted over networked computers.

          Anyway, it’s not a surprising development. It’s only surprising that it took so long for the Supremes to lay out the relationship between the Internet and the First Amendment so forcefully and plainly.

          1. Some people try to restrict other people’s access with patents. Which MM has been btching about constantly for the last year, you must have missed it.

            1. I have not missed his badly errant assertions that patents block such things as “thinking about” – if that us what you mean.

              But just as those assertions have been universally errant, here too, there is just no intersection.

            2. please pardon potential (re)post:

              I have not missed his badly errant assertions that patents block such things as “thinking about” – if that us what you mean.

              But just as those assertions have been universally errant, here too, there is just no intersection.

        2. Not just “a judge”. Most Justices on the Supreme Court signed onto this. The exception was … Sammy.

          And it does cue up a wide range of issues that we’ve been discussing here for many years. Importantly, it seems to cue them up in a way that is extremely favorable to those of us who prefer a strong barrier to the use of patents to control who gets to use fundamental communication technology like “a computer connected to other computers” and what kind of information gets transmitted over networked computers.

          Anyway, it’s not a surprising development. It’s only surprising that it took so long for the Supremes to lay out the relationship between the Internet and the First Amendment so forcefully and plainly.

          1. You appear to be stuck (once again) in “not understanding” the simple set theory of the exceptions to the judicial doctrine of printed matter – and what it means to be functionally related.

            See 6.1.2.1.1.1.

            1. the simple set theory

              aka “L00ney Tunes Hour for the Ment@lly Challenged”.

              Keep the laughs coming, “anon.” Nobody knows what you’re talking about. And nobody cares.

                1. The obvious conclusion to draw from Uber’s crisis and Tesla’s Autopilot struggles is that the disruption of transportation so enthusiastically cheered by the tech industry was ridiculously overblown. And it wasn’t confined to Tesla and Uber.

                  Hey “anon”: take your “disruptive tech” bal0 ney and shove it.

                  The enire tech “industry” is overblown. That was easy to see from the moment that the worlds worst patent attorneys got invovled in it.

                2. Hey “anon”: take your “disruptive tech” bal0 ney and shove it.

                  Do you have a clue as to what you are whining about?

      1. why are you so consistently on the side of vested interests

        Not sure what you’re getting at. Who are the “vested interests” and what does it mean to be “consistently on their side”?

    1. Researchers find that Americans are particularly skittish about giving up control of a vehicle to an automated system, but a new study says car buyers are now simply fed up with semi-autonomous features like lane-departure assist and adaptive cruise control, the Wall Street Journal reports.

      As part of J.D. Power’s annual Initial Quality Study, the Journal says car buyers reported being “increasingly dissatisfied with the semiautonomous features showing up on vehicles.”

      Because most drivers have a better idea of what they want to do and how they want to do it than a “computer with sensors” ever will. See, e.g., “word recommend” software which has been around for a long time and it still totally sxcks. Of course, nobody gets killed when the computer puts in “shell” instead of “smell.”

  4. Uber’s business model is predicated on lawbreaking. And having grown through intentional illegality, Uber can’t easily pivot toward following the rules….

    Uber’s most distinctive capabilities focused on defending its illegality. Uber built up staff, procedures, and software systems whose purpose was to enable and mobilize passengers and drivers to lobby regulators and legislators — creating political disaster for anyone who questioned Uber’s approach. The company’s phalanx of attorneys brought arguments perfected from prior disputes, whereas each jurisdiction approached Uber independently and from a blank slate, usually with a modest litigation team….

    If we allow an illegal business model to flourish in one sector, soon businesses in that sector and others will see that the shrewd strategy is to ignore the law, seek forgiveness rather than permission, and hope for the best.

    But … disruptive technology!

    Seriously, this is a race to the bottom that we’ve seen before. These same kinds of people melted down the patent system. And they’re still trying to melt it down. They’re horrible people. Bottom feeders and grifters. And not very smart, either.

    1. I think this is a point about rent seeking:
      ‘Uber’ manipulates hired car industry regulations to make excess profits
      ‘Grifters’ manipulate the patent system to make excess profits.

      It is a bad analogy because Uber was able to offer a better product at a lower price by avoiding a rent seeking strategy.

      1. It’s a bad analogy period.

        Malcolm’s entire “zeitgeist” is against anyone wanting in any way to profit from patents.

        He is simply in the wrong profession, and as I have noted, the cognitive dissonance generated by someone whose philosophy is anti-marking money with personal property whose (self-professed) job it is to generate those self-same items of personal property, leaves a palpable negativity that affects EVERYTHING that Malcolm ever writes.

      2. Or maybe MM means it the other may around:

        ‘Uber’ is bravely defeating rent seekers by opposing unneeded regulations.

        The HBR author here is defending rent seekers unnatural profits the same way grifty patent owners defend their profits.

        ‘But … disruptive technology!’ does not seem to fit anywhere though, it might as well be ‘Free Silver!’ or ’54 40 or fight’

          1. ‘grifty’ is the adjective form of ‘grifter’ i.e. behaving like or having the characteristics of a ‘grifter’. Grifter in turn means ‘a practitioner of confidence tricks’.

            For example an inventor is walking into the patent office holding his application in his hand. A grifter comes up to him and says ‘Don’t hold that in your hand, someone could steal it. Hand it to me and I’ll show you what I do.’ The inventor hands the application over and the grifter hides the application in his pants and says ‘See, your safe now. Let me give you your application back.’ The grifter apparently pulls the real application back out of his pants but really pulls out a different fake application he had hidden earlier. The inventor does not discover the switch until too late and because of first to file, the grifter is able to steal the invention. This is why grifters are bad for patents.

      3. Uber was able to offer a better product at a lower price by avoiding a rent seeking strategy

        Uber offers nothing “better”. It’s an invester subsidized scheme that “works” only because of the advantages obtained by avoiding the law.

        You really think that using a computer to figure out where the nearest taxi is was an invention? Please.

        1. Are you trying to say:

          “The New York taxi commission is the only branch of government constitutionally allowed to regulate hired car prices. When the courts step in and allow Uber to operate, they are clearly legislating beyond their granted authority”

          Are you sure you are not anon today :-) ?


    2. Researchers find that Americans are particularly skittish about giving up control of a vehicle to an automated system, but a new study says car buyers are now simply fed up with semi-autonomous features like lane-departure assist and adaptive cruise control, the Wall Street Journal reports.

      As part of J.D. Power’s annual Initial Quality Study, the Journal says car buyers reported being “increasingly dissatisfied with the semiautonomous features showing up on vehicles.”

      Because most drivers have a better idea of what they want to do and how they want to do it than a “computer with sensors” ever will. See, e.g., “word recommend” software which has been around for a long time and it still totally sxcks. Of course, nobody gets killed when the computer puts in “shell” instead of “smell.”

    3. The only escape for Uber imagined by Kalanick was to delete drivers and their wages from the picture through the development of autonomous vehicles. But it is increasingly clear that this is another massive gamble that Uber cannot win, at least not in time to save itself. Most experts, including those previously bullish on self-driving technology such as the Economist magazine, have recognized that autonomous vehicles are at least 20 years from fruition./

      Try fifty. Or more. And that’s with the help of massive amounts of infrastructure that will paid for by … who? By the people who can’t afford the cars? LOL Republikkkans will have fun with that one.

      But, hey, people here told us that in 20 years we’ll have robots conducting patent litigation trials. They told us that two years ago.

      LOL

  5. Simon Tam: It’s a win for all marginalized groups.

    LOL

    No. It’s definitely not that. It’s not even a “win” for your “marginalized group.” Definitely a personal victory, though. Now you can get that super huge recording contract that was so totally out of reach for you until just now.

    LOL

    1. Oh, I forgot, Simon: the “marginalized” ultra wealthy white owner of the Redskins is super excited by all this. He’ll call you after his private jet has landed. So grateful to be welcomed back into the fold.

      1. I really wish that you Malcolm would not blindly expound on your feelings. Have you ever heard of the Tam story, their background and exactly why they persevered with their efforts?

        It is clear that you have not (not that has ever stopped you from your ad hominem v0m1t fests before)…

        1. Have you ever heard of the Tam story, their background and exactly why they persevered with their efforts?

          Yes, like twenty times. It’s mostly horseshirt.

          The number one reason for perservering is publicity. That’s what this is about.

          It’s not about “free speech” and it’s not about “marginalized” groups. It’s also not about small time “indie” musicians because most of them could care less about registering a trademark on their band name. Go ahead and guess why that’s the case. Go ahead, “anon.” You’re a very serious person so I’m sure you’ve thought about this a lot and very very deeply.

          1. There you go again – deflecting and wanting others to “do the work,” when it is you that needs to come up to speed with reality.

            Step outside your feelings and please do some critical thinking.

            1. We call read the thread, “anon.” I just answered a question that you asked me, and I responded to your insult. And I asked you a question in return.

              Then you mewled.

              1. You think that i mewled when all that you did was spout feelings and ad hominem and asked a bogus question …?

                Ignored the bogus question and rightfully so. There was no mewling present.

                You touch with reality is quite absent Malcolm.

        1. He should just buy up all the tickets to all of Tam’s shows for the next few years so that Tam sells out and just give them to people that want to come.

  6. There are at least three very different patent licensing situations, with very different factors: (1) trying to license someone, maybe a venture capitalist, to take the risk of making a whole new product based on the patent, (2) licensing someone with a patent on an improvement in their existing products, or (3) asserting [for getting a settlement licence payment] a patent allegedly infringed by an existing product.
    In almost all cases the potential licensee is likely to do a prior art search irrespective of the prestige of the patentee before paying, and I suggest that the [now greatly increased] scenario number (3) patent owner is far more likely to get hit with an IPR irrespective of the prestige of the patentee.

  7. a groundbreaking patent might be ignored … if it is from a lesser known licensor.

    Would love to see an example of one of these “groundbreaking” patents that was “ignored” because “licensor was lesser known.”

    Regardless, the reality of the situation — which is the reality we all live in — is undeniable. People look for certain traits in other people. Certain kinds of people tend to stick together. All of this is entirely consistent with the fact that the patent maximalist types are mostly a pack of ign 0rant anti-s0cial @-holes with a sense of entitlement that is overblown to a point beyond parody.

    1. Re: “Would love to see an example of one of these “groundbreaking” patents that was “ignored” because “licensor was lesser known.”

      That was easy – Chester Carlson’s xerographic patent is a prime example, of many. See the patent suit jury decision against Sears on today’s IPWatchdog for another.

      1. Please. That wrench patent was not “ignored” by Sears. Sears gave the patentee a ton of money prior to their attempt to work-around.

        And I don’t see anything in the wiki entry on Carlson that suggests his patents were “ignored” by anyone either. On the contrary, “competitors such as Kodak and 3M brought out their own copying devices using other technologies.” link to en.wikipedia.org

        Also noteworthy, from Carlson’s wiki page: The company’s patent department wanted to trademark “xerography;” Haloid’s head of sales and advertising, John Hartnett, vetoed the idea: “Don’t do that. We want people to use the word.”

        Poor John Hartnett. He didn’t learn to be greedy enough, quickly enough.

        1. That is a gross distortion – it was years before one small company named Haloid took a big gamble on Carlson’s xerography patents. 3M Thermofax then died. Kodak didn’t even get into xerography until Haloid [now Xerox] had been a huge xerographic products company for several years.

          1. Is there evidence that these big companies knew about Carlson’s patents before they embarked on their own ventures? If not, it seems difficult to argue that Carlson’s patents were “ignored.” And even if so, it’s possible they were “ignored” for reasons that have nothing to do with Carlson’s lack of a reputation.

            Haloid took a “big gamble” because, presumably, they figured out how they might possibly make money off the tech. At that point (when they figured out how they might possibly make money) I doubt they cared about Carlson’s reputation.

            1. Yes, in fact IBM even did a marketing study for xerography in response to Chester Carlson’s [who, BTW, was also a patent attorney] patents and prototypes. That marketing study concluded there was too small a market to be worth entering. Then, years later, after seeing the great success of Xerox, IBM tried to get into the xerographic business without paying for a license and was successfully sued.

              1. That marketing study concluded there was too small a market to be worth entering.

                So nothing about a ‘lack of reputation.”

                And in fact the market was small. It appears it was a single Big Co’s (Ford, as I recall) purchase of the machines that kept the company afloat for quite a while. That was just luck. But note: Ford didn’t “ignore” the tech or the patents.

      2. Here’s my take: valuable “groundbreaking” patents are not “ignored” just because the licensor is “lesser known”. But the “lesser known” licensor will be more inclined to whine about David and Goliath because fee-fees and because everybody loves a good underdog story. In contrast, Big Company X isn’t going to be as inclined to cry about its relatively small stick when Even Bigger Company Y “ignores” it because that just looks like what it is: a big business whining about big business.

        1. Some courts and many juries also evidence sympathy for the “underdog” in patent cases. Large company legal departments are almost always more worried about getting sued on either patents or alleged trade secrets by small inventors or privately owned companies. They are more likely to be emotionally involved in their asserted inventions, as well as more likely to get jury or judge sympathy. Unfortunately these concerns are one of the reasons large companies are often reluctant to even consider outside ideas, and almost always refuse to consider them on a confidential basis.

    2. Speaking of “the reality of the situation,” I am curious as to how much of that four fold jump is related to (gasp) software innovations…

      But let’s v0m1t the typical Malcolm ad hominem out there anyway.

      Yay ecosystem.

      1. I am curious as to how much of that four fold jump is related to (gasp) software “innovations”…

        Let’s assume all of this “estimated value” is the result of investors gambling on junky logic patents and even junkier “business methods” based on those junky logic patents (“hail a cab — with a computer! — wowee zoweee!”).

        So. What.

        1. Lol – now that money is but “gambling”….

          You really need to get into a line of work in which you can believe in the work product produced. The cognitive dissonance is palpable.

          That’s. So. What.

          1. now that money is but “gambling”….

            Well, in the case of most junky logic patents, it’s also about lobbying for laws and special privileges that make it harder for other entrants to compete, and easier to reach that elusive monopoly status. And subsidizing the venture all the while, of course. Get the users hooked, then once you’ve got the monopoly, start lowering the quality and upping the ads in the face.

            Maybe you don’t subscribe to a cable or internet service, so all this is unfamiliar to you.

            1. lobbying for laws and special privileges

              LOL – except the patent system was already in place.

              You need to read (and maybe try to understand) that simple Set theory explication (yes written in concise English with short declarative sentences) that debunks your attempted script about “junky logic patents

              Then tell me how is your project coming along on copyrighting logic.

              (and yes, we both know there is no such project and we both know why, but you still seem intent on obfuscating about that point)

              1. A big part of Uber’s perceived value has been attached to the notion that autonomous vehicle technology will enable the company to slough off its (human) driver cost-base entirely, i.e. not just by (as it does now) minimizing employment costs by using — some would say exploiting — low paid, ‘freelance contractors’ who do the actual work of driving people from A to B.

                LOL

                How’s that “self driving car” tech working out?

                LOLOLOL

                So many sxckers. So little time.

                1. Nice strawman – as none of my positions have ever revolved around Uber, and your 0bsessi0n with “self driving car” tech has nothing to do with the concept of destructive innovation or with your fallacy of “logic.”

                  Do you need me to provide the definition of “strawman” yet again?

                  You are just v0m1ting
                  C
                  R
                  P
                  off of your short script here.

      1. Indeed. Farnsworth was real inventor of the first commercial television technology.
        Also, Col. Armstrong, inventor of FM radio, and major AM radio improvements before that.
        [But RCA fought both tooth and nail.]

        Ray Dolby was highly successful.

Comments are closed.