Welcome to the NAIP's English-language blog on IP-related news and topics for inventors, engineers, companies and patent professionals in Asia. As we get started, feel free to share your thoughts, comments or any suggestions, and check back often for the latest updates.

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11/28/2008 IP News & Blog Round-Up

  • Think Godzilla's Scary? Meet His Lawyers. - A fascinating article detailing some of the lengths that Godzilla trademark and copyright holder Toho has gone to protect the cult classic monster's image--and the company's profits. (from Wired)
  • Do big corporations secretly support Patent Trolls? - In a way, yes. According to this article, patent trolls, or NPEs, are not just easy scapegoats and targets for negative media, but are also helping make it harder for small companies to compete. (from Patent Fools)
  • How To Go To China For Innovation. - A summary of a Business Week article here, that suggests four steps to keeping pace with innovation in Asia: 1) Globalize your research and innovation; 2) Devise a "talent strategy" up front; 3) Protect intellectual property; and 4) Shift R&D responsibilities away from your home country to global centers. (from China Law Blog)
  • IP is a key to an Indian and Chinese challenge of US leadership. - IAM blogs that India and China will only fulfill their potential if they can match the US on IP--something a recent report released by the US National Intelligence Council (NIC) reports is still a long way off--although they may match the US in some areas in a few as 10 years. Download the NIC report here. (from IAM Magazine)


This week RPX released a wealth of new details about its business model on its website, and much discussion is already occurring on the web (and likely in business board meetings as well). Read the updates here.


11/21/2008 IP News & Blog Round-Up

  • China Gets Grilled on Copyright Law. - And by the US, Japan, EU and Canada. As part of its ascension to the WTO, China undergoes an annual Transitional Review Mechanism (TRM) by the TRIPs Council. IP Dragon reports on some the QA session. (from IP Dragon)
  • What if geniuses just got lucky? - Malcolm Gladwell brings new attention to the argument that many geniuses are more the product of society than their own talent. See how he applies this theory to inventors and IP in an earlier article here. (from Newsweek)
  • One of Obama's transition team members has strong ideas on the US Patent System. - Among them: completely scrapping the system. Slashing the number of patents granted by 90%. And tripling the USPTO budget. (From 271 Patent)


Photos from SIPO
In another step toward stronger economic relations between China and Taiwan, a historic conference on cross-strait patent issues is being held this week at the National Center for Traditional Arts in Ilan, Taiwan.

From November 16th to 23rd, members of China's State Intellectual Property Office (SIPO), Taiwan's Intellectual Property Office (TIPO), IP scholars and industry professionals will convene for informal discussions and a formal two-day forum on cross-strait patent issues.

Nine high-ranking officials from SIPO, including Deputy Director Li Yuguang have flown to Taiwan to join the conference. TIPO officials, including Director Wang Mei Hua will also participate, marking the first time these high-ranked officials will have met for face-to-face discussions.

The stated goals of the conference include enabling better understanding of each side's IP protection and regulation systems; sharing experiences with patent examination, examiner training, and quality control issues; and building a channel for communication.

At the forum and during discussions, the two sides will put forward and discuss three topics: mutual recognition of patent examination results; mutual recognition of priority rights; and allowing Taiwanese citizens to participate in the qualifying examination for Mainland China patent agents.

However, during this meeting, officials expect only to first proceed with administrative-related issues, including formal establishment of cross-strait relations within the offices; beginning formal correspondence and business relations; creating a channel for exchange of documents, and so on.

The forum, held on November 18th to 19th, and the discussions, ending on the 23rd, were organized and run by Taiwan's Chinese National Federation of Industries (CNFI) on behalf of the Ministry of Economic Affairs.


11/14/2008 IP News & Blog Round-Up

  • As an attempt at reducing backlogs and duplication of work, Patent office teamwork intensifies. - The patent offices of the US, Europe, Japan, Korea and China has recently joined forces to improve efficiency in the time, quality and amount of patents prosecuted at the various patent offices. For more on the activities planned by this cooperation, read here.
  • Hopes for a single European patent jurisdiction fading fast. - The clock is ticking away for France's European Presidency (ends 31st of December) and the prospect of having a single European Patent under French rule is dull. To make things even more complicated, the Spanish are adamant about language issues regarding such proposed community patent and smaller states are worried about the fee structure of the community patent. Read here for more on the status of the European Community Patent.
  • Keep up with amendments to the Implementing Regulations to the European Patent Convention. - For a concise discussion of the amendments taken by the Administrative Council on the 21st of October 2008, read here.


Photo by Redvers: http://www.flickr.com/photos/j-no/2876709608/
By Jeffrey Chang

(Updated with new details from RPX 11/27/2008)

The past few years has seen the introduction of several controversial participants to the global patent ecosystem. The most well known, Intellectual Ventures (IV), has already grown to become a several billion-dollar operation, and just recently has announced an expansion into Asia. 2008 has also seen organizations like Allied Security Trust (AST) and RPX emerge, with both boasting substantial capital funding.

Who exactly are these participants? They call themselves patent trusts, patent acquisition services companies and patent investment funds. Others have called them patent trolls, anti-patent trolls, patent buying cooperatives, and so on. But regardless of who they are and what they are called, they are undoubtedly a growing power in the global IP industry—major players who will shape the future of IP.

"Non-Traditional Participants"

In contrast to "traditional" participants (such as inventors, engineers, agents and lawyers), IV, AST and RPX are more similar to non-practicing entities (NPE), patent pools and other “non-traditional” participants. Yet because these organizations are relatively new, they do not settle cleanly into these existing classifications.

    Intellectual Ventures
Founded in 2002 by former Microsoft CTO Nathan Myrvhold, Intellectual Ventures claims to be an "Invention Company" whose purpose is "highlighting the business of invention and providing a means for inventors to be fairly compensated for their work." IV does not manufacture or produce any products (the patent or patent portfolio is the product), and develops patents internally or acquires them through (often clandestine) deals. The IV website states that eventually they will market and assert their patents on a "broad and non-exclusive basis."

Details are scarce as to where IV acquires funding for these activities, but major contributors include Microsoft, Intel, Sony, Google and so on. These mega-corporations signed on initially due to IV's unique proposition: IV would apply for and acquire patents as a preventative measure against patent trolls. The corporations would additionally be required to license any patents they used, but they would also share in the profits this "patent hedge fund" would produce.

    Allied Security Trust
In 2008, a group consisting of Verizon, Cisco, Google, Telefon AB L.M., Ericssson, HP and five other major high tech heavyweights founded the Allied Security Trust. AST's stated purpose is to address "the increasing need for innovative companies to defend against costly patent law suits." Like Intellectual Ventures, AST does not produce or manufacture. But unlike IV, AST only purchases patents, and does so in order to grant the member companies non-exclusive licenses. AST has stated it will not assert patents against other companies and all patents are resold into the market after a period of time.

Corporations become a part of AST by paying US$500,000 membership fee and contributing US$5 million into a fund to purchase patents. Profits are not a goal. In fact, AST is attempting to inoculate its member companies from potential infringement suits.

    Rational Patent Exchange
RPX made a big splash in September of 2008 by announcing it had acquired funding from top investment firms Charles River Ventures and Kleiner Perkins Caufield & Buyer. Few had known about RPX prior to the announcement, and many were surprised to hear a number of details, including: 1) the founders are ex-Intellectual Ventures bigwigs John Amster and Geoffrey Barker; 2) they plan to purchase US$100 million in patents & patent applications; 3) they already have US$30 million.

RPX, a "patent acquisition services" company, has not elucidated its business model, but according to statements from Amster and the company's own communication materials, RPX will acquire patents to prevent NPEs from asserting them against operating companies. RPX will not develop these patents, but neither will it assert them against other companies. Instead RPX will generate revenues from licensing and selling the patents, which will be critical to their continued operation because RPX "does not expect to seek other direct equity investments either from venture capitalists or high tech companies."

(Update 11/27/2008)
RPX describes its business as "Defensive Patent Aggregation" club. RPX will act independently to purchase patents that would presumably otherwise be purchased and asserted by NPE / Patent trolls. Then companies pay an "annual fee to have a license to all patents and associated rights in the aggregation." This fee is between $35,000 and US$4.9 million a year, dependent on the company's operating income. Over time, a member would eventually gain rights to patents in perpetuity, whether they continue to pay membership or not (they may also purchase the rights for a one time fee).

Founder John Amster as stated that RPX "needs at least 20 members to remain cash-flow positive." Currently, mega-corporations IBM and Cisco have signed up, significantly raising the RPX's credibility. RPX will focus on IT, software, e-commerce, mobile communications, networking, and consumer electronics device patents.

Compared Against Existing Non-Traditional Participants
Intellectual Ventures (IV) is most like...
Non-Practicing Entities
A patent owner who does not manufacture or use the patented invention, but rather than abandoning the right to exclude, an NPE seeks to enforce its right through the negotiation of licenses and litigation..Holds tens of thousands of patents
.Manages patents into "funds" for investors
.Licensees can also buy into these patent funds
.Has not yet engaged in litigation

RPX is most like...
Patent Holding Companies
Companies set up to administer, consolidate and license patents or otherwise enforce patent rights, such as through litigation.Will offer services on behalf of, but not be a part, of any specified company
.Major investors are a group of venture capitalists, not patentees
."An affordable service model that reduces the threat of assertion and litigation and provides efficient patent protection to subscribing companies."
*See updates

Allied Security Trust (AST) is most like...
Patent Pools
Consortiums of at least two companies agreeing to cross-license patents relating to a particular technology..Acquiring mutually-beneficial patents, not cross-licensing, is the main goal
.Non-exclusive licensing rights of patents purchased are granted to members
.Patents are re-sold into the market
.Does not engage in litigation


What really sets each of these entities apart from previous "non-traditional participants", however, is the purpose and intent of their existence. Each has, at one point or another, (including IV) been hailed or proclaimed itself as the Anti-Patent Troll. One of the principle philosophies behind companies like IV and AST was that buying (or innovating) critical patents would be taking a potential weapon-of-mass-litigation out of the market equation. This position helped these organizations raise hundreds of millions of dollars from corporations.

But for all the rhetoric, many remain suspicious. Indeed, patents are not being removed from any equation; they are just changing hands from unknown variable to known variable. Intellectual Ventures, which was initially called the "Patent Defense Fund", eventually dropped the moniker and business model in favor of "Intellectual Ventures" and a private equity model. Today IV holds over US$5billion worth of patents and extracts hundreds of millions in licensing fees a year. Recent news reports have suggested the licensees are not very happy 1 and Internet blogs and forums constantly post fears of licensing Armageddon.

When AST emerged publicly in 2008, and seemingly in response to IV, they sought to allay similar fears through its self-described "Catch & Release" model. After purchasing a patent and granting its members non-exclusive licenses to it, the patents are resold into the market. AST members, in effect, would be inoculated to any potential infringement cases.

However, in this arena, AST competes directly with IV, who has moved more quickly, independently, and often secretly, in purchasing patents. In contrast, industry insiders say AST does not yet have the procedures to act as quickly or efficiently. IAM magazine reports that "purchases have to be given the green light by members before they can happen – something that could potentially mean long delays and lost opportunities." 2

What remains to be seen is the role RPX will serve. Having promised not to assert patents it acquires, and also not rely on VC or corporate funding, the question is how RPX will operate. RPX claims details will come in October 2008, although as of this article's publishing, none have been released.

(Update 11/27/2008)
With respect to some of the shortcomings of both IV and AST, RPX does attempt to address the litigation issue by promising not to assert patents. Also, because RPX will act independently in purchasing patents, they would likely be able to react more quickly to certain "hot" patents than AST. However, RPX's subscription model does raise questions, such as the free-rider problem, which Amster discusses here.


The emergence of Intellectual Ventures, Allied Security Trust, and Rational Patent Exchange is just the beginning of a new era in IP. Today the market views IP ever more as an asset that can be traded and as a weapon that can be astonishingly effective. As a result, traditional participants in the industry have had to make adjustments, sometimes difficult ones, to adapt to the rise of NPEs, patent holding companies and patent pools and now, new organizations like IV, AST and RPX.

The next logical questions then, concern the effect these organizations will have on the industry. How will large corporations, who have financed these entities, react to ever increasing licensing payments? What of small inventors and businesses? Are these entities a form of anti-competitive measures by big business, as theorized by one blogger?3 Or will they provide inventors with better, fairer compensation? Will this ultimately provide consumers with more choices and lower prices because corporations have better access to technologies and fewer litigation suits? Or will it mean fewer choices and higher prices because corporations will be paying licensing fees that they may have traditionally ignored in the past. And finally, for our readers, what will be the affect in Asia, especially now since IV has expanded into the region.

Whatever the answers, all players and participants in the IP industry would be wise to keep an eye on the shift that is occurring—one that is already changing the way we look at innovation and intellectual property, and already changing the foundations of the IP industry.

Relevant Links:



11/07/2008 IP News & Blog Round-Up

  • What IP challenges face Barack Obama? Well, appointment of a new USPTO director and IP Czar, the Patent Reform Act and USTR Special 301, among many others. This article lists some of the most pressing issues and also links to Obama's official statement on technology here. (from IAM)
  • For those interested in EU, How to get a European patent - Pt 2. Recently updated, this "Euro-PCT Guide" covers procedure when the EPO acts as a receiving office, international searching authority, international preliminary examining authority, or designated/elected office. Find out more in Pt. 1
  • Despite the downward spiraling economy, "It's No Time to Forget About Innovation". An article with a treasure trove of quotes, including "The last thing you want to do with innovation is just throw money at it. It’s a very tricky balance", "hard times can be the source of innovative inspiration" and a personal favorite, "Creativity doesn't care about economic downturns.” (from NYTimes)
  • Production slowing you down? Try self replication. By coating micrometer-sized particles of metal, glass or plastic with specially-encoded DNA, scientists have discovered a way to "induce" those particles to self-assemble in to complex shapes and structures. And since each coated particle has these instructions, production is easily scaled up exponentially. (from New Scientist)


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