In 1993, Ocean Tomo professionals launched the very first dedicated Intellectual Property Strategy consulting practice. Twenty years later, we continue to be at the forefront of IP strategy, helping clients from a broad range of industries effectively manage and optimize their IP portfolios.
The coming year is sure to bring forth new developments and challenges affecting the ways in which business approach IP strategy. Elvir Causevic, Managing Director of Ocean Tomo’s Strategic Advisory Services practice, provides his top IP Trends to Watch in 2013.
Mid-Market Patent Transactions to Increase in Volume
We have seen a marked uptick in activity from operating companies in willingness to strategically sell/license their IP and to acquire IP in the open market or anonymously in 2012, and expect that trend to accelerate. This is especially true of companies with significant patent portfolios but who have traditionally not been in the market in a material way – operating companies with portfolios of 500-5,000 patents. Whether or not there is a bubble at the billion dollar level of IP transactions, the market will likely see a meaningful increase in transactions between $10 and $100 million, while we expect smaller transactions (for a few patents) to remain relatively stable.
IP Litigation Becoming More Sophisticated à Impacting Internal IP Strategy2013 will see more shifts in IP litigation strategies as the market adjusts to AIA and seminal decisions of 2012 (such as Prometheus). More importantly, we expect (finally) the closing of the loop between IP litigation and ongoing daily IP management/strategy to hasten. These have traditionally been two separate processes, even for very large IP owners. It is becoming obvious that clever formal operating IP strategies, when implemented well, can make an enormous difference in litigation avoidance, early settlement, damages, and net overall litigation outcome, for both offensive and defensive purposes.
Software Patents – No Major Changes Just Yet
We expect tensions to rise and rhetoric to continue to build up around scope and treatment of software patents, with powerful players on both sides influencing the discussion. We don’t see any major resolution in 2013, given the life cycle of these kinds of changes, and the arduous process of passing the AIA recently. We expect incremental changes to AIA, as we just saw Congress do in December, and a few important court decisions, while operating companies are not taking any bets and continuing to treat software patents just like any others.
IP Integration Across Business Units
IP as a silo within a firm is still the norm, but we are seeing some signs of leveraging IP more proactively at least in the Business Development, R&D, and Corporate Strategy departments. We expect this initial trend to continue in 2013, which will require an educational effort by in-house IP staff on the value of IP leverage in other parts of the business. Boards learned about IP in 2011 and 2012, and in 2013 that will impact top levels of management as well.
IP Gets a Seat at the Table in Mid-Market M&A Transactions
As buyers and investors are getting more sophisticated about IP (we did a significant portion of our business in 2012 as IP sub-advisors), it has become clear that within an M&A transaction IP is no longer just a due diligence checklist item. Savvy M&A advisors and operating companies will follow the leaders and proactively firm up IP strategies and details, well in advance of beginning the M&A process. On the buy side, IP will be evaluated as a standalone deal element, with both a strategic assessment and a separate financial valuation, to differentiate between deal targets - just as smart money already started doing in 2012.
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