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Tuesday, November 21, 2006

EPO-OECD-UKPO International Conference on Patents: Realising and Securing Value.

Tonight I am blogging from London. Over the day I had attended

a conference titled "EPO-OECD-UKPO international conference on patents: realising and securing value" and jointly organised by the

EPO,

UK Patent Office and

OECD. A brief quote from the conference invitation:

"[...] Description

This conference will critically assess the challenges facing the financial sector in coping with the emerging opportunities and risks in valuing, trading and securing patents. The financial tools used to protect patents and maximise their value will be examined and appraised.

Patents are a source of revenue via licensing and sale, are used as a bargaining chip in negotiations and are used to attract external financing. Furthermore, patents increasingly appear as assets on the balance sheet.

This event is a follow-up to the conference held in Berlin on 30 June & 1 July 2005: Intellectual Property as an economic asset: key issues in valuation and exploitation. It attracted an audience of over 200 people, including some of the world's leading policy-makers, economists and IP experts.

Objectives

To create an ideal platform for sharing the latest thinking in patent valuation and securitisation, examining current trends and assessing the likely changes for the future. [...]"

Presentations have been given,

inter alia, on the following topics:

Appreciating the value of IP in Growth Companies: VC investor perspectives
Valuing patents and licenses from a business-strategy perspective
Entering the patent arena
Patents - From collaterals to assets
Developing patent markets and auctions - US, Europe and Asia
Monetisation of IP in the context of IFRS
Managing risk to maximise patent value
IP holding jurisdictions - a comparative analysis
Insurance for economic loss
Insurance for litigation and liability risks
The need for a patent litigation insurance scheme

The conference had been announced as of particular importance, and indeed some political heavyweights were on the list of speakers. However,

Lord Sainsbury of Turville, UK Parliamentary Under Secretary of State for Science and Innovation, did not appear due to his recent

resignation from Office. On the top level,

Mr. Alain Pompidou, President of the European Patent Office, not only served on one of the panels but also actively participated in the conference up to its closure.

I won't go into the details of the various presentations and other contributions here: the EPO has pledged to provide the related materials of the conference on its website within a week or so.

The subject-matter of the conference seemed to be of some strategic importance: The organisers appeared to be eager to demonstrate the functioning of the patent system in a globalised economy in a very detailed view but with a broad scope going well beyond perceiving the Patent Offices merely as some sort of "patent factories" producing mass-series of patents, one after the other. However, contrary to some theories of anti-patent campaigners (which were, after all, not present at this conference). Re-iterating over and over again that the quality of patent examination is absolutely crucial the various experts from finance and insurance fields presented their approaches to potentials and problems of the patent system.

In my view it eventually become clear that we are living in exciting times: Slowly but steadily the static patent system of the 20th century is about to be replaced by some more dynamic dealing with IP values as actively utilised assets that can (and will) be traded with low transaction costs. For example, creating functioning markets for patents with substantial liquidity is a challenge, and some of the presentations were tackling this problem from one perspective or another. Another point was the field of patent insurances where experts from the insurance sector explained their views, thereby mostly rejecting or at least challenging a view according to which such insurance schemes can be successful

only if they are made mandatory.

Patent Attorneys should be well aware that some of the developments sketched during the conference might - in some future, maybe in ten or fifteen years - well affect their business environment in which they operate. Maybe that later on in particular SMEs might prefer to make their deals concerning patenting of inventions no longer primarily with their local patent attorney but with some sort of a patent holding company (maybe even based on third-party money), buying inventions, doing the prosecution work in-house or, at their discretion, by outsourcing to patent attorneys, and perhaps (re-)licensing the resulting patents.

Mr. Pompidou, in an intervention after a presentation of another speaker, openly addressed this point by asking some panelists what they would think of the idea that a new sort of counsel might be emerging one day at the side of patent attorneys, this counsel guiding the client through the economic aspects of the patent utilisation, but no conclusion was reached. But I am convinced that time has come for patent attorneys not only to think about the law but also of the role of patents as economic assets.

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