Patents, licences and random musings

Now let me think ...

After posting sundry musings about patents and licensing, loosely pinned to his reflections on LexisNexis's forthcoming "Licensing Patents & Know-How" conference ( Millennium Mayfair Hotel, Londonn 17 February), the IPKat has received various patent-licence-related items from kind persons who obviously, and probably correctly, feel that his education on the subject would not be harmed by a little extra current reading.

The Kat has also rceived some interesting thoughts from readers relating to patent licensing.  One addresses the issue of "pay-to-delay" patent settlements, which are currently the subject of both controversy and litigation in the United States. The idea is simple and ingenious: patent owners pay generic pharma manufacturers not to challenge the validity of their patents, thus enabling them to continue exploiting their monopolies but effectively sharing the proceeds with what would otherwise be a competitor. Some people think this is a great way to sort out a problem in a way which makes everyone happy except purchasers of cheap generic drugs and enthusiasts of competition law who say that this is all wrong: since patents are presumed valid until proven to the contrary, it doesn't look very brave for big companies to hide behind their presumed weakness as a justification for buying off a prospective challenger -- and isn't there a Sherman Act somewhere about?  So perhaps the solution is not to buy off a challenger but to sell the challenger the patent and buy back an exclusive licence to manufacture, on much the same terms?  The IPKat thinks there may be problems here too, but at least they're couched in different terms.  The Kat now sees that licensing has already been thought of in the context of pay-to-delay, is is apparent from the application for certiorari in Louisiana Wholesale v Bayer (here).

Another reader has, just for the sake of curiosity, raised the issue of non-disclosure agreements.  She was reading the Wikipedia entry on NDAs and observed that they are not characterised there as being licences. But, she insisted, they really should be regarded as such, at least where they permit the use of the licensed confidential information for the purposes attached to the disclosure -- evaluating its technical efficacy, costing out potential use in manufacture, and so on.  The IPKat's keeping an open mind on this one, though he's somewhat doubtful about the proposition -- and he's not sure whether, in the case of NDAs, their characterisation as a licence or not is a distinction without a difference.

You can check out the agenda of Patents and Know-How here, inspect the speakers' credentials here and download the brochure here.

Licensing Patents & Know-How: one programme, many questions ...

The Kats take an interest
in BRIC licensing ...

Even though he's not on the conference programme, or perhaps because he isn't, the IPKat is intrigued by some of the content of a forthcoming LexisNexis one-day conference, "Licensing Patents & Know-How", which takes place in London's Millennium Mayfair Hotel on 17 February. One of the sessions is entitled " Hints and tips on patents and know-how licensing in BRIC countries". BRIC, the Kat explains for the benefit of first-timers, is not a spelling mistake for BRICK, stands for four markets which are rapidly growing through inward IP investment and outward sales -- Brazil, Russia, India and China -- and this is the first time he has seen BRIC licensing described as a topic all on its own. He had quietly cherished the notion that the four countries named were so very different in their legal culture, market dynamics and commercial practices that it would be difficult to draw any general conclusions and give any advice more specific than "Watch out!"  Drawing on his memory of LES conferences from the distant past, this Kat recalls that one issue that IP owners might want to consider is how on earth to repatriate royalties earned through BRIC licensing: one way to help grow a flourishing economy is to attract foreign technology but let more money in than out.  He wonders if this is still the case.

Another topic under analysis on this programme is the interface of patent licensing and competition here, a topic that has fallen to the IPKat's friend, barrister Jonathan D. C. Turner. A man whose eye is closely focused on the subject (his book on this very topic will soon approach its first birthday), Jonathan has the task of selling the Technology Transfer Block Exemption (TTBE: Regulation 772/2004) to an audience which will surely contain many of the unconverted. Jonathan offers to enable conference participants to find a "path through the forest".  Some folk will probably jump at the thought of a way to ascertain whether their patent licences can safely be regarded as non-anticompetitive, so they and their investors can sleep peacefully at night.  Others may say (as indeed some do) that if the forest is so difficult to find a path through, there's a good chance that the European Commission's competition chaps can't find a path through it either.

A third topic that caught this Kat's eye is the presentation by Paul Brown Hogan Lovells LLP) on the transactional dimension: is it better to license than to sell a patent, what are the current criteria -- and what if anything is the impact of the patent auction?  It is this Kat's firm contention that the reason why patent auctions have been so unsuccessful to date is that, in the main, (i) patent owners only auction their patents if they can't find a better and more profitable way of selling them, and (ii) there's no point in anyone buying a patent at auction unless it fits their immediate manufacturing or R&D needs or they are playing Monopoly and hope that someone will land on their property after they've bought it so they can earn some rent. The position would change if entire, fully-functioning and profit-generating patent and know-how portfolios were auctioned as single lots, with prospective bidders being able to get some idea of their value.

You can check out the day's agenda here, inspect the speakers' credentials here and download the brochure here.