Four Tactics for Monetizing Innovation in Your IP Portfolio

©2015 INNOGRAPHY, INC. : : CONFIDENTIAL 1 ©2015 INNOGRAPHY, INC. : : CONFIDENTIAL AUGUST 17, 2015

Gene Quinn – President at IPWatchDog, Inc.

Michael Gulliford – Founder & Managing Principal – Soryn IP Group

Fatih Ozluturk – Principal, Head of Technology and Innovation at Soryn IP Group

Maneesha Joshi – Data Correlation Engineer at Innography, Inc.

Four Tactics for Monetizing Innovation in your Portfolio

Read the Transcript Watch the Webinar

https://www.innography.com/blog/post/freedom-to-operate-misnomer

https://www.innography.com

https://go.innography.com/2015.07.28FreedomtoOperate_Webinar_OnDemand.html

©2015 INNOGRAPHY, INC. : : CONFIDENTIAL 2

Biometric Technology News Headlines

Next-‐genera*on biometrics market to reach $24.4B by 2020

Fingerprint sensors market to reach $14.5B by 2020

Trac*ca predicts facial recogni*on technology on 122 million devices by 2024

Majority of US banking consumers prefer mobile biometric authen*ca*on over passwords

Voice and speech recogni*on soKware market to reach $5.1B by 2024

Onboard fingerprint readers in mobile devices to exceed 1B shipments a year by 2021

Capaci*ve fingerprint sensors development at all-‐*me high

https://www.innography.com/


Top 20 Companies (US ac*ve patents; Keywords a) biometric and fingerprint b) +“credit card”)

67 61 57

43 34 32 31 26 23 22 19 19 19 18 18 18 17 16 15 13

0 10 20 30 40 50 60 70 80

Patents

10

6 5

4 4 3 3 3 3 3 3

2 2 2 2 2 2 2 2 2

0 2 4 6 8 10 12

Patents



Market Map (US Ac*ve: fingerprint and biometrics as keywords)

0

20

40

60

80

100

120

0 20 40 60 80 100 120

Resources (% Reven

ue + % Loca2

ons +

% Li2ga2o

n)

Vision (% Patents + % Classifica2ons + % Cita2ons)

Apple Inc.

Interna*onal Business Machines Corp. Assa Abloy AB

Fujitsu Limited

Intellectual Ventures Management, LLC Synap*cs, Incorporated

AT&T Inc.

Sony Corpora*on

Open Inven*on Network, LLC.

MicrosoK Corpora*on

Google Inc.

Interna*onal Game Technology Blackberry Limited

Safran SA

QUALCOMM, Inc.

Intel Corpora*on

Lenovo Group Limited

Hewled-‐Packard Company

IBM

Lenovo

IGT

AT&T

Assa Abloy IV

Apple



Priority Date Trends (All Ac*ve Patents per Priority Year )

0

100

200

300

400

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Patents

Keyword = fingerprint and biometric

0

10

20

30

40

50

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Patents

Year

Keyword = fingerprint and biometric and credit card



Patentscape Over Time (fingerprint and biometrics as keywords, all ac*ve patents)



Text Clustering - Drilldown (drilldown with keyword biometric, all ac*ve patents)



Biometric + fingerprint + credit card+ single - use = 4 patents, 3 entities

Global gaming and lodery systems company

Ann Rev: $ 3,400,000,000 Loca2on: Reno, NV Employees: 4600 Total Patents: 11316 Ac*ve: 46% -‐ 5233 Expired: 53% -‐ 6083 Patent Li2ga2on: 41 Plain*ff: 41% -‐ 17, Defendant: 56% -‐ 23

International Game Technology

Private company Loca*on: Boca Raton, FL

and Tyler, TX Total Patents: 29 Ac*ve: 55% -‐ 16 Expired: 44% -‐ 13

Patent Li2ga2on: 1 Plain*ff: 100% -‐ 1 Defendant: 0% -‐ 0

Individual Inventor Total Patents: ~25 Patent Li2ga2on: 0

BrightSmart LLC / Bright Smart Corp Ronald Rosenberger



Adjacent Technology (All Patents; keyword biometric + fingerprint + wearable)

0

5

10

15

20

25

30

35

Patents



Organizational Categories

Niche Companies

Precision Dynamics Corp Globili LLC

Hello Inc

Genonyme GMBH Percept Technologies Inc

Pennar Software Corp IGT

Fitbit

IP Intermediaries

Intellectual Ventures Patent Properties Inc

RPX

Lancaster University University of North

Texas

Inventors

Zhou, Tiger T G Zhou, Dylan T X

Zhou, Andrew H B

Chetal, Shyam Izzet, Yildirim

Large Enterprises

Apple IBM

Google

Assa Abloy Intel ADT

Fujitsu



US Patent Transactions (2014-2015) (keyword = biometric in *tle)

Patents Assignor Assignee 40 AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC. III HOLDINGS 1, LLC 13 MOTOROLA MOBILITY LLC GOOGLE TECHNOLOGY HOLDINGS LLC 9 PRIVARIS INC. APPLE INC. 8 IVI SMART TECHNOLOGIES, INC. IVI HOLDINGS LTD. 7 AT&T ALEX HOLDINGS, LLCI INTERACTIONS LLC 6 KARSOF SYSTEMS LLC SURESHWARA INCORPORATED 4 PRIV-‐ID B.V. GENKEY NETHERLANDS B.V. 3 OSTERHOUT GROUP, INC. MICROSOFT CORPORATION 2 HEWLETT-‐PACKARD COMPANY QUALCOMM INCORPORATED 2 FACHHOCHSCHULE REGENSBURG SEMSOTEC GMBH 2 INTERNATIONAL BUSINESS MACHINES CORPORATION LENOVO INTERNATIONAL LIMITED 2 PALADIN ELECTRONIC SERVICES, INC PROFILE SOLUTIONS, INC 2 AOPTIX TECHNOLOGIES, INC. LRS IDENTITY, INC. 2 NANOIDENT TECHNOLOGIES AG ASMAG-‐HOLDING GMBH 1 HEYS USA DIRECT, LLC 2395954 ONTARIO, INC. 1 MESA DIGITAL, LLC RANDOM BIOMETRICS, LLC 1 INNERSCOPE RESEARCH, INC. THE NIELSEN COMPANY (US), LLC



Monetizing Innovation in Your Portfolio



Host and Participants

•  President at IPWatchdog

•  Host of today’s webinar

Gene Quinn

•  Founder & Managing Principal at Soryn IP Group

•  Former patent li*gator

•  Principal & Head of Technology and Innova*on at Soryn IP Group

•  World-‐renowned innovator

Michael Gulliford Fatih Ozluturk

Maneesha Joshi

•  Data Correla*on Engineer at Innography



Maneesha’s Presentation



Using Innography’s Tools Slide 1: Headlines •  I’m going to show what Innography has with regards to biometric technology,

and then further drill down into fingerprin*ng and credit card transac*ons, and then even further down into a single-‐use transac*on.

•  What I then did was decided to analyze the top 20 players using key words in Innography: biometric and fingerprints, and then drilling down a lidle further to biometrics and fingerprint and credit card.

Slide 2: Top 20 Players •  So what I have here are the top twenty companies for, in the top chart, just

biometric and fingerprint, and this is just using keyword search in Innography. •  Then in the lower chart when you drill down into biometric, fingerprint, and

credit card, you see you have fewer numbers of patents and you see some new players here, including IP intermediaries.



Using Innography’s Tools Slide 3: Market Map • Again, here I looked at ac*ve US patents using keywords fingerprint and biometrics. What we see here on the Y axis is a proxy for resources, where we use the revenue of the company, the number of jurisdic*ons filed at, as well as li*ga*on. On the X axis what we have is vision, where we include a combina*on of patents, the classifica*ons, and the cita*ons

Slide 4: Priority Date Trends • The next thing I looked at was priority date trends to get a feel for what’s going on in terms of paten*ng in this area. The top chart shows all ac*ve patents based on priority year, using the keywords fingerprint and biometric. The bodom chart is where I used fingerprint, biometric, and credit card, so we drilled down a lidle further. So you can see there’s an up*ck in both of these areas, so to say.



Using Innography’s Tools Slide 5: Patentscape •  So this is where we do a text clustering of the patents, again the set being all

patents using keywords fingerprint and biometrics… the keyword search was done on abstract, *tle, and claims.

•  What I did here was sort of do a *me slice to see how the text clusters have moved over *me, because it might give you an indica*on of what is hot today? What was hot at one point in *me, but no longer is today?

Slide 6: Text Clustering •  Another way to look at this text clustering is to get a feel for what is most

predominantly found in patents versus the terms that are not oKen found. Perhaps this is where you find your white space; you find areas where nobody’s patented before. In Innography we provide text clustering via this circular chart.

•  Again, it’s red to blue is hot to cold. The blue areas are where there are fewer patents in those clusters.



Using Innography’s Tools Slide 7: Further Drill Down •  We decided to drill down even further. So let’s look at fingerprints, credit cards, and

single use transac*ons. And what I came up with for my par*cular set was just four patents.

•  One is IGT, which is a global gaming and lodery systems company with substan*al revenue, which has a bunch of patents. It’s involved in li*ga*on. In the middle we have BrightSmart LLC. This seems to be a small, private company, just involved in one li*ga*on case… Then the third category is an inventor.

Slide 8: Adjacent Technology •  So we have biometrics, fingerprint, and I said how about we just go a lidle bit away

from that, and I included wearable technology just to see what would come up. What you see here is a different set of top 20 companies that we have now.

•  I included the “unassigned” bucket, which is the tallest bar there on the leK. Unassigned in Innography means that these are patents owned by individual inventors.



Using Innography’s Tools Slide 9: Organiza2onal Categories •  Breaking these up into organiza*onal or company categories, what I decided was I lumped

them into four categories: –  Large enterprises that are playing in this market –  You have your niche companies that I found in this search –  Then you have your IP Intermediaries –  And then you have the inventor bucket, which I found quite a few patents in this

technology that are inventor owned

Slide 10: US Patent Transac2ons •  We have a product called Patent Market Tracker that includes all patent transfers between

en**es. We can isolate patent transfers as opposed to security agreements or mortgages or what have you.

•  The top US patent transac*ons since 2014, what you have here again is an interes*ng mix I thought.

•  This provides an addi*onal data set to look into depending on what your IP strategy is. Who’s acquiring from whom? Who’s dives*ng? Who’s spinning off?



Q&A



When looking at the data, what are you looking for: the white space? the players?

Or does it depend?

So for the larger companies we work with, it’s sort of a combina*on of efforts. There, it’s key to use tools especially, like Innography, to find out: who are the compe*tors in the space? What are they doing? What does the landscape look like? But also the luxury there is a larger company can go out and acquire to round out the portolio.

– Michael



What are the first things that go through your mind when a software company wants to get in a

field that may be crowded?

•  First of all, is it a patentable subject mader? And can you use your resources someplace else beder?

•  The second thing is, for a lot of start-‐ups that are in love with their own ideas, obviously, and passionate about it, unless you are looking at the type of data that some of which Maneesha just went over, you just don’t know how crowded the space may or may not be. It is easy to lose objec*vity and not recognize how crowded that space is. The data points you to understanding your place in that landscape a lidle beder.

•  We know a number of large companies with large portolios, for example, looking to “feed” startups with IP. I think that it is a new model as well. It could be a source of building up some IP strength that way.

– Fa*h



When a small company comes to you with a particular portfolio in mind, what is your

advice? Should they be filing patents?

It starts with provisionals now. Provisionals are a nice way to get things filed. We encourage hearty and predy robust provisionals and make these guys understand here’s what you’re doing, but what are the other ways to cross that same bridge to get to the same goal? Let’s try to get that into the provisional as well.

– Michael



Would you be encouraging a startup to create their own portfolio trying to hit white space, or

would you focus on what their core is?

If you’re a savvy entrepreneurial technologist and you’ve goden into a field, say we’re talking now the wearable biometrics field, you probably got into the field because you think you have a differen*a*ng technology. There’s something you’re doing different or beder than others have done. Step one is figuring out: is that actually true?

– Michael



Where does white space come into play?

•  The white spaces come in as a supplement. If your technology is A, it doesn’t necessarily make sense to start paten*ng C because that’s where the white space is. We encourage to try and cover defensively your technology, plus other ways of doing it as strategically as possible.

– Michael

•  The ques*on is, when you see a white space is that white space not being addressed because everybody is missing something, or is it not being addressed because everybody is smart enough and they understand that it’s not valuable to patent in that space or that there are other technical issues that they’re not seeing?

– Fa*h



Why would you ever file a provisional?

•  What happens is startup companies are far beder off filing provisionals as close in *me as they can to the actual innova*on and con*nue to allow that innova*on to grow over a period of months. Then, before the twelKh anniversary of that provisional filing to go ahead and file the non-‐provisional claiming priority to all the previous provisionals that have been filed.

•  You can file a provisional and the provisional has no formalis*c

requirements; it’s all about the disclosure. If the disclosure is complete, that’s enough, so provisionals are very important in this space.

– Gene



Why would you ever file a provisional?

•  So why not file the provisional? It gives them the ability for one year, for twelve months to test their idea and see if they are raising money and if the idea changes, of course they can file more provisionals. It is really easy to do.

•  There is one very, very important thing: if you’re paten*ng an idea, which will find

its space in a mass market, that technology is going to get widespread adop*on, so any addi*onal years, especially towards the tail-‐end of the life of the patent may be worth a ton of money for the patent owner. By filing a non-‐provisional, you are actually star*ng the twenty-‐year clock, which dictates the patent life*me. By filing a provisional applica*on first, you’re preserving your priority date, and your patent is now available as reference, prior art reference, for when other people file their applica*ons. But your clock does not start *cking un*l you file the non-‐provisional applica*on. So you’re actually gaining one year at the tail-‐end of your life*me of your patent while protec*ng your filing date

– Fa*h



What would you tell an established company getting into this space?

•  A company that’s rolling technologically needs two things: it needs to organically grow its own portolio with sound portolio strategies, but it also, when opportuni*es present themselves, and now’s a great *me, because it really is a buyers’ market, it needs to have the ability and flexibility to go out and strategically acquire other assets. Either to complement, to get earlier priority dates on what you’re doing, or if there is financing available, to have the ability to start strategically start buying some assets that read on say some of your compe*tors or buying assets that are sort of corollary to what you’re doing.

– Michael



Questions to ask about positioning IP in the market:

•  How can we file to maintain offensive posi*ons on our compe*tors, on other people who might be coming into the market?

•  Can we brainstorm to figure out where this market is going over the next five years and try to get there from a patent perspec*ve before others have goden there?

– Michael



Provisional Applications •  The comment about provisionals has con*nued to s*r some interest in the

ques*ons coming in and there are people that are saying that it costs just as much for an adorney to prepare a provisional applica*on as it does to prepare a non-‐provisional applica*on. And I can tell you, personally, firsthand experience, that’s just not true. It is incorrect.

•  If you’ve really proceeded with a development of the soKware yourself as an engineering project, you’re going to have all kinds of flow charts and schema*cs and informa*on. If you’ve coded it up, you’ve got the code. You could just file the code. The code will enable at least what the code produces, because soKware is expressive. The wriden code is an expression.

– Gene •  Dozens of startups that I work with in New York actually file their own provisional

patent applica*ons. It literally costs them their own *me, obviously, but just the government filing fee. Of course they have to be systema*c, and follow a good outline. I end up giving them feedback a couple of rounds, but they can literally file on their own.

– Fa*h



The best time to consider acquisition is once you’re an established company, right?

•  Absolutely, I think that’s when the strategy first comes to the forefront.

•  There are varying en**es out there, even some real large en**es who are willing to get crea*ve now with their patent portolio. We don’t want to go out and sue people, but we’d love to maybe license their IP to a promising startup in exchange for equi*es. While the acquisi*on, the straight out buying of assets is not well advised for a lot of startups, there are more interes*ng opportuni*es now than I think ever before. The folks with the IP are trying to get more crea*ve in how they can create value from their IP as well.

– Michael



Is there any way to tell when white space is good versus when it may not be good?

•  The tools that will indicate the presence of the white space, first of all, is essen*al, such as Innography. In absence of that in the big world, it’s impossible to find those in the first place. Unfortunately the next step is not as automated. It is an exper*se call.

•  The way we decide is, if the white space basically leads you down to a technology that has one applicability and doesn’t go anywhere, even if it protects your own product, it will not have a “strategic” or offensive value, then we think twice about those. Things that we believe will cross over to other things, we like those and we encourage the people that we speak to file applica*ons there.

– Fa*h



How can white space strengthen your own core IP?

•  I think the answer to that really is, if you’re working in a core space and you see a certain white space that you may be interested in going into, then by laying those seeds, years in advance… That can give your core a buffer zone of protec*on.

– Gene

•  What it does, is it makes your portolio stronger. It has applicability to other things. It creates business op*ons for you.

•  When you’re developing the portolio so that what you’re adding to the portolio strengthens not only what you are doing for the day, but also poten*al business avenues that you may go into later on.

– Fa*h



What do you tell a company who may be interested in divesting IP at this time?

•  It’s s*ll a good *me to be selling portolios if you’re a big company. The valua*ons aren’t as high, but these are just corpora*ons that are a bit more reasonable about valua*ons a lot of the *me.

– Michael

•  Precision Dynamics Corpora*on, that I was discussing earlier, they make these bracelets. If their IP relates to wearables, this would be a great *me to mone*ze some of that value by selling it to some wearables company that are taking off. The Fitbits of the world, for example. This would be the right *me to do it.

– Fa*h



What are your suggestions for a large company who is holding on to a portfolio they may not be using?

•  If you’re a large company and you have a large portolio, at some point in *me if you’re not using that portolio, at some point the pressure’s going to become enormous not to con*nue making maintenance fee payments. So if you have somebody out there who could use that portolio or por*on of your portolio that you don’t really care about all that much anymore, you could always take a license back, sell it to them… So this way you at least get some kind of exclusive benefit out of it.

– Gene

•  From a larger company’s established player’s point of view, I’d say the maintenance fees add up for a lot of these guys and dives*ng chunks of the portolio strategically to pockets of emerging technologies or companies is something they need to consider. There’s always a good market for good IP.

– Fa*h



Gene Quinn – President at IPWatchDog, Inc.

Michael Gulliford – Founder & Managing Principal – Soryn IP Group

Fatih Ozluturk – Principal, Head of Technology and Innovation at Soryn IP Group

Maneesha Joshi – Data Correlation Engineer at Innography, Inc.

Four Tactics for Monetizing Innovation in your Portfolio

Read the Transcript Watch the Webinar


https://go.innography.com/2015.07.28FreedomtoOperate_Webinar_OnDemand.html

https://www.innography.com/blog/post/freedom-to-operate-misnomer

Data & Analytics

Four Tactics for Monetizing Innovation in Your IP Portfolio