How IP Patents Can Lock In Competitive Advantages

Technology Deals, 152 pages
By Stephen C. Glazier
LBI Law and Business Institute, Publisher
$19.95
How to order: The book can be purchased online at Amazon.com, Barnesandnoble.com, or Booksamillion.com.

A strong intellectual property portfolio is a valuable asset for companies in a range of industries from traditional high tech products and software to financial and insurance services.

Stephen C. Glazier in “Technology Deals” describes how intellectual property can be bought, sold, and rented to increase the value of a company. Glazier provides excellent strategic advice for businesses and their in-house counsel about how to develop and protect intellectual property.

It is extremely easy to read with specific suggestions and examples. This book is useful for any business leader looking to get the most out of their company’s intellectual property and by doing so, increasing the value of their company.

“Technology Deals” – the sequel to his earlier books “Patent Strategies for Business,” and “E-Patent Strategies” – is premised on Glazier’s assertion that “intellectual property = shareholder value.”

He writes, “In today’s economy, well developed intellectual property is as necessary to business success, and to a good stock price, as real estate and equipment have always been.”

Glazier breaks the book into five sections, the first containing case studies, and the next four dealing with different strategies for managing intellectual property and increasing its value.

The case studies in the first section of the book are based on both real and hypothetical scenarios.

Glazier, a Washington, D.C. intellectual property attorney, describes several examples of how due diligence can uncover title defects for a patent, as well as how information collected about the prior art can lead to future infringement by a proposed product.

In one example, Glazier describes a case where Microsoft did its due diligence on an algorithm it was interested in licensing from Stac Electronics. Microsoft instead wrote its own code based on the algorithm, but Stac had protected itself with patents, and eventually received $120 million in damages and a permanent injunction. It later struck a lucrative deal with Microsoft for licensing the algorithm.

“If not for its patent and the resulting injunction against Microsoft, Stac would likely be in serious financial trouble today, or out of business,” writes Glazier.

This and other case studies provided by Glazier underscore the importance of protecting intellectual property if it is to be used as an asset, especially when it comes time to buy, sell, or license patents. As the book shows, the strength of protection directly affects the price paid or received for a patent.

The second section of “Technology Deals” covers new strategies for intellectual property. Glazier claims that the old strategy of “innovate or die” is invalid and replaces it “create, own, exploit.” As Glazier puts it, “You must innovate, then own it, then exploit it to turn it all to cash or market advantage.”

He attributes this new strategy to the fact that traditional barriers to entry no longer stand as a result of new technology and global economy. To compensate for this, Glazier argues companies must erect new barriers by protecting their intellectual property.

The author also suggests basic quantitative measures to analyze the productivity of patents and benchmark that productivity against competitors.

In addition, there is a chapter that gives specific suggestions and strategies for how to establish an investment grade patent portfolio prior to mergers and acquisitions to get the most out a deal.

In the third section of the book, Glazier discusses strategies on how to respond to such demand letters given certain circumstances. The author highlights the fact that different approaches are required depending on who sent the demand letter. Appropriate responses are suggested for different scenarios, such as whether to obtain opinion letters, litigate or license, or invent around a patent, among others.

The fourth section stresses the importance of software and business method patents. One chapter chronicles the relatively new development of software and business method patents and cites several cases relating to both. Another shows how the number of these types of patents has been increasing based on data from 2004 and 1999 surveys.

For example, patents involving banking and the Internet jumped from 22 in 1999 to 1,309 in 2004 and the number of patents involving Internet applications rose 6,500 percent in the same time period.

Glazier updates strategic rules for software and Internet invention given in the book “Patent Strategies for Business, Third Edition,” an earlier companion volume to “Technology Deals.” These rules suggest how to develop and update intellectual property portfolios with technological developments and improvements of products, services, and infrastructure.

In the fifth section of “Technology Deals,” Glazier provides ideas about intellectual property surveys. Once a company makes an inventory of their current portfolio and their competitors’ portfolios, Glazier claims, it can start to implement business practices that take advantage of its existing patents and further develop new products and services based on such patents, as well as work around those of its competitors.