Harness Dickey CEO Bill Coughlin spoke to Richard Lloyd of IAM Media recently about what he calls “the end of the age of unreasonableness” in patent licensing, why companies need to collaborate, and how law firms can respond to the sharing economy.
Key players in the automotive industry have seen significant growth in their patent portfolios over the past 25 years. With that growth came the responsibility to ensure it was making money for their companies, and most companies turned to licensing as a means to monetize their IP.
For a long time, however, auto companies were demanding immense licensing fees. Non-practicing entities saw a similar path to make money and began asserting rights as a way to force licensing revenues. Things got so out of hand that eventually Congress had to step in and recalibrate the entire patent system. “Because of people asking for outrageous amounts of money, we saw pressure on Congress to make it easier to destroy patents and make it harder to enforce them,” Coughlin says.
These days, patent holders “are more reasonable about the value of what they put on the table,” he adds. Part of this new trend could be due in part to the realization across many industries that it is often easier to collaborate across companies (i.e., set up licensing divisions) than it is to invent everything as an individual company. Given the auto industry’s new shifts into autonomous driving and wireless technology, licensing is a very appealing option if the terms are agreeable and beneficial to all parties.
Coughlin expects that patent licensing divisions will also need to get more savvy about how they pitch potential IP licensing deals to internal stakeholders. “It’s up to people advocating for that license to say, ‘yes, there’s a good business case to license our IP to our arch-competitor,’” he says.
As new patent licensing trends push the auto industry, the legal sector is also feeling pressure to evolve. Coughlin suggest that law firms might try new partnerships just as companies find new collaborators. “In this sharing economy, there maybe opportunities to partner in ways that law firms have not thought about in the past,” he says.