Tuesday, October 30, 2007 — GLOBAL IP STRATEGY, IP WARS, STRATEGIC MANAGEMENT OF IP

Monetizing IP the (new) IBM way

by Duncan Bucknell

IBM has come up with what is says is "a new paradigm for exploiting the inherent value within a large asset portfolio, such as a portfolio of intellectual property asserts", and of course, they've filed for patent protection (see for example US 20070244837).

So how does the new paradigm work?  In simple terms, small companies can pay an ongoing royalty or fee to a large entity which has a large IP portfolio in return for a 'floating privilege' over the portfolio.  The privilege isn't attached to any one IP right, but to the portfolio as a whole.  The privlege won't crystallise until a predetermined 'trigger event' occurs - and then an interest in part of the portfolio will be created in favour of the fee payer.

I guess you can say it's a type of insurance - you pay a subscription to have access to an IP portfolio should you ever need it - say, for example if you were sued by a 'troll'.  (See for example, claim 15.)

Yes this is a business method patent, and yes, IBM have been stressing a move away from business method patents.  They even withdrew the controversial outsourcing business method patent in response to controversy for this very reason.  But there you go.

IBM spokesman Steven Malkiewicz has said that while the application does describe a business method, "this is all only possible with technology."

I'm not sure if Mr Malkiewicz has read claim 1 of the patent.  Here it is, what do you think?

1. A method for extracting value from a portfolio of assets, comprising:granting a privilege to a second party by a first party at time t1 to permit the second party to exercise the privilege upon the occurrence of a predetermined event occurring at time t2 where t2>t1, and wherein the exercise comprises obtaining an interest in one or more assets residing in a dynamic pool of assets comprised of assets from the portfolio of assets at time t2, wherein zero or more assets are in the dynamic pool at time t1 and said zero or more assets are not in the dynamic pool at time t2.

I wonder how they will deal with conflicting privileges.  Clearly they will issue many "insurance policies" over their portfolio - but what happens when two policy holders have trigger events that conflict?  As an example, only the patentee or exclusive licensee can sue in most countries.  How will two privilege holders both be able to obtain exclusive licensee status so that they can sue?

Also, seeking access to such a large IP portfolio only to use in a counter-suit is fine, but there seem to be some other interesting things that such access might allow.  

Finally, in many cases the 'tactic' of responding to a patent infringement suit by finding a patent you can counter sue on is often a really bad one.  It's been brought about almost exclusively in the USA (does it occur anywhere else?) because of some quirks in the US system.

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