I wonder if the most significant event of the past few months for the developing IP market place was not actually the Nortel auction or Google’s purchase of Motorola Mobility, but the statement from Carl Icahn prior to the latter occurring. Towards the end of July, billionaire investor Icahn, who has a fair sized chunk of Moto shares, said that the board should be looking to monetise the company’s patent portfolio, which he said had “significant value”. He continued: “There may be multiple ways to realize such value given the current heightened market demand for intellectual property in the mobile telecommunications industry.”

We now know that even before Icahn went public with his views Google and Motorola Mobility were in talks about a possible acquisition, indeed Icahn may even have known about them; but what his statement showed was that a serious investor had taken a close look at the IP position of one of the companies he had an interest in and had formed a significant position as a result. Of course, without the Nortel auction he probably would not have done so; but that is by the by - he did.

It has always been my belief that for IP to be treated as an important corporate asset by company boards investors would have to start asking the C-suite about IP strategy. After all, you can always ignore what your head of IP is saying, or refer him/her to someone else, but woe betide any CEO or CFO who ignores investors. If they ask questions, you need the answers. And if people such as Icahn are asking, you need the answers now.

But whatever is inspiring it, anecdotally it seems that since the beginning of July many more in-house IP managers than usual have been getting calls from on high asking about IP positions, strategies, sales and acquisitions. If you talk to intermediaries and other consultants you get the same kind of feedback with regards to rights owners, VCs, hedge funds and so on. Everyone wants to understand the potential for buying and selling IP, but they also seem to be looking for insight into developing IP strategies in order to maximise value on an on-going basis.

A while back in IAM magazine, GE's then head of IP Todd Dickinson said the following: “Ten years ago if you asked the average board what its company’s IT strategy was you probably would have got a number of responses reflecting different levels of knowledge and interest. If you ask boards the same question now you can bet that every single board member has an excellent handle on the subject. I think that IP is now where IT was 10 years ago. But that will change.” Dickinson was speaking in 2004. It could be that by 2014 his prediction has come true.

All of which makes me wonder whether I was being overly pessimistic in writing about a bubble; or, to be more exact, I am now thinking that perhaps you can have a bubble and a tipping point at the same time. In other words, while the overall perception of the value of patents may be over-inflated right now, the interest that has been sparked in them looks likely to last beyond the first disappointing sale results.

One of those I have been talking to about the potential bubble, or lack of it, is Jackie Maguire, the co-chair of the recently formed International IP Strategists Association (INTIPSA). In her other job, Maguire is CEO of Coller IP, a strategy consultancy based in the English midlands. She told me that the firm has seen a marked increase in enquiries over the summer, including quite a few from operating companies regarding the buying of IP. She said that it was not just US patents that are generating enquiries. This interested me - I had always thought that it was US patents which drive everything in this area because of the American litigation system, the potential for damages etc; but Maguire pointed out that if you are an operating company damages may not always be what you are after: the right to exclude can also be a high priority. This makes good quality patents covering countries in which injunctions are readily available potentially very valuable: Germany is the obvious example, but there are others as well. That’s food for thought and one reason why what could be a nascent patent boom may not be confined to North America.

Anyway the reason we were talking in the first place is that this Wednesday 5th October, at 4.00 pm UK time (11.00 am EST), INTIPSA will be hosting a webinar entitled The Great Patent Bubble of 2011 - What Implications for Business? Among the topics to be discussed will be:

• Are recent deals a sign that IP really has gone 'mainstream' and is being recognised as a strategic asset, or is it a bubble that is set to burst?

• Is the boardroom interest in IP valuation a phenomenon unique to ICT or are other sectors affected as well?

• What are the implications for how corporations manage and value their IP in the future?

• How should small businesses and start-ups respond to this new environment?

There are two high-quality speakers lined up: Peter Holden, head of IP investments at Coller Capital; and Ralph Eckardt, a managing partner of 3LP and co-author of The Invisible Edge. Both men featured in IAM’s recent 50 at 50 list, so you know they’re good! If you have an hour spare, the webinar looks like something well worth tuning into. To take part, you need to register at the INTIPSA website after which you will be sent all the necessary details. There is no cost involved.

UPDATE - Over on the IP CloseUp blog Bruce Berman has put together a good piece on the way in which some investors and Wall Street analysts are now looking at patents held by technology companies. Carl Icahn is not the only one to have noticed they can have real value:

The Nortel auction set the stage for IP value recognition as well as patent price inflation.

Prices for “must have” patents clearly are in a class by themselves. Perceived need and costs of R&D and patent litigation figure into the calculus; so does a business’ ability and appetite to fend off enforcers. “Nice to have” and “need to have” have very different connotations both in the IP world and on Wall Street.

Some on Wall Street, like Peter Misek, are finally making an informed attempt to put patent value into shareholder perspective. Let’s give them credit for trying. 

Sectors

Patents, IP business, IP valuation