ipVA’s blog on adding value through intellectual property

Another very urgent change at the top needed before reputation and brand collapse. Go now Bob and show some leadership. You take your bonuses and by doing so misread entirely the public mood. Then when bad things happen you don’t show leadership by stepping aside and taking the blame onto your shoulders. You are not the man to take Barclays forward. Bye.

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Reading IAM issue 54, two quick observations.

Twitter’s patent policy is the subject of the Insights section. It’s not clear who wrote this but it may just miss one key point, which is why Twitter has put its Innovator’s Patent Agreement in place. To summarise, Twitter’s VP of Engineering Adam Messinger has implemented an agreement and policy that puts some control of how a patent is used in the hands of the inventors. IAM, correctly, argues that this may place restrictions on Twitter’s abilities to use the patents in question for offensive purposes or to raise finance by selling the patents, to trolls (I like the word troll, it is sufficiently descriptive for me of all models that create wealth from licensing patents, however implemented, NPEs is too kind, and as the IP Hall of Fame now has its first troll….stop it Andrew), or for any other purpose other than defensive.

Why are these restrictions important? Well stop and pause for just ten seconds and imagine that you are a software engineer. Don’t read on until you imagine this for at least 10 seconds.

So Mr Software Engineer. You read Slashdot (notorious patent haters) and other technical journals and literature. You may have worked at organisations like Gemstar and IBM where pots of wealth were and are being created using your inventions. What do you feel about patent licensing as a business model? How do you feel about your precious inventions, the emotional equivalent of your children so they say, being used by lawyers to force another company to defend against your invention. You may, or may not, philosophically, believe in software patents. But that is not the core point. Other people, probably lawyers, are taking your babies and forcing others to pay money to make use of them. Emotionally that’s hard to imagine, and what’s worse is that they don’t even ask your permission to do so or pay you a fair reward for their privilege.

If those hard-bitten beliefs are to be reversed and the opposite behaviours encouraged, Twitter like IPAs will be part of the solution. Does IAM think that Mr Messinger will have implemented this blind without asking engineers for their opinions and views?

I also liked the “Seen & Heard” section in general and this quote from Ron Zink of Microsoft Europe in particular.

“Negative fringe stories about multi-billion dollar patent wars and anti-counterfeiting treaties are tainting the image of IP”.

Too right. Though I think, ending the week on the same theme as which we started it, that removing the words from “and through to treaties” and replacing the word “IP” with “patents” would be more accurate.

Time to rest, a hard week.

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I like this series. I might rename it “why changing the guy at the top can change the whole perception of your organisation”.

Like the mightily dislikeable Michael O Leary, Sepp Blatter’s tone from the top of FIFA does it a dis-service. Pick your words from the following list and feel free to add any that may have been missed, because I am sure that Mr Blatter does some charity work and is loved by Mrs Blatter and all the little Blatters, but as CEO of World football he is just the wrong man. Word association words:

• cheat
• despot
• power crazy
• exclusive (ie the opposite of inclusive)
• liar
• embarrassment
• anachronism
• closet racist, possibly.

Basically just a twat!

The Guardian ran this super piece about the fine imposed on Niklas Bendtner for showing his Paddy Power sponsored undies at Euro 2012 and comparing it to the fines that have been imposed for rascism. The Guardian doesn’t like Mr Blatter at all, and, as the World’s leading liberal voice I agree with every word they say.

In business the character of a business is set from its top. The CEO is the public and private manifestation of its character and ethics. In football or indeed politics (don’t think you’re exempt Bashar al-Assad, you will be shot and die horribly like Gaddafi, you know it, because despots never win in the long term) or any walk of life, the person at the top will determine its character.

Put Sepp Blatter at the top and what you get is what you saw last night in Spain vs Portugal. A cheating-fest. Every tackle was exaggerated, every foul made to look worse than it was, every falling over in the box made to look like the penalty that it wasn’t. Don’t get me started on the animal that is Pepe (just watch this if you want to see this animal in action) or that preening, diving, cheating, creature that is Ronaldo-both horrendous examples to kids and to the World in general.

FFS (for football’s sake) don’t just jump on every bandwagon FIFA (be it diving, false card waving, goal-line technology or the next thing), change the CEO. Watch games with integrity (golf, tennis, rugby, as an example, watch Novak Djokovic self-call a line error and lose a point in Paris at Roland Garros, in the final) and then watch the Spain vs Portugal game last night with shame and embarrassment at how low the World’s favourite game has stooped under the leadership of Sepp Blatter.

My wife watched it because she is Spanish. Half an hour into the second half she saw the animal Pepe commit his nth foul of the night and his yth false squeal when fouled and decided to go to bed. The super slow-motion replays are just plain embarrassing. Every player, even the fabulous Iniesta and the world class Xavi do it.

Its Gladwell’s Broken Windows theory in practice. If you live in a neighbourhood where all the windows are broken you break windows and generally cause chaos. Fix the windows and give people somewhere to live that they are proud of and, amazingly, not only petty crime but even the murder rate drops.

What would be lovely is for Mr Blatter to step down gracefully before he destroys FIFAs credibility any further (why does a country like Switzerland tolerate this despot). Failing that we need Kofi Annan to develop a peace plan before the troops have to be brought in and Mr Blatter is shown on YouTube being dragged out of a under-road tunnel and slapped around as the latest despot victim of Arab Spring to be brought down to Earth.

Good will always win. Either way this particular football despot needs to go.

To end with, a quite funny story. My family and I went to Zurich 3 weeks ago for a holiday. On one of the rainy days, we decided to visit FIFA HQ. What a beautiful building, resembling a football stadium surrounded by something like 12 full size groomed pitches and one amazing astroturf pitch not anything like the ones I used to play on at Platt Lane in Manchester. Dani, my 14 year old and I really wanted a kickabout but we’d not brought our football. So, we thought, here we are at the home of football (not soccer btw), we’ll buy or borrow one.

In reception, the very polite lady told us the only balls they had were for show, and they were beautifully shown, all Adidas balls through the World Cup years from 1970. We thought to grab one but that seemed wrong. It’s ok, we’ll go to the shop I thought. Guess what, they don’t sell balls in the shop (that’s actually very funny isn’t it?). Lots of keyrings, mugs, etc but no balls. That’s ok I said, we’ll go to the gym (you know where this is heading don’t you?). Sorry sir, the only ball we have here is this one here, right beside me on a stand, and that’s for show only. Our last resort was to go to the pitches, to find a group of boys training……………for American Football.

So, no balls at FIFA. Given the longevity of his despotic reign, that feels like an accurate summary.

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Executive summary

• Great networking and catching up with old friends
• Patchy content
• Telecoms fixated
• Patent dominated
• Not a great dinner venue for Monday, particularly for an epileptic
• A market on the move, but still too patent focussed
•  A lovely hotel and a unique room

Overall rating 7/10

I’m not sure what more to say. I’ll explain a couple.

Next year, unless the content matures, it should be renamed the Patent Business Congress or the Telecoms Patents Business Congress.

It seemed close to all of the speakers and most of the audience seemed to think that IP=patents and could talk of nothing else. Even worse, anybody outside of telecoms would have felt poorly served.  Maybe this was the sub-theme, and if so it should have been made clear.

I started to count in each session the number of times that the word patent was being mentioned or the number of minutes of possession patents was getting. If I’d had one of those football possession stats, it would have read Patents 96%, others 4%. Like Barcelona versus Newcastle in the Champions League (it’ll never happen but we can but dream) patents were the tiki-taka champions of the conference.

Do you think I’ve made my point? Does anyone care? Well at least thanks you to Mickie Piatt from Chicago-Kent college of law who came across after Ben Goodger’s very stimulating session yesterday and is trying to take patents out of her IP education program. Mickie, I’ve totally misrepresented what you said to me but, as they say, never let the truth get in the way of a good story.

I am epileptic so imagine my joy at the one million twinkling lights on Monday night at the Casino de Estoril in a room that replicated my one, and only, night in a lap dancing bar. The venue could not have been much worse. Though I did get to sit next to the IV wall of sound that is Ken Lustig.

Conversation possession wise I think I got 6%. He is the tiki-taka of the conversation world. I think he paused for breath once but left his ears at home in Seattle. I had to play the tactic of a surprise shot from distance around six minutes in  by asking “Is IV going to make money?”. Around 2 minutes later after explanations about how IV is making pots of money I tried another “I wasn’t asking about revenues, I was asking whether they will return money to investors and whether the management team will make their bonuses for a return over 15%, or whatever IVs hurdle rate is?”

I wasn’t being provocative or skeptical Ken (promise) but you are running a 20 year fund that is 10 years in and is the most prominent of IPs investment funds.  If IV fails, we may all fail or at least find finding money hard (that btw the answers your question about why we care about IV).

Sorry Ken, everybody says you are a wall of sound but you’ve now met a Geordie. We tell people when they’ve inadvertently smeared bogeys on their chin so you’re not getting away lightly.   

It does seem the market is moving though. Mosaid and CPA with new PE owners, new funds for the quite hard to like Vincent Pluvinage (so he says) and one other genuine IP visionary and, for us, BCG represented. A good chat with Mark Wohlfarth about how BCG see the market. One to watch I think.

We did have a great table on Monday though. My personal  favourite and aspirational friend John Olsen. Ben Goodger also of Edwards Wildman (regrow the beard Obi-Wan). Peter Holden, watch him, he is the real thing. Mark Wohlfarth from BCG, about whom more above, and a gentleman from Perkins Coie who’s name I didn’t get. And Rob who’s an IP genius at the worst of times.

Awards

A few awards

Best presentation. An equal first:

Raymond Hegarty of IV (shit, he’s got more kids than me, in fact I’ve got 5/9 of his number and he still may have a couple more in him). Unexpectedly polished and informative and expectedly entertaining. Irish dancing is on the keynote for 2013. It is IP Joff. You need to remove yourself from all these Neanderthal patent types. Oops, there I go again.

 Haydn Evans from CPA with his series of European IP attention statements. Heck are we in trouble. We will soon be not only out-patented but out-innovated. Does anybody care?

Best and worst dressed man. Stephen Potter, both days. Tuesday reminded me of Timmy Mallett.

Best dressed woman. That unapproachable larger than life (and her dress) girl in the beach dress on Tuesday.

Best idea. INTIPSAs vision with a quality twist suggested by the very cool Kate from Watermark.

Best comment from the audience. Being immodest, mine in Donal’s session. Europe needs to focus on it’s USP s and fast. Start by uninviting all the American trolls and troll evolutionaries who say they’re not trolls from IPBC 2013.

MVP. Joff Wild. You seem to like the Americanisms, example IP Hall of Fame. You’ve created a prima donna fest Joff. All criticism constructive.

Oh, my room at the Poussada. How much I made of this!!  They’ve retired the room for me going forward. Room 007 will be forever mine.

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Executive summary. Opportunity missed to set the business tone.

Is IP at a Tipping Point? According to IPBCs keynote opening address it is. Six speakers on the keynote panel, four US accents (very able but why, do we not have talent in Europe?), three officers from the patent and trademark offices in the US and Europe (Europe’s, as ever, is split into two functions), dominated by about 80% talk about patents, but not a CEO in sight. 

The closest we came to a business leader was the CEO of the Rockstar Consortium. He looked like and talked like one of our client’s ambitious and visionary CEOs. 

Some debate on whether it is at a Tipping Point naturally from individuals own perspectives. More patents, faster granted patents through automation, SOPA, PIPA, smartphone patent wars, more trademarks, lower fees, better examination, Nortel as a landmark (described as seminal, I don’t think so) event. 

It would be hard to disagree that IP has come a long long way this last 12 months. But as a father of five, I find it hard to say that this is a Tipping Point as described and defined by Gladwell in his book of the same name. Let me explain.

I have five kids aged between 6 and 14. With all five we’ve had a range of  what we thought were Tipping Points towards disaster. And many where we thought that we had reached the persistent breakthrough but then realised that despite our joy, they would then do something unexpected and often stupid that made us question our parenting skills. 

And IPs evolution is following the same sort of path. It’s probably closest in maturity to my 6 year old. She thinks she can be a lady but she just can’t (that breaking wind and laughing runs down my Geordie side of the family, quite an inheritance I think), thinks she can dress herself but then creates odd combinations. 

If IP were at a Tipping Point then we would be falling over CEOs at this, the best of all the IP events on the circuit. We would be bumping into PE fund managers in the loos, getting coffee invites from analysts and investment bankers. And the keynote panel would be talking to those exact same people in a language they would all understand.

So no we are not there yet and I don’t think, looking back when I’m 60 (11.5 years from now) that we will ever be able to identify one event, one year, one person, one seminal moment when it all came together. Like my 12 year old we will not know why he’s suddenly a just great kid. It’s a series of random, unconnected, persistent and dogmatic points that all join together to create a result that joins the dots looking backwards. 

But at least I like a lot of the IP community. What a joy to bump into my first contact this morning, the charming John Olsen from Edwards Wildman. John smiled his charming smile when I said he looked like half a John Olsen. He’s been running on his treadmill every day and looks like one of those ads for a guy with pants that are now triple his waist size.  John told me that this week is the 200th anniversary of Charles Dickens’ birth. He also told me that Dickens spent many of his last years chasing down people breaking his copyrights in the US. As ever John, right on the money. 

Number of times the word “patent” mentioned in the keynote. 236 in 60 minutes. That is 3.933 times per minute. Trade marks got 25. Intellectual capital got 1. Copyrights nil. Designs 1. This IP community is still, in my humble view at a neanderthal level, knocking on for being 6 years old but with a long way to go.

Think I need to find a subset of this community that thinks like me. Who’s out there?  There’s never been a better time for us future thinkers who think beyond hitting people with big sticks and smiling at the cleverness of it all. Anyone up for starting an ip fire. I’ll bring the kindling.

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I, Cringely is worth a read this morning carrying an insight into the AOL patent sale. All may not have been as it seemed. For now I’ll merely put the link up and follow up with a call or two. We are talking here about two public companies, one intending to be one shortly and an investment bank with a slightly tarnished reputation that should be watching its behaviour. Intriguing whether factually accurate or not entirely.

http://www.cringely.com/2012/04/microsoft-aol-patent-theater/

Late Friday update. I’ve not been able to uncover anything more about this story from those I know who should know. There does seem to be some reluctance to comment. More digging to do when back on Sunday.

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I for one can’t name another brand that is so universally, well continentally, used but loathed as Ryanair. It’s surely rare that so many people use a brand but so many also loathe it. Count me in on the loathers of this skanky, take the piss out of customers, offer so little in terms of a customer experience, piece of travel turd. That felt good, there is surely nothing like travelling Takethepiss Air to stimulate the creative juices and scour the depths of loathing. 

Let’s Go with Ryanair this quarter has a picture of it’s chief skank officer, claiming “thank you for choosing to fly with Ryanair, the worlds favourite airline”…ha! firstly nobody in their right mind would “choose” to ride with your airline, it’s just there is often no choice. Second, just because a lot of people use your airline doesn’t make it a favourite….people use it often as there is no choice, but that doesn’t mean using it is anything other than a tortuous, horrific and awful customer experience. Look up favourite in any dictionary Mr o Bleary, you’ll find words that describe an experience you’ll want to repeat, not something that is anticipated with dread and regret for choosing one of the worlds truly dreadful customer experiences. 

Looking at this objectively and with an advisors hat on, what is it that is wrong with Ryanair? Let me give you two very fresh examples. I’m flying back from Sevilla and find I’m 4 kilos over. Bugger, I think. I thought it was close but not over, as the smiling assistant tells me that will be €80 to pay. €80!  Not that they haven’t got space, it’s just another way of taking the piss by maximising profit at the customers expense. Loathe point #1. Angry, disillusioned, yes I know you charge but it’s like excess parking charges and private contractors who enforce them…punish me but please there is no need to take the piss because it makes me hate you. There is just no need. I’m then standing in the queue to board and I’ve got my tennis racket in my backpack. Sorry, can’t travel with that even though we have tons of space in the cabin. That will be…..let’s pause to let you guess……..that will be an arbitrary and punishing, way out of context and scale €50 to put that in the cabin. Grrrrrrrrrrrr. 

I totally utterly and absolutely despise you Ryanair and I hold you personally responsible Michael o Leary. Don’t think you can be the smiling laughing face of Ryanair doing your aeroplane impression in your magazine and expect that the shit doesn’t stick. Ugh, yuk, aaaarggh, steam. 

So if I were your adviser on brand what would I say? Get to know what your customers like and want. And get to know what it feels like when someone is taking the piss and only trying to take every penny from your pocket during the experience. Look at Apple if you want to learn. A brand with universal appeal and massive margins in the most hostile competitive environment, but which will achieve longevity by delighting it’s customers. Not in showing contempt for them. Just because you started out with a taking the piss apparently low cost but not really model, don’t feel that need to perpetuate it. Adapt, take slightly lower profits to engender goodwill. Find new roots and brand values. Grow up! Probably replace the founder with someone who cares even 1% about customers and not 100% about profit. 

Or what? Or else you will find in time that people will delight in finding an alternative. And alternatives there will be, as you’ll grow too big and, like Tesco, you’ll cap out and start slipping back and never recover. It will happen and you know it. And by the time you realise it will be too late to adapt. 

There are barriers to entry but they aren’t that high and you aren’t that cheap any more. So learn and adapt or please, just die. 

As an anecdote for you btw, I travelled by Easyjet to Sevilla in November and, to my amazement, one of the worlds favourite brands, Rafael Nadal, travelled on the same flight (now isn’t that cool, with Cisca too, braving the natives to travel at 7am from Gatwick and he didn’t even have speedy boarding!) With a huge bag of Babolat rackets on his back. Any extra charge for that bag. No? You see Easyjet has adapted, caused by a change in founder. Profit sacrificed for longevity. It can happen. If it doesn’t with Ryanair, then sell. Fast. 

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After Facebook last week comes Microsoft’s latest acquisition with 800 patent families acquired from AOL for a figure of $1bn. How to read this:

1. AOL needs the cash and cannot monetize the portfolio itself in the time needed to give its board some breathing space;

2. MSFT clearly has a need for these, and it’s a good bet that this portfolio is not being acquired just to give MSFT an additional revenue stream. MSFT has been a very quick learner of the strategic value of patents and is slowly perfecting its execution. This is another bold move by MSFT is its IP evolution. Somewhere in this portfolio is also possibly another big clue to MSFT’s corporate strategy, continuing it’s move towards the cloud and towards the consumer;

3. At the typical rates earned by corporate finance advisers and investment banks this may well be the easiest and quickest earned $75-100m by an adviser. A stunningly fast return in a market where new go to names are emerging. Well done Evercore Partners.

As an update on this story, it’s great to see our own Tom Ewing appearing on the mainstream NBR news report to explain the context. NBR was so keen to get it’s story out it gave Tom only a few minutes to brush his hair and prepare and was happy with a grainy Skype connection but Tom was polished as ever.

Wow! This year could well exceed last in terms of big IP news stories, for volume in not single deal sizes.

Thanks to my favourite Beeb for being swiftest with the news.

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Try this for a prediction. According to Forbes.com Apple will hit $1650 per share by 2015 and be worth over $1.6trillion.

I’ve had this theory for a while, bringing this back to IP, that Apple’s patent fights of 2011-12 and the panic buying of MMI by Google are about one thing–the price for community access. Apple, in my theory, is building the World’s largest community and hasn’t even started monetising it yet. But its major difference over say Facebook or Google is that it is a deeply personal and intensely pleasurable thing to be part of the Apple community. A community that doesn’t compromise on substance or style. A community users want to be part of and which could pervade all parts of a user’s life.

Ask me for my payment details and to process all my payments through Apple-done, ask me to use Apple as my search provider-done. To be my social network provider-done. In fact, ask just about anything and the answer is yes of course.

And why? Because there is no compromise and Apple is trusted by an increasingly large community. Who know that Apple makes things feel good and makes them simple and stylish. Trust. As simple as that.

My theory expands into imagining what keeps Larry Page and Mark Zuckerberg awake at night. Answer. Apple competing in their core markets. Search 3.0 and Social Media 2.0.

And what should but probably doesn’t keep various banking giants awake at night. Answer, Apple competing in their core retail banking markets. I don’t think the banks will even see it coming.

There’s a deep IP angle to this.

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