Intellectual Property Strategy: Challenges and Opportunities in the Cloud @ CloudSlam'14

Intellectual Property Strategy: Challenges and Opportunities

in the Cloud

Efrat Kasznik, Founder & President Foresight Valuation Group, LLC

2 Foresight Valuation Group © 2014

About Me: Efrat Kasznik

¨  Founder and President, Foresight Valuation Group, a Silicon-Valley based Intellectual property (IP) valuation, strategy and start-up advisory firm.

¨  Valuation and strategy expert, with 20 years of experience analyzing IP portfolios across industries

¨  Lecturer, Stanford Graduate School of Business

¨  Chair, Cloud Committee, Licensing Executives Society (LES)

¨  Top IP strategists, IAM 300 List 2013-2014

¨  Co-founder, CFO and Advisor to startups and incubators in the US and Europe


Let’s Talk About Patents…


Outline

¨  Cloud Litigation Update ¨  Is Cloud the Next Mobile Market? ¨  IP Best Practices in Cloud Market

¨  Next Steps & Resources


GigaOm Article: Jan 2013


Cloud Storage: Most Litigious NPEs •  Clouding IP •  PersonalWeb •  Data Speed Technology •  Parallel Iron •  Titanide Ventures •  Oasis Research •  Safe Storage •  TLI Communications

0

10

20

30

40

50

60

2010 2011 2012 2013

NPE Lawsuits

Key Facts •  120+ Patents used by 40

NPEs over last 4 years •  90+ Patents used by 25

NPEs over last 18 months

Cloud Troll (NPE) Litigation is Here!

# La

wsu

its F

iled


Source: The Guardian and New York Times

Is Cloud The Next Mobile Market?

Mobile Market Litigation


Apple, Microsoft, Research in Motion, EMC, Ericsson, and Sony joined together in a consortium to win an auction for the 6,000 patents of the bankrupt Nortel at a price of $4.5 billion.

Google, the losing bidder in the Nortel auction, announced the $12.5 billion acquisition of Motorola Mobility, whose IP portfolio includes 17,000 issued patents and 7,500 patent applications.

June 2011 Aug 2011

Multi-Billion Dollar IP-Driven Deals

Google Motorola Acquisition Nortel Patent Auction


Is Cloud the Next Patent Battleground?

Attribute Characteristics Mobile Cloud?

Market Size Explosive Market, large economic stakes þ ??

Products/ Services

Multiple features in one product Multiple layers of Services in Platform

þ þ

IP Landscape Patent thicket – overlapping claims Business method patents – broad claims

þ þ

?? ??

Competitive Dynamics

Incumbents with large IP holdings Newcomers entering markets without IP NPE (trolls) patent holders

þ þ þ

þ þ þ


Global Public Cloud Market Through 2020

Source: Forrester Research, Inc.


Multiple Cloud Service Layers


16 104 158

226 293

369 530

890

1415

2124

16 89 128 152 173

218 320

521

963

1508

15 30 74 120 151 210

369 452

616

0

500

1000

1500

2000

2500

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Pate

nts/

App

licat

ions

Pub

lishe

d A

nnua

lly

Publication Year

Total Applications Granted

Exponential Growth in Cloud Patents

12

Source: Evalueserve


0

20

40

60

80

100

120

140

160

180

Total Pub

lic CLoud

Market ($ Billion

s)

Public Cloud Market Forecast

Cloud Industry Peak to Coincide with Wave of Patent Grants – Next 5 Years

16 89 128 152 173

218

320

521

963

1508

15 30 74

120 151 210

369 452

616

0

200

400

600

800

1000

1200

1400

1600

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Pate

nts/

App

licat

ions

Pub

lishe

d A

nnua

lly

Filing Year

Patent Filing Trends Applications Granted

68% Avg. Annual Growth since 2009

22% Avg. Annual Growth (2013-2018)

13

Sources: Forrester Research, Evalueserve


Cloud Patent Landscape: Aggregated Cloud – Top 20 Patent Holders

0

50

100

150

200

250

300

350

400

Cou

nt o

f U

S Pa

tent

Fam

ilies

Assignee

Source: Evalueserve


Best Practices: IP Management

1.  Know the Landscape ¤ Current (incumbents) & Future (pipeline) ¤ By technology area & Geography

2.  Start Early! ¤ AIA: “First to File” ¤ Patents take 3-4 years to issue

3.  Manage IP as Strategic Business Asset ¤ Offensive ¤ Defensive


Cloud Patents by Area (Since 2003)

1237

1761

889

2412

584

0

500

1000

1500

2000

2500

3000

Architecture Manangement Security Services Storage

Cou

nt o

f Pa

tent

Fam

ilies

VMware Amazon

Amazon VMware

BMC

IBM Symantec

Citrix

Amazon

IBM Google Apple

Microsoft

EMC Amazon

IBM

Source: Evalueserve

16

Foresight Valuation Group © 2014

Cloud Computing – Taxonomy Cloud Computing

Architecture (1237)

Management (1761) Security (889) Services (2412) Storage (584)

Deployment Models

Cloud Engineering

Virtualization

Provisioning

Load Balancing

Resource Management

Performance Management & Billing

Scalability & Maintenance

Bandwidth Management

Access Control

Fault Tolerance

Cryptography & Secure Transmission

Cloud Firewall/Gateways

APIs

Web Services & Enterprise Applications

Mobile Applications

Cloud Client Software

Software as a Service

Infrastructure as a Service

Platform as a Service

Storage System/Hardware

Storage Platform

Storage Virtualization

Data Storage

•  Dell Service Cloud Implementation Packages

•  Oracle Automatic Storage Management

•  VMware vSphere

•  Citrix Cloud Platform

•  Amazon CloudWatch

•  Amazon EC2

•  BMC Cloud Lifecycle Management

•  VMware vCenter Operations Management Suite

•  IBM Hosted Application Security Management

•  Citrix Cloud Gateway

•  Symantec.cloud

•  Symplified Cloud Access Manager

•  Amazon Relational Database Service (RDS)

•  Apple iCloud

•  AWS Amazon Cloud Drive

•  IBM Sterling B2B Integration Services

•  Cisco MDS 9000 Family Solution

•  Amazon EC2 Instance Storage

•  EMC VPLEX

•  IBM SmartCloud Archive

Tech

nolo

gies

Pr

oduc

ts*

* Product list is indicative and not comprehensive


Start Early: Long USPTO Pendency Time

Pendency time is close to three years… … while application backlog is around 700,000

Source: USPTO.gov


Latest USPTO Dashboard Statistics


IP portfolio building

Portfolio commercialization & monetization

Portfolio liquidation

Manage IP as Strategic Business Asset


IP portfolio building

Portfolio Building – Early Phase

Goals: •  Freedom to operate •  Block competitors •  Support future products •  Hedge against litigation •  Attract buyers, investors

Sources of IP: •  Internal R&D à filing patents •  Buying patents •  In-licensing (university,

government labs, etc)


IP Defensive & Offensive Goals

¨  Building Your Portfolio as a Strategic Business Asset ¤ Align filing strategy with your corporate vision ¤ Monitor the industry for buying or licensing

¨  Defensive Goals – Manage Litigation Exposure ¤ Assess your options, use litigation data ¤ Mitigate the risk (patent defense funds) – be proactive!

¨  Offensive Goals – Enforcement & Monetization ¤  Be ready to enforce you IP ¤ Monetize your portfolio regularly


Honeywell Int. vs. Nest Labs, Inc. Startup Sued by Competitors

Product: Smart Thermostat Overview: Honeywell filed a multi-patent infringement lawsuit against Nest Labs for allegedly infringing on seven Honeywell patents – sought cease and desist order and collection of damages – not licensing fees.

NEST Actions: 1.  Nest filed for reexamination of Honeywell’s patents. 2.  Next created a large patent portfolio (hired Apple’s GC) 3.  Nest buying patents from Intellectual Ventures to further defend itself.


Portfolio commercialization & monetization

Portfolio liquidation

Strong IP Portfolio Supports Later Phases

Use Internally

License

Sale

Joint Venture/Spin Off

Enforcement


Intellectual Property Resources

Patent Data - Free Services: PatentBuddy USPTO WIPO

uspto.gov

wipo.org

patentbuddy.com


Intellectual Property Resources (Cont.)

Litigation Data: Troll Defense: Patent Analytics: IP Identification:

lexmachina.com

unifiedpatents.com

evalueserve.com

traklight.com

Foresight Valuation Group © 2014

Foresight’s Cloud

Industry Services

INTELLECTUAL PROPERTY ANALYSIS

IP Valuation We offer a full range of IP valuation services in support of cloud commercialization. IP Strategy We assist companies with aligning their IP portfolios with their business objectives to successfully navigate the competitive cloud landscape. Litigation Support We provide technical and damages expert testimony and litigation support.

ECONOMIC IMPACT ANALYSIS Total Cost of Ownership (TCO) We use advanced cost models to measure the impact of adopting new cloud solutions on a company’s existing baseline TCO structure, including all aspects of CapEx and OpEx associated. Revenue Uplift Potential For companies offering new cloud technology, we quantify the impact of revenue uplift potential for their clients at the financial statement level using in-depth accounting and financial analysis. Return on Investment (ROI) We leverage our proprietary Universal Cloud Economic Analysis (UCEA) methodology to show the ROI associated with adopting new cloud solutions.

Customer/Market Technology

THANK YOU!

Presentation available upon request

Efrat Kasznik President, Foresight Valuation Group [email protected] 650-561-3374 http://www.linkedin.com/in/ekasznik

Intellectual Property Strategy: Challenges and Opportunities in the Cloud @ CloudSlam'14

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