PRESS RELEASES
Inside the Business of IP Licensing and Commercialization: LES Foundation Releases its Annual Survey of the Licensing Industry
WASHINGTON, March 23, 2009 - Seismic shifts in today's economic landscape have businesses and governments alike looking to innovation for its proven ability to spur commerce during rough financial times. Every day, members of Licensing Executives Society (USA-Canada) are engaged in driving commercialization of innovation through the licensing of intellectual property (IP). The LES Foundation's newly released Survey looks at how issues and trends in the marketplace are affecting the business of IP licensing.
The LES Foundation survey uniquely gathers data from licensing professionals across industry sectors (health, digital information, communications & electronics (DICE), industrial, university & government). The survey also segmented its respondents into two groups - professional service providers and technology creators/ users.
This year, survey questions focused on timely themes including:
- the impact of recent high profile court decisions on commercializing innovation;
- underlying motivations for licensing - business development v. enforcement of IP rights; and
- the impact of ‘patent trolls.'
"Our mission with the survey is to provide licensing professionals with insights and perspective that will assist them in navigating the innovation marketplace more easily and successfully," said Louis P. Berneman, co-author of the survey report and chair of the 2007-2008 LES Foundation Survey. "We found that companies and licensing professionals in the DICE sector were by far the most impacted by and concerned with recent court decisions, business practices and patent trolls."
Licensing and the Courts
Respondents were asked a series of questions related to recent high-profile court decisions, such as Medimmune v. Genentech; Scandisk v. STMicroelectronics; and, eBay v. MercExchange, and their potential implications for their companies and future licensing decisions. Specifically, questions gauged the respondents' awareness, and depth of knowledge of these decisions, as well as the impact on their businesses.
There was a significant positive correlation between respondents' level of concern about the decisions and their level of knowledge of the rulings. That is, those most knowledgeable were also most concerned. Sixty percent of DICE respondents were very or quite knowledgeable about the court rulings. Across other industry sectors, professional services providers and technology creators/users largely view the recent rulings as having a neutral or negative impact on their businesses so far.
"We were surprised that there were not more respondents who were ‘knowledgeable' about these rulings, especially in light of the intense media attention surrounding the cases and the heated public debate over whether the decisions favor licensees or licensors," said Professor Iain Cockburn, co-author of the survey report. "Is this the result of turnover among licensing professionals or are these rulings simply irrelevant to these transaction-oriented professionals in industries other than DICE? We were not able to answer this question from our data."
Business Development v. Enforcement of Rights
About one-third of respondents indicated having entered into licensing agreements to settle or avoid litigation or to enforce IP rights as opposed to enabling a business development opportunity. Again, differences across industry sectors were significant here with 63 percent of DICE respondents reported having licensed to settle or avoid litigation or enforce rights.
"What we found very interesting was that 21 percent of university and government organizations also reported having engaged in licensing to settle or enforce IP rights in that academic institutions have historically been reluctant to do so," said Louis Berneman.
Impact on Patent Trolls
Patent trolls have attracted much controversy and comment in recent years. But outside of some highly publicized cases, the real impact of trolls on the day-to-day business of licensing has been unclear.
Again, while only 7 percent of respondents in the DICE sector reported being concerned about patent trolls, few respondents in other industry sectors indicated that patent trolls have had a substantial impact on their business.
A comprehensive look at the results of the LES Foundation's 5th Annual Survey of Licensing Industry appears in this month's issue of Les Nouvelles, the Journal of the Licensing Executives Society (USA-Canada), Inc., and the Licensing Executives Society International (LESI). The information is also posted at www.lesfoundation.org. Results from previous surveys can also be found on the LES Foundation site.
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MEDIA CONTACT: Lydia Steck, (847) 323-3893, TheCommunicator@comcast.net
About Licensing Executives Society (USA-Canada), Inc., & the LES Foundation
Established in 1965, the Licensing Executives Society (USA-Canada), Inc. (LES) is a professional society comprised of over 6,000 members engaged in the transfer, use, development, manufacture and marketing of intellectual property. The LES membership includes a wide range of professionals, including business executives, lawyers, licensing consultants, engineers, academicians, scientists and government officials. Many large corporations, professional firms, and universities comprise the Society's membership. Licensing Executives Society (USA-Canada), Inc. is a member society of the Licensing Executives Society International, Inc. (LESI), with a worldwide membership of over 12,000 members in 30 national societies, representing over 80 countries.
The LES Foundation was established by LES in 2000, to increase public awareness and understanding of IP rights and to communicate the critical role licensing plays in bringing creativity and innovation to commercial realization.