As patent pools expand into new verticals, what are the major forces in shaping successful pool operations?

Like any other IP portfolio, the strength of patent pools depends on quality, not necessarily quantity. Those seeking to license patent pools benefit from pools having strategic, foundational assets, which may be the ones driving licences and rates. There is undoubtedly marginal value in a larger patent pool than a smaller one, but any successful pool really needs a critical mass of tactically curated assets that can withstand adversarial proceedings. While licensing is far more efficient, there is always the possibility that patents in a pool will need to be litigated and as potential negative outcomes of litigation grow, so too does the likelihood of successful licensing campaigns.

Some verticals are already saturated with extensive portfolios, driving expansion into other areas. Some areas derive value from the broad base to support licences, while others may be able to command larger relative rates. To maximise value, the strategic curation of pools within new verticals, including the substance of the assets within the pool, should be cohesive with the pool’s anticipated licensing model.

You have a wealth of experience handling tech-oriented cases. In such a rapidly evolving landscape, what do you anticipate the biggest changes will be in this industry over the next 12 months, and how are you preparing for these? 

I see two big challenges: the difficulty of obtaining injunctive relief for patent infringement and outside meddling in the assignment of patents to judges. 

The Supreme Court’s 2006 decision in eBay v MercExchange resulted in the effective abolition of injunctions in patent cases. With the elimination of an entire form of relief, the bar has been lowered for infringers to simply carry on, confident in the knowledge that money paid in the distant future can cure all patent infringement ills of the past. It will be interesting to see if that changes anytime soon, either through legislative efforts or new case law.

We have also started seeing proposals affecting case assignments to judges from numerous organisations, including the Judicial Conference of the United States. Whether these case-assignment proposals are the result of high-profile, politically sensitive cases or have been seemingly instigated by complaints of alleged forum shopping by familiar defendants in litigation cases, the result is the same. The federal judiciary is blessed with many brilliant legal minds, including some with a particular background or interest in patent cases. It seems manifestly unfair to artificially manipulate the district court case-assignment practices to force parties to litigate with a different set of rules in some cases compared to others.

What legislative developments have had the greatest impact on US patent litigation strategy in the past few years, and how have you adapted your own strategy in response? 

We have not seen much patent legislation enacted in the past few years, but we have seen some proposals. Among the most recent are the Support Technology and Research for Our Nation’s Growth and Economic Resilience (STRONGER) Patents Act of 2019 and the Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act in 2023. Both were introduced by Senator Chris Coons, among others. 

The STRONGER Patents Act appeared designed to restore balance to the patent landscape by making it possible for owners of infringed patents to obtain injunctive relief. The STRONGER Patents Act sought to help eradicate the scourge of so-called ‘efficient infringement’, where infringers found it cheaper and more efficient to infringe patents than to license them.

The PREVAIL Act appeared designed to rebalance proceedings before the PTAB in inter partes review by limiting repeat petitions and ending duplicative PTAB and district court proceedings.

Neither of these have been enacted into law yet, but they represent a growing appreciation among legislators that the US patent system has veered too far against innovation and needs to be refocused. 

How do you build and maintain trust and effective communication with your clients? 

Constant communication and blunt assessments have worked for me. We instil trust in clients when they hear the full array of possible outcomes and strategic options available. We help them avoid surprises and make the best strategic decisions when they have a comprehensive understanding of litigation or other legal processes, which includes knowing about the potential for – and likelihood of – downside risks. Once the client makes a strategic decision, I work as hard as I can to ensure that decision proves to have been the correct one.