2020 was a tumultuous year for all, and quite likely, the most unusual year we will ever experience in our lifetimes. As we take stock and look to a brighter future in 2021 and beyond, I sat down virtually with some of the most preeminent visionaries in the IP Monetisation and Licensing space – Arvin Patel and Elvir Causevic – to canvass their expert opinions on the key observations they made in the past year and how they envisage the market will evolve as we emerge from the pandemic under current global political climate.
Arvin Patel is the COO, Invention Investment Funds of Intellectual Ventures, formerly Chief IP Officer of Tivo and Technicolor. Arvin has had over two decades of experience running large licensing businesses, in addition to being an inventor, visionary and leading voice on entertainment and technology innovation, as well as a regular Forbes contributor.
Elvir Causevic is the Co-founder and Managing Director of Tech+IP Capital, which recently spun out of Houlihan Lokey. A recognised technology and IP investment banking professional, Elvir focuses on public and private board advisory, M&A, capital formation, and financial restructuring of technology and IP businesses. Formerly Managing Director of Ocean Tomo IP consultancy Strategic Advisory Services practice, Elvir is also an inventor and a true entrepreneur having founded several high technology companies, two of which were ultimately acquired by Fortune 500 companies.
Having been involved in three of the largest deals of 2020 (Xperi/TiVo, TiVo/Comcast, and IV/RPX), Arvin comments: “The IP market is far from dead. Deals are still getting done, patent owners are adjusting their strategies to the new realities and figuring out how to license. The ITC and European venues are becoming more important. The SEP marketplace is starting to become a bit more predictable and is getting sorted out.”
Elvir shares a similar positive sentiment, commenting on the breadth of investors and the unprecedented amount of private equity capital that has been made available for investment in IP. “There used to be 5 to 10 standard buyers or investors with the likes of Fortress, Vector, Acacia, etc. Now a typical transaction often is pitched to over 100 targets with multiple rounds of bidding among a half-dozen serious bidders, and we are closing deals at record time. We are also seeing much more sophisticated and competitive offers from private equity firms who previously had no IP assets.” Tech+IP Capital has clearly played an instrumental part in driving interest in these transactions but this is a strong indication that IP is at the forefront of many of the private equity investor’s mind and will continue to drive value of intangible assets as an uncorrelated asset, especially during uncertain times.
As political tension intensified and nationalism has become more prevalent, IP deal-making is not completely impervious. Over the years, Elvir and his team have closed deals with companies like Huawei and Xiaomi, but he believes that these types of transactions will be more challenging. “Particularly in the space of semiconductor, biotech, AI and robotics, national security measures have discouraged Chinese buyers and investors with whom there had been strong interest in the past.”
With the Biden administration, Arvin predicts that more Big Tech leadership will be brought into the USPTO, and their court appointments (PTAB, ITC, CAFC, DCs) will likely be more friendly to Big Tech than the last administration, however, those changes take time to have any significant impact. “There’s some new legislation that’s beginning to percolate, but with such slim majorities in both houses of Congress I don’t suspect that we’ll see any radical changes.” Recalling the Obama administration and its anti-patent stance, Elvir is hopeful that such IP policies from the new administration will be more balanced and informed.
Speaking of other global IP powers, Arvin notes that “Europe is becoming more important as IP enforcement venues. This isn’t a new trend, it’s been going on for years. But Germany and the UK are both becoming more central to global SEP enforcement, and the EU competition authorities are taking a leading role in sorting out the SEP marketplace. With regard to China, I think we’ll have to wait and see how things shake out. The geopolitical winds are changing with regard to China. Supply chains, WTO rules, tariffs and trade, are all in a state of flux at the moment. The combination of increased trade tensions and the pandemic have made the relationships between China and the West more uncertain. It’ll take some time for that to sort itself out.”
Looking ahead, both Arvin and Elvir expect that the proverbial IP pendulum will swing closer to the middle. “We already see more collaboration amongst various smartphone ecosystem participants who had been at war with one another for some time. Most of these companies are tired of endless litigation, but they are not prepared to give away their IP for free or overpay either. Given the new complexities of 5G and IoT, they will have to work together through collaborative arrangements like patent pools, and this is also an area where I see a lot of growth.” Elvir comments.
Arvin believes the global adjustments that are taking place will resolve in 2021. “I think we’ll get back to something that resembles normal. Some industries have really thrived during the pandemic, while others have suffered. That has implications for the availability of IP assets and the emphasis on licensing across markets. Change always brings opportunity, and we’ve gone through a pretty major change. I’m looking to take advantage of those opportunities in 2021.”