The sessions on the third and final day of IPBC Global 2018 have now finished; and, like yesterday, the action has come thick and first across a variety of plenaries, breakouts and masterclasses. The members of IAM’s editorial team on the ground at the Palace Hotel in San Francisco - Joff Wild, Richard Lloyd, Jacob Schindler, Bing Zhao and Adam Houldsworth – look at some of the big talking points.

Quality commitment - Today’s proceedings kicked off with a keynote presentation by Benoît Battistelli, the outgoing president of the European Patent Office. The 2018 IAM annual benchmarking survey revealed that the EPO enjoys the highest approval rating among our readers, being perceived to grant the highest quality patents of any of the IP5 offices. Battistelli’s speech set-out how the EPO has achieved this: it has not only built the examiner corps up to 4,400, but also introduced a two-year training programme for new recruits; and the EPO is the only major IP office not to outsource any of its key functions. The office’s patent database is larger than any other, while it offers access to 50 million original patent documents from Asia. It is also the first major office to achieve ISO 9001 re-certification for the whole patent process, Battistelli added. These measures were among the reasons why, as Battistelli pointed out, the office had been able to increase productivity, with patent grants increasing at a faster rate than applications between 2010 and 2017 – and unit costs decreasing over the same timeframe. Further digitalisation of services and a commitment to being at the forefront of developments in artificial intelligence would help the EPO to maintain the quality and efficiency of its services, Battistelli concluded. (AH)

Rise of the machines - There’s no doubt that advances in artificial intelligence (AI) promise to have a profound effect on a wide range of industries, but the technology is still in its infancy. In one of this afternoon’s opening breakout sessions – the World of AI - Digitate’s Harrick Vin emphasised that potential disruption should not be underestimated. In his opening remarks he included a quote from renowned futurist Roy Amara who posited that “we tend to overestimate the effect of a technology in the short run and underestimate its impact in the long run”. Such will be AI’s impact that Vin suggested virtually all industries were likely to be disrupted, including IP. “Patent lawyers will go from doers of work to creators of knowledge that will enable a machine to do a better job,” he commented. To underline the impact that AI was already having, Microsoft’s Nicolas Schifano used the example of basketball’s Dallas Mavericks, who won the 2011 NBA championship after the team partnered with a start-up which collected huge amounts of data and used AI techniques to help change tactics. That led to the Mavericks attempting and making far more three-point shots, something that meant they could overcome their underdog status to beat the favoured Miami Heat. It was one clear example of why AI’s long-term significance is an undoubted slam-dunk. (RL)

Securing a legacy - After eight years, EPO president Benoît Battistelli stands down from his role at the end of this month and will be replaced by current EUIPO executive director Antonio Campinos. As Battistelli gave his keynote presentation this morning it was hard not to think that we were watching and listening to a man very keen to cement a legacy. Seen from afar his achievements are significant: he has transformed working practices at the office, improved efficiency, put the agency on a firmer financial footing and increased Europe’s international influence, all while maintaining the EPO’s reputation as the issuer of the highest quality patents among the IP5. But, of course, there is another side to the story: his reforms have been severely criticised by a part of the examiner corps, with regular strike action, the firing of union officials and complaints to the International Labor Organisation all receiving wide media coverage over recent years. It is undoubtedly the case that a chunk of EPO staff members feel their concerns about the pace and nature of change have not been listened to, and that Battistelli has sought to pummel them into submission rather than to build consensus. For this observer, both sides could probably have played things better; but when it comes to a Battistelli legacy, that is not really going to matter much if in two or three years’ time the EPO is still regarded as being the leader in quality, has a healthy balance sheet and a growing number of applications to handle. Should it also be issuing unitary patents that a Unified Patent Court system is largely finding valid when cases come before it, then basically everything Battistelli set out to achieve when he started his job back in 2010 will have been done and all the negatives will be forgotten. If, on the other hand, things do not pan out well on Campinos’s watch, there is no doubt his predecessor will get a large share of the blame. For good or ill, that’s how these things work. (JW)

China caution - Given the recent doom and gloom from major patent owners over US patent market developments, it is no surprise that China is seen by many as a land of opportunity. The combination of the world’s biggest consumer market, thriving high tech manufacturing activity and IP laws that only seem to get more pro-patent has certainly generated excitement among licensors. But Mark Cohen, who until last year was the US government’s top China IP expert, injected a note of caution in today’s panel on China deal making do’s and don’ts. Cohen noted that patent and technology licensing have never had more political attention, including within China itself. There authorities are focusing on improving local entities’ ability to commercialise their IP. But while this is reason for optimism, Cohen cautions “it’s a little bit early… and there are still a lot of horror stories that we remain to be disabused of”. He points, for example, to language in China’s Technology Import Export Regulations, which in theory greatly restrict the rights of foreign licensors, but in practice have never been litigated. In the area of SEPs, Cohen noted that recent guidelines from the Beijing and Guangdong Higher People’s Courts take a more generous stance than past policies toward standards developers. He described this as less a legal than an economic evolution. But while the change has been rapid, Cohen cautioned: “I hit the pause button when people say China will play by the same rules as the rest of the world.” Look at international trade, for example. When it comes to litigation, Cohen says data does look good for foreign patent litigants. While the 470,000 IP cases so far published give them an opportunity for analysis and strategic thinking that was not previously there, it is also worth thinking about all the cases that are not published – maybe 30% by Cohen’s reckoning – and why they are not published. (JS)

Boardroom advisers - The first plenary of the day – CIPO scenarios, the good, the bad and the ugly, part 2 - put a group of corporate IP chiefs on the spot by asking them how they would handle a range of high-pressure, make or break scenarios. The second of these went like this: “Your CEO asks you to appear before the company board to justify current IP spend and to demonstrate the value that the IP department brings to the company as a whole - what’s in your presentation?” That led to some very interesting comments which showed the breadth of interest and focus of the panellists and their companies - John Mulgrew from Uber, Lisa McFall of Workday, Ilkka Rahnasto from Nokia and John Han of Qualcomm Technology Licensing. Han admitted he would have some trepidation around the topic as he would be concerned why the board was asking the question in the first place. Qualcomm, of course, makes billions each year from its licensing (including a big chunk of its profits) giving Han’s board a very easy way of assessing the value that the company’s IP team contributes overall. For Uber the situation is very different as it has assembled its portfolio largely to get freedom to operate. However, Mulgrew pointed out that there were still plenty of yardsticks they could use. “You can look at benchmarks against peers and you can try to figure out their R&D spend and their portfolio so you can get a number for how many patents per millions of dollars from R&D they spend,” he said. Nokia is closer to Qualcomm in that it now generates more than a billion dollars a year from licensing. That was not always the case and Rahnasto made the point that, as a result, the Nokia board’s interest in the company’s IP function has shifted. “When we didn’t have IP revenue it was all about IP spend,” he said. “Now no one is asking me what I’m spending and it’s all about how we manage [the board’s] expectations.” He went on: “There’s always the question can we deliver this quarter, next quarter, next year, can I deliver something more - and it’s sometimes as difficult as justifying your spend.” Given its string of deals over the last year or so, including a headline agreement with Apple, Rahnasto and his team have certainly been delivering of late. (RL)

Bold answer pays off – Before John Mulgrew took the reins as Uber’s global head of IP, he had to get past a tough interview with Travis Kalanick, the company’s notoriously abrasive founder. Asked point blank whether patents matter to a company’s success, he told the audience at the morning’s CIPO scenarios plenary that he replied no. It was a somewhat risky answer, but clearly one that didn’t prevent him getting the job. In truth, Mulgrew says he knows that isn’t the whole story; and Uber does, of course, file and acquire patent rights. But while many successful start-up founders eventually find religion when it comes to IP, few want to be told that it is a set of legal protections rather than their own extraordinary vision which can make or break their company’s fortunes. And it goes without saying that in many cases they are right. As for Kalanick, the fact that he was personally interviewing Mulgrew in the first place tells you at least something about whether he himself believes that patents matter. (JS)

PTAB splash - In a panel session yesterday afternoon, David Ruschke, chief judge at the US Patent Trial and Appeal Board (PTAB), emphasised the impact that the US Supreme Court’s SAS judgment is having on the board’s work. The decision has significant implications for post-grant administrative proceedings, holding that when the PTAB institutes inter partes review against a patent, it must determine the patentability of all – rather than some – of the claims challenged. “SAS was by far and away the recent decision that kept me up at night, because of its operational impact,” said Ruschke, continuing: “Oil States determined whether we were constitutional or not, so what could we do? But SAS entails a lot of operational changes to what we are doing at the board.” The chief judge noted that of the 850 cases pending at the time of the SAS judgement, 18% had not been instituted on all claims and 44% had not been instituted on all grounds, meaning that many ongoing cases need to be made SAS-compliant. This entails a significant increase in workload for the PTAB, which is now required to revisit those institution decisions. Perhaps more significantly, Ruschke pointed out that difficulties had arisen in reconciling SAS with certain statutory provisions that it has not addressed and with which it is seemingly at odds. Statute 325(d) – which allows the PTAB to not institute on an argument substantially the same as one raised in a prior proceeding at the patent office – is one provision that Ruschke said is now raising difficulties; it was not clear how such arguments – which cannot now be excluded from a case – should be dealt with in final written decisions, he said. (AH)

Gambling gamechanger - Murphy v NCAA may not be a Supreme Court decision with which many patent professionals are familiar, but for some IPBC delegates it looks like an exciting opportunity. In April, the US’s highest court issued a judgment in the case that legalises sports gambling across the country. That may well have created extraordinary possibilities for owners of patents reading on a variety of areas including online transactions, cyber-security, displays and audio/video. With a market estimated to be worth well over $100 billion a year ripe to be exploited, so the thinking goes, bookmakers and others will need to license in all kinds of rights in order to build the sites, terminals and apps that will allow them to service America’s seemingly insatiable appetite to bet on the outcome of races, matches, tournaments and the like. The skill now will be mining portfolios to see what is there that may be applicable. Once that is done it will be time to start talking to, and perhaps educating, companies that up to now have not had to give patents much thought. You wouldn’t bet against some of those in San Francisco with us this week making an absolute killing. (JW)

China advice - That we are entering a more international patent market instead of one almost entirely centred on the US was a big takeaway yesterday. The message has become even clearer today. The rise of jurisdictions like China and Germany makes it crucial to have international assets. In the “Meet the buyers” session breakout, we learned that there are more non-US rights – in particular Chinese and German ones - available on the market: buyers see patent families covering multiple jurisdictions as being more interesting and valuable. An 81% plaintiff win rate and a 93% injunction grant rate from Chinese courts makes the country’s patents particularly attractive. As a result, both operating companies and NPEs are starting to buy assets there, but not yet on a big scale. This is mainly due to the lack of transparency around patents and court decisions. So, good advice for SIPO and the Chinese courts might be to make more information available and accessible outside of the country. Doing this could well give a push to the patent market, as well as help China gain more importance in global patent litigation strategies and transactions. (BZ)

Lets do drinks - One of the big attractions of IPBC is always the opportunity to network with senior members of the IP community in the halls and exhibition space outside of the main conference rooms. But thanks to a series of side events organised by sponsors and others, the chance to make new contacts and meet old friends now extends well into the night. Among the companies to host their own get-togethers on Sunday evening were: our platinum sponsor Clarivate Analytics, who put on a dinner for speakers; Global IP Law Group, who entertained a group of movers and shakers at an uber trendy restaurant in the Mission District; and TiVo, Finjan and Richardson Oliver Insights, who joined forces to pack out a bar a stone’s throw from the Palace. Then, on Monday TechInsights and Via Licensing put on their own separate parties, while Unified Patents, AST and Open Invention Network organised a dinner (a group from which then decamped to a nearby Irish pub where they were joined by a few stragglers from the TechInsights’ soiree). It all means that there are a few sore heads at the morning plenaries. (RL)

New pharma forces - The only representative of a life sciences company in the Patents Plus plenary discussion, Genentech’s Atulya Agarwal, shared some fascinating insights into IP deal-making in the pharma and biotech spaces. The sky-high valuation of companies in the sector has affected how transactions are done, he suggested, pointing out that agreements involving early-stage drugs had become more popular as a result. In such deals, the valuation of patents is often less important than in purchases of later-stage assets, with the collaboration and know-how of the partner having comparatively greater significance. “So the first thing to say is that when we talk about the value of IP, we are not just talking about the value of patents,” Agarwal commented. Deals struck during the development of a drug or therapy also require an IP professional to think carefully about the subject of the agreement; to understand what the eventual product will be, and what the returns are therefore likely to be. Agarwal also said that the growing complexity of scientific developments in the sector mean that life sciences innovations are increasingly protected by several patents – rather than one core patent. The result is that licensing professionals in the sector now need to be more creative in shaping deals, so moving the strategies they employ into closer alignments with those of other technology sectors. Finally, heightened competition means that lengthy deliberations and protracted due diligence is less common in pharma and biotech agreements, he suggested, saying that was now a greater need for fluidity and flexibility in approaching potential deal-making. It’s rare to see corporate IP dealmakers jump from high-tech to pharma, but if Agarwal is right maybe that is going to change. (AH)

5G functions - One topic tackled in today’s session “Toward FRAND 2.0” was how modern licensing departments are going to have to adapt as the number of connected devices balloons in the era of mass 5G connectivity and the Internet of Things. Moderator Jeffrey Carter of HTS pointed out that the volume of devices and the number of companies that make them has the potential to strain IP departments which currently have plenty on their plate when it comes to addressing just terminals. Will we see in-house headcounts grow along with the number of connected products? Ericsson’s VP for FRAND compliance Patricio Delgado said that the question was somewhat above his pay grade when asked. Right now, he said, the primary concern was making sure that these new industries take off so that the predictions about the proliferation of connected things actually come to pass. But as corporates eye costs, concerns about in-house capacity is already a big part of the appeal of outsourced pool efforts like Avanci. In the near future, there will also be a lot more potential destinations for IP professionals, Kenneth Lustig of RealWear added. One thing we do know, he said, is that many manufacturers of soon-to-be ubiquitous connected devices will be relatively inexperienced and unprepared when it comes to patent licensing. That means yet more opportunity for IP pros. (JS)

Moving in - The US and Europe have often proved to be challenging and hostile markets for Asian smartphone makers, especially for newly emerging Chinese vendors. Their phones sell extremely well at home, in India, Southeast Asia and elsewhere, but it’s daunting for them to enter western markets. In the morning CIPO scenarios plenary, one of the discussion points was: “You have been hired by the ambitious CEO of a fast-growing Asian smartphone manufacturer to build an IP group and strategy that will enable it to start selling products into the US and European markets. What are your priorities and how long will you need? The advice was varied. For example, Lisa McFall from Workday argued that one approach would be to not worry about litigation exposure as you were only going to get sued if your product was successful – and if that were the case, you might be willing to pay what was needed to keep it on the shelves. Others, though, suggested that patent acquisition or advanced licensing-in would well-advised – something that would mean having a frank conversation with the CEO about the potential risks and the money needed to avoid them; while another mooted option was to talk to as many potential partners in the market as possible to build partnerships to secure maximum protection. (BZ)

Stanford success - Even for Stanford University, which has a remarkable track record of fostering hugely successful start-up businesses, Google stands out as a clear highlight. In this afternoon’s panel on partnering with universities and other research institutions, Office of Technology Licensing executive director Katharine Ku recounted part of the story of the role it played in the tech giant’s creation: “Two young kids came to us and said “we have the best search engine in the world”, we went “oh ok”. Nobody was interested in it – it was too early, all the existing search engines said “no we’re not interested” and one VC said they’d pay $100,000 for it. Larry and Sergey were really insistent that this was a good search engine which they had started out of frustration.” And so the legendary Stanford patent was born. “We didn’t make them what they are today, but we planted that seed for them – we enabled them to raise money, get venture capital and become a company,” Ku concluded. That, of course, is the power of patents – and it’s one reason why so many have been so frustrated over recent years by what they see as Google’s attempts to deny others what helped to get its business up and running. (RL)

All over – And with that we are done. It’s been a fantastic three days here in San Francisco. The speakers have been top class, the discussions fascinating, the networking gruelling, but thoroughly enjoyable. We’d like to thank all our delegates, panellists and sponsors for making this year’s event such a resounding success. It’s time to head home for a brief rest before thoughts turn to planning next year’ event in Boston, as well as IPBC Asia in Shanghai at the start of December. It just never stops – thank the Lord! (JW)