Peer to Peer Magazine

PEER TO PEER: THE QUARTERLY MAGA ZINE OF ILTA 38 Making sense of these changes and understanding their impact on patent value and the opportunities they present is challenging. In response, Skadden has developed a set of tools and services and is implementing a broader approach to using empirical insights and cutting-edge statistical research to enhance traditional legal practices in patent transactions, disputes and monetization. CHALLENGES AND OPPORTUNITIES In the media, breaking headlines of a new blockbuster patent lawsuit, major Supreme Court decision or legislative proposal, or chart-topping corporate deal centered on patent assets have become commonplace The attention is not undeserved. Last year, five Supreme Court decisions addressed some of the foundational tenets of U.S. patent law and reshaped the boundaries of what can be patented. Notwithstanding the potentially dramatic implications on patent value, patent-driven deals continued to surge from Silicon Valley to Wall Street (and everywhere in-between). Issues involving "patent trolls" continue to persist, and although recent USPTO initiatives have created new defenses against some of the most abusive practices, members of Congress and industry leaders are calling for more sweeping reforms. Amid the cacophony, two signals have become increasingly perceptible: The ways in which patent quality is subject to scrutiny and the extent of such scrutiny have proliferated, thanks to the introduction of revised legal standards for patent validity and new procedures for reviewing patents before the USPTO The potential value of U.S. patents has increased, as the types, complexity and scale of patent transactions and monetization activities have skyrocketed With these two waves colliding, it is more important than ever to accurately identify the most valuable patent assets in a company's portfolio and the riskiest patent disputes across a company's docket. Simultaneously, the sheer volume of patents and patent cases in question has grown exponentially. Thus, there has never been a greater need for tools and metrics to quickly and quantitatively assess patent value and risk expectations. RESEARCH AND FINDINGS At Skadden, we have formed a Patent Analytics Team to conduct new research and develop tools and techniques for better handling the challenges and prospects of managing patents in today's economy. I lead the team, and, with academics from the Kellogg School of Management and MIT-Sloan School of Business, I have published multiple peer-reviewed studies analyzing the factors significantly associated with patent infringement awards and patent enforcement value. This research has discovered new insights about patent value and identified key statistical markers to watch for when evaluating transactions and disputes. One of our recent studies, for example, published in the International Review of Law & Economics, analyzes all patent infringement awards granted by U.S. District Courts from 1995-2008. By hand- coding over 100 variables regarding the parties in each case, claims and litigation process, and attributes of the asserted patents, my co-authors and I were able to construct a regression model that explains over 75 percent of the variation in award value. We then use this model to identify and quantify the statistical effect of key case factors on expected liability. A second study, which is forthcoming in the summer CASE STUDIES About the Author Jonathan Ashtor leads the Patent Analytics Team at Skadden, Arps, Slate, Meagher & Flom, LLP. The team develops and leverages statistical models, tools and databases to enhance traditional legal practice with complex analytics of patent assets, transactions and disputes. Jonathan's empirical patent research is widely recognized, and he has published multiple peer-reviewed studies. Contact Jonathan at jonathan.ashtor@skadden.com. The Future of Patent Analysis at Skadden There is no shortage of new developments involving patents these days — from Congress to the United States Patent and Trademark Office (USPTO) to the courts to the red-hot patent marketplace.

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