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The Wall Street Journal's Market Data Group joined forces with The Patent Board to rank major industry players by their IP impact on the market. The most recent breakdown of consumer electronics companies, for example, has Sony taking the lead on a variety of metrics, despite the fact that Sony has experienced a near-40% drop in stock value year to date.
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Forbes reports that a portion of Eastman Kodak's intellectual property portfolio will be sold in bankruptcy proceedings for just over half a billion dollars. The buyers are myriad -- Apple, Google, Samsung and Facebook are leading contenders. And the deal is brokered by Intellectual Ventures, a non-practicing entity widely reviled as a patent troll.
One wonders how the value of these patent monopolies will be diluted by divvying up these spoils among so many competitors. One also wonders why all these companies are getting in bed with Intellectual Ventures, which adds greatly to its credibility and clout.
Kodak's IP portfolio is deep and broad, as described by NY's Jewish Voice website. Kodak even argued during bankruptcy proceedings that Apple owed it over $1 billion in patent royalties, so it remains to be seen whether this purchase will be set-off against any of those alleged backpayments.
At one point, Kodak claimed its IP portfolio was worth as much as $2.6 billion. The deal must still be approved by the bankruptcy court, but it's looking good -- loans were extended to Kodak on the condition that its IP portfolio was sold for more than $500m, and it just barely made it.
I'm sorry, this is hilarious. Kilpatrick Townsend & Stockton summarized a recent copyright dispute with a flair for the dramatic. A musician had not paid his attorneys, and was ordered to transfer the rights to collect royalties to a receiver, which would apply royalties towards the legal bills. Simple enough, right? This works much like a lien on real property or a wage garnishment.
The musician, however, disputed the court's ability to force him to transfer his copyrights, relying on a Cold War era provision that governments cannot seize copyrights from authors, presumably intending to prevent books from being banned in the case of... what, I don't know. The court did not find this persuasive and ordered the copyrights transferred to receivership.
The important takeaways for you are that virtually any IP rights can be transferred, leveraged, sold, or commandeered (unless you're a Communist), and that you should pay your legal bills.
I don’t have any words to explain the massacre of December 14, 2012. I won’t try.
I want to describe my town, because in light of a gutwrenching tragedy, it’s hard for the strangers who swoop in to report the news to suss out what makes us “us.” I’m disappointed to see CT newscasters who seem shocked that we have “woods” behind Sandy Hook Elementary School. The national news, I get it – they check the website and rely on the on-the-ground reporters. The President? In fairness, he mispronounces things all the time, so what’s the difference between Newtown and Newton, anyway? But for those of you who give a damn, this is what makes Newtown home to me.
Newtown is my lifelong home. I was born in Danbury hospital and spent my first few years in a tiny house near Yogananda Street in Sandy Hook. Yogananda Street used to be a dirt road to some cow fields. I would walk with my parents and dogs through the meadows, finding brightly-colored spent shotgun shells in the grass long after hunting season was over. We moved across town when I was four, and the cow fields grew into a sprawling subdivision.
Newtown has been described as “idyllic,” “sleepy,” “rural,” and “quiet.” Sure it is. But it’s also huge, vibrant, and full of life. Founded in the early 1700s, Newtown today has just over 27,000 residents in less than 9,000 households (that’s a lot of kids). We are spread over 60 square miles.
60 square miles! That’s a big town! In fact, it’s the 2nd largest by acreage in the whole state of Connecticut. We live here because we love trees and grass and sky. We like having a little space between us, but we love our neighbors. You can drive for 30 minutes in a (relatively) straight line and still be in our town. We have 3 dedicated exits off of Interstate 84, and we’re an hour drive from Hartford, Stamford, and New Haven with ready access to Metro North trains to New York City.
We are an uneventful middle class community, full of hardworking people. Doctors and lawyers and financial advisors work here, elsewhere in CT, and in New York City. We have farmers, truck drivers, and factory workers. We have hairdressers, shopkeepers, and restauranteurs. We have local small businesses and national headquarters.
We have an anachronistic but charming giant iron flagpole smack dab in the middle of Main Street and the intersection with Church Hill Road. It’s 100 feet tall and, in one incarnation or another, has been at that intersection for over 130 years. It’s iconic and hard to drive around. But it’s breathtaking at sunset.
We have a two-dollar movie house inside the old Town Hall, where we can watch second-run Hollywood films at 7 and 9pm. On weeks of school holidays, they are sure to add a G-rated matinee for the kids. The board game SCRABBLE was invented here. We have a “Washington Slept Here” memorial and a 9-11 memorial. Every December, we have a communal Christmas tree lighting in the grassy 20-acre Ram’s Pasture preserve in the middle of town.
Our firefighters and EMTs are all volunteers, supported by community donations. Our police officers are top-notch, as far as I know. The DARE Officer who was assigned to the Middle School when I was attending is now the Chief of Police. (Luckily, I don’t see him much!)
It’s a town for families, a bedroom community where one or both parents work and the kids are busy with extracurriculars. We have an organic farmer’s market in the summer, and several outstanding farm-to-table ice cream venues. We still have hayfields and a few dairy farms. Horses are popular – both in commercial stables and backyards. People let their dogs roam off leash. Some people don’t lock their front doors. Installing a few speedbumps on a major “cut-through” from the highway caused a scandal.
We don’t have apartments or “multi-family” homes beyond the standard in-law apartment in a basement or over a garage. We have a few condominium complexes for residents over age 55, but it’s largely single-family homes on grassy lawns or tucked in woodlands. We also don’t have “drive thru” food stores like McDonald’s. We have a Dunkin’ Donuts and a Starbucks, but their signs have to comply with strict size and lighting rules.
It’s hilarious to me when newscasters describe our town as “rural.” We are next-door to Bridgewater and Roxbury in Litchfield County, where working farms are the predominant use of land. Even our neighbors to the south and east like Oxford and Bethany have much more open space and undeveloped land. Having seen the town expand from a populations of 10,000 or so when I was a child to nearly 30,000 in my lifetime, I feel a little bit crowded. New businesses surprise me. Old businesses closing sadden me, even as they’re replaced with a new gym, day care, or frozen yogurt shop.
Our schools are excellent. When I was in high school, Newtown High School earned a Blue Ribbon School designation, ranking top in the nation. Our schools have outstanding theatre and music programs, and high-achieving athletic programs. It’s a classic “American Dream” kind of town.
Sure, we have a few bad apples. Someone I went through school with was busted for dealing heroin in a nearby city after he dropped out. Sometimes people have domestic disputes. Once, we had a spate of nonviolent bank robberies.
I am Facebook friends with dozens of my classmates from elementary and high school (I went to Hawley School for elementary school), but it struck me that I’m one of the few remaining residents. It’s not a hopping place for a single thirty-something. Most of the restaurants close their kitchens at 9pm and many popular spots are closed on Sundays. Like our neighboring towns, we got creamed by Hurricanes Irene and Sandy in 2011 and 2012.
I grew up here my whole life, moving back after college and later law school. Now, as an intellectual property attorney, I’m building my law practice here. I also sit on the Economic Development Commission and am active in local politics. Newtown is my home. And it’s not spelled “Newton.”
The New York Times Dealbook outlined a sea change in Silicon Valley. First, the dot-coms were like pin-up dolls to be coveted. Then the social media platforms and games skyrocketed to the fore, like college co-eds suddenly available. Now, with broken hearts and tattered wallets, the stars of Silicon Valley are turning to much more practical partners: big-data analytics, IT security, and cloud storage. Not sexy, perhaps, but sensible.
Mark Suster runs a blog as an entrepreneur-turned-VC and has provided this necessary, essential, and no-holds-barred outline of how the math of dividing up equity stakes in a venture actually works.
Mr. Suster provides extensive details and additional links, but in summary, entrepreneurs MUST take the time to learn about all the ways equity and options can be divided and triggered. You cannot afford to be uneducated if you are signing your rights away. If you don't understand the VC's term sheet, ask. If they won't explain, get an attorney who has done this before to go to the negotiations with you.
The rule of thumb about selling your company is as follows: you will sell one company at a time, maybe one in your lifetime, maybe ten. The people investing or buying your company do this every day. They buy and invest in companies professionally. They will bring an A-Team of accountants and attorneys to make sure they get the best deal because that's how they make money. Don't be intimidated, just step up your game.
The Wall Street Journal dropped a tidbit that beleaguered Kodak, now in Chapter 11 bankruptcy, received a bid for its patent portfolio from Google and Apple.
That's right, Google and Apple jointly. As in, together.
These bitter rivals in the smartphone space must have something up their sleeve for cameras if they can find common ground here.
Apple is currently suing the heck out of its supplier-cum-competitor Samsung for iPhone patents. Last month, a US judge dismissed a claim by Apple that Google (new owner of Motorola Mobility's patent portfolio) was abusing its leverage to charge too-high royalties to Apple for the Motorola patent licenses.
Now, it seems, these who behemoths are playing nice. Stay tuned...
The UK Daily Mail Online reports that a contractor in Virginia sued a women for nearly $1M in damages, alleging she defamed him in reviews she posted on Yelp, Angie's List, and other services websites. The case apparently has legs, as a judge today granted a preliminary injunction that the woman remove her scathing reviews (which allege shoddy work as well as theft) from the websites until the suit is resolved.
This is not the first of such cases, but it may have a good chance of success anyway. In 2011, a plaintiff cosmetic surgeon's case was dismissed and the surgeon ordered to pay $20k in attorneys' fees to a former patient who had posted a bad review. A computer graphics company in Florida sued a former client for defamation as well, alleging a 70% drop in business. The outcome is still pending there.
Defamation -- that is, a knowingly false statement published about someone or their business which causes damages -- can be expensive. If you experience a loss in business as a result of false bad reviews, there are steps you can take instead of or in addition to suing for money damages. The most important thing is to "stop the bleeding" and try to improve your "Search Engine Optimization" (SEO) so that the recent bad review is not the first thing that pops up when someone searches for you.
SEO can be expensive if you outsource, but it might be worth it to put the hours in yourself. The goal is to frequently update your online presence. If you don't have a website, get a free one and start blogging immediately. Comment in a positive way on other websites while using your real name. Use your online presence to promote other positive things -- maybe you volunteer at a soup kitchen, maybe you foster rescued puppies, maybe you crochet -- so that, over time, there are many positive associations with your name and your business, which may dilute one really stinky review.
You can also contact the sites directly, such as Angie's List, where the premise of the list is that the reviews are honest. Initiate a dispute or complaint through their internal policies, particularly if the bad review contains gross lies that you can prove (for example, they allege you were paid but did not perform any work).
ABOVE ALL, DO NOT RETALIATE DIRECTLY.
I don't care how clever you are. I don't care how biting your sarcasm is. I don't care if you are the funniest comedian ever to run a plumbing company. DO NOT ENGAGE or mention the name of the bad reviewer. Do not badmouth them. Do not make snarky asides about "some people." Publicly denouncing a bad review has the OPPOSITE effect, especially regarding SEO. (See more about the "Streisand Effect" here. Simply, the harder you try to keep it quiet, the more attention you draw to it.)
The search engines are programmed well. It won't make too much impact on a search result list if you post 100 identical blog posts about how great you are. Give it time and thought, and vary your content. On the other hand, mentioning the site where the bad review appears or the name of the bad reviewer gives them credibility in the search engine's algorithm.Stay on message: you are a professional who works hard and gives good value. You love puppies and baby ducklings and orphans in Ghana.
I repeat: DO NOT ENGAGE directly. Getting in a "flame war" online just makes you look unprofessional and mean. For an example of snark gone horribly wrong, please check out the comments (made by the FOUNDER of a company) in response to a review of a competing product here. Scroll down to Frank Rivera's comment starting on May 15, and don't imitate it.
Today's Wall Street Journal highlighted a tricky area for businesses. The music-streaming company Pandora is struggling to stay in the black in light of increasing royalty fees due to licensing the music it streams.
Companies young and old can get in this bind: you need business to be in business, so you negotiate terms. Unforeseen and unforeseeable things happen, and the terms stop being tolerable. What's a company to do? Without paying the license fees, Pandora has no material with which to attract users to its site, and advertisers will pay less to access that audience.
If you business model is attracting advertizing dollars rather than selling a product, an increase in the cost of attracting an audience is your greatest fear. Pandora does have a hybrid model, where they generate revenue both from advertizers and subscription costs, but it's at the mercy of the royalty rates negotiated earlier.
When you're building your business plan, it's important to be realistic (and not overly optimistic, a common pratfall). Part of that reality-check is expecting things to change, and building in escape hatches in your long-term agreements. Pandora is now in a position where they are trying to lobby the government to lower the cap on music royalties, a move that is not popular with artists. Try to avoid that last resort!
Earlier this year, we blogged about the co-founders of MIXED CHICKS hair care suing hair-care giant Sally Beauty for willful trade dress infringement (among other things of course) with the "Mixed Silk" hair care product line and concept.
Guess what? The ladies won -- nearly a million dollars in actual damages plus punitive damages that push them over the $8 million mark for the jury verdict.
This is a big win for small businesses. The plot line of this case is a common danger to entrepreneurs, and (in my experience) a reason many entrepreneurs go off the rails when they need to scale-up their idea. Founder(s) work hard to build a new product that solves an unmet need, get it off the ground, then, whammo! Instead of licensing or even a takeover, a bigger company simply steals their concept, goodwill, and, in some cases, the product itself.
What's a small shop to do? It's tough enough to keep the doors open at an early stage, let alone pay for extra lawyers. You could be crushed in litigation paperwork, driving up your costs until you simply can't afford to maintain the lawsuit (a common tactic, sadly).
Hopefully, after this precedent, a wake-up call will go out that even small businesses can win when they're in the right. Don't steal stuff, even when you think you can get away with it!
Hawley Legal Resources, LLC
Contemporary and interesting issues affecting small business.