Chicago IP Attorney & Lawyer : R. David Donoghue : Chicago IP Litigation Blog

The Chicago Tribune ran an interesting article by Ann Meyer yesterday (click here to read it) discussing companies monetizing IP, specifically patents and dormant trademarks, not just through the more traditional means of litigation and licensing, but also through sales of the IP.  While there are numerous brokers who help sell IP, the article focused on Chicago-based Ocean Tomo's patent auctions.  It is not very surprising that in a down economy companies are looking to their IP as a significant source of value.  Nor is it surprising that companies would seek to avoid the upfront costs of both licensing and litigation in favor of a more immediate sale for IP the company is not using.  Of course, the continued health of the patent, trademark and copyright dockets in the Northern District of Illinois and across the country prove that companies continue to monetize their IP and protect market space from competitors through more traditional means as well.

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Here are several stories that did not warrant a full post, or that were so well done by another blogger that there was no point in recreating the wheel:

• The Federal Circuit upheld Judge Coar's preliminary injunction in Abbott v. Sandoz, No. 05 C 5373 -- click here to read the Federal Circuit's opinion and here to read the Blog's prior posts on the case.  Dennis Crouch at Patently-O has a good post explaining the central issue of the case -- a defendant's burden of proof regarding invalidity in the likelihood of success analysis.  Judge Newman wrote the majority decision with Judge Gajarsa dissenting.  Crouch sees the case as a "good vehicle" for en banc review of the preliminary injunction standard.
   
• Ocean Tomo is holding its 8th IP auction at home in Chicago this Wednesday and Thursday.
   

• Michael Sadowitz at the MTTLR Blog has a great post (click here to read it) discussing one of the big post-eBay unknowns, who sets post-verdict damages when a permanent injunction is not issued, judges or juries.  Sadowitz looks at a string of Eastern District of Texas cases letting juries set post-verdict damages.  Sadowitz also notes that the few courts that have looked at the issue have split as to whether post-verdict damages can be severed from the damages portion of the trial. 
   
• Finally, having mastered all things drug and device related, the Drug & Device Law blog has moved into the patent realm, with some excellent analysis by their colleagues Kevin McDonald and Larry Rosenberg of Jones Day.  The post (click here to read it) discusses a recent Federal Circuit decision which held that cash payments made to settle Hatch-Waxman patent litigations do not violate antitrust laws, under certain conditions:

On October 15, 2008, the Federal Circuit joined the growing list of federal courts to hold that the use of cash payments to settle Hatch-Waxman patent litigation does not violate the antitrust laws as long as (1) the settlement excludes no more competition than would the patent itself and (2) the claim for patent infringement and/or validity is not a “sham,” that is, not “objectively baseless.” In In re Ciprofloxacin Hydrochloride Antitrust Litigation, No. 08-1097, 2008 WL 4570669 (Fed. Cir. Oct. 15, 2008), a unanimous panel of the United States Court of Appeals for the Federal Circuit affirmed the summary judgment granted to Bayer by the United States District Court for the Eastern District of New York, holding that Bayer’s settlement of patent litigation with a generic pharmaceutical manufacturer did not violate the antitrust laws.

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Managing Intellectual Property published its annual list of the fifty most powerful people in the international IP community (hat tip to Patent Docs for pointing it out).  Click here for the list (subscription or two week free trial sign up required).  There were two honorees with Chicago connections:

• Rhonda Steele (#8) -- Steele is both the president of INTA and Asia-Pacific marketing properties manager for Mars.  While Steele does not necessarily work in Chicago or on Chicago-specific IP, Mars makes Fun Size versions of its 3 Musketeers, Snickers and Milky Way candy bars in Chicago.
  
• Jim Malackowski (#34) -- Malackowski is a founder of Chicago-based Ocean Tomo, as well as its president and CEO.  Among other things, Ocean Tomo is well known for its patent auctions (at leas the last several of which have each totalled more than $10M in sales), IP valuation services and damages expert work.

These IP luminaries share the honor with Second Life avatars (#1), the PTO's Director John Dudas (#4), the Federal Circuit's Judge Michel (#9), Harry Potter (#14),and  blogger and Google copyright counsel William Patry, of the Patry Copyright Blog.

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IP Law & Business recently named its top 50 IP lawyers under 45 years old (free registration required).  Two of those 50 are Chicagoans -- David Callahan and James Malackowski.

• David Callahan is an IP litigator and partner at Kirkland & Ellis.  As I have mentioned before, I had the opportunity to work with Callahan early in my career.  So, I can confirm that he is a top notch litigator.  Here is what IP Law & Business said about Callahan:

A political science major from the University of Chicago, David Callahan learned electronic warfare, including cryptography, as a U.S. Army Reserve captain. The military discipline has served him well. A University of Michigan Law School grad, Callahan has commanded the defense in key patent infringement wins for 3M, Amazon.com, and Gast Manufacturing in cases covering everything from one-click Internet payment systems to chewing gum additives and dental compounds. He has excelled at big-ticket defense cases involving multiple patents and parties, where his leadership and organizational skills-to say nothing of his legal marksmanship-force plaintiffs to duck.

• James Malackowski is the President, CEO and founder of  Ocean Tomo, a Chicago-based and IP-focused merchant banc.  Here is what IP Law & Business said about Malackowski:

This University of Notre Dame-trained CPA has made a name as a patent market-maker. Twenty years ago he cofounded a firm that did patent valuations. In 2003 Ocean Tomo started offering investment banking services, and it broke new ground in 2006 with the first live auction for IP. The company has conducted six so far-the most recent in April in San Francisco-that have generated $70 million in transactions, including the $15 million sale of guitarist Jimi Hendrix's catalog and the $6 million sale of patents related to digital systems media and management. The latest innovation from Malackowski? He is trying to market insurance that would lessen the cost to companies of patent troll attacks.

Congratulations to both Callahan and Malackowski.  The honor is well deserved for both men.

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Ocean Tomo recently had their first "town hall meeting" to discuss its plans to open an IP Enterprise Zone (the "Zone") in Chicago -- which sources say had an impressive attendance.  Ocean Tomo plans to choose a site in downtown Chicago where it plans to house over one hundred representatives of companies interested in buying and/or selling portions of their IP portfolios.  It sounds like it will be the equivalent of a very sophisticated farmers' market.  IP professionals will bring their goods to the Zone while others come to look for IP that they want or need.  You can read more about it here.  Ocean Tomo plans to open the Zone in mid-2008 and is partnering with city and state government, as well as the Chicago Chamber of Commerce to turn its vision of the Zone into a reality.

In addition to housing IP professionals and facilitating deal-making, Ocean Tomo also expects to open the Intellectual Property Exchange Chicago ("IPX Chicago"), which will be the first securities exchange with an IP focus in the Zone.    IPX Chicago is expected to begin operating in Q1 2010.  Ocean Tomo explains its IPX Chicago as follows:

IPX Chicago will enable investor and company participation in a broad spectrum of IP-related financial products such as qualified equity listing/co-listing; IP related indexes, futures and options; IP backed bonds and securitizations; patent rich company IPOs; and, new IP-based exchange-traded products.

Ocean Tomo is also seeking responses to a survey regarding interest in the Zone.  If you are interested in taking the survey, click on the top link on this page.  The Zone appears to be a very exciting idea with some momentum and it could be great for Chicago generally and Chicago's IP community specifically.

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Last Thursday, Ocean Tomo held its third live patent auction in Chicago.  According to the Chicago Sun-Times report, nearly 300 people attended the auction live (I understand others bid by telephone) and that 50 patents were offered for bidding, generating $11.4M.  The Sun-Times also reports that Telecommunications Corp. sold a video-on-demand patent portfolio for $2.75M.  And the Infinite Monkey Theorem blog reports that an anonymous bidder paid $2.6M for a mobile social networking patent.  According to the IMT blog, the patent "bridge[s] the online into the real world, the patent's main claim covers the use of mobile location information in conjunction with online information. This is a broad application which provide a location-based boost to gaming as well as networking sites like MySpace or upstart mobile IM players like Twitter."

Ocean Tomo's next live patent auction will be in Chicago this October.

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