The Business of Intellectual Property: When Patents, Technology, Competition and Finance Converge


Course Code:
LAW 720
Law Honors/Pass/Restrd Cr/Fail


From President Obama deriding patent trolls in a State of the Union address to the smart phone patent wars regularly making headlines in mainstream press, patents are no longer a topic relegated to engineers, scientists and patent attorneys. Now a critical area for the C-suite, board rooms, trading floor, political arenas and beyond, today's debate encompasses a range of complex topics, including the role of patents in promoting innovation, protecting market share and shaping technology; how patents can drive strategic and competitive advantage; proper valuation of assets; patent assertion entities that arose to take advantage of inefficiencies in the system; and what a balanced patent system requires. As a framework for our class discussion of these topics, we will examine the market, legal and competitive forces that drove five major tech companies (Apple, Blackberry, Ericsson, Microsoft and Sony) to form a consortium called Rockstar to buy for $4.5B the the bankrupt technology giant Nortel Networks' massive patent portfolio. Their move kept the patents out of the hands of another bidding consortium (Google and Intel), and Google's response to the loss included an acquisition of Motorola and its extensive patent portfolio for $12B. We will then follow Rockstar's ensuing licensing campaign that led to eight patent lawsuits and nearly 30 patent validity challenges involving major competitors. With dozens of additional offensive and defensive actions looming, industry observers predicted Armageddon as corporate relations continued to fray. Instead, a groundbreaking resolution was brokered that all sides considered a success. In what is recognized as the industry's most complex and innovative intellectual property deal, RPX, a public company focused on reducing patent risk, brought together a cross-industry syndicate of over 40 US and foreign licensee participants, including Google and Cisco, to purchase from Rockstar for $900M its remaining patent assets, resulting in a dismissal of all actions and a wind down of Rockstar forever. This case study will be the basis of an interdisciplinary look at how patents, technology, competition and finance converge in the real world, including corporate, marketplace, policy and regulatory dynamics. Instruction: The class will be led by instructors Mark Chandler and Mallun Yen who will provide a unique insiders' view of the transaction and overall patent ecosystem as it intersects with business, technology and competition. Guest speakers, including senior executives who were involved at each stage of the transaction, will provide even greater visibility into real-world dynamics and the players' intrinsic and extrinsic motivations. Additional guest speakers who are the foremost experts in their fields will drop in to discuss how similar challenges play out in their disciplines, including the nuclear arms race, providing further opportunity to deepen understanding as we explore ways in which the patent system might evolve to better address modern technology and business needs. Subject Matter Covered: Students will gain practical insights into how patent, business, competitive, and marketplace dynamics interplay in the real world, as well as participate in deal structuring, consortium-building, and valuation exercises. No technical or legal background is required. Class Format: The expected class format will include a focused substantive discussion followed by either a senior executive guest speaker or a class exercise. Special Instructions: This class is limited to 25 students, with an effort made to have students from SLS (15 students will be selected by lottery) and students from the Graduate School of Business and the School of Engineering (10 students). Non-Law students may apply for this class by submitting a Non-Law Student Add Request Form available at Elements used in grading: Class Participation, Written Coursework & Attendance.

Past Offerings

2015-2016 Spring

The Business of Intellectual Property: When Patents, Technology, Competition and Finance Converge LAW 720 Section 01 Class #26084

  • 3 Units
  • Enrollment Limitations: Lottery 15
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