Tag:  “Sweden”  | (11) posts

Fertile grounds for patent applications

According to a recently published survey by the Swedish Patent and Registration Office (PRV), geographical areas where universities and large companies are present promote innovation, and consequently, also the number of filed patent applications.

Some Swedish counties (e.g. Stockholm, Uppsala and Skåne) stand out in the PRV statistics of the number of national patent applications per capita. Common to these counties is that each of them has several renowned universities and colleges, as well as a vast amount of mid- and large-sized companies.

Susanne Ås Sivborg, the president of PRV, is convinced that the society’s support of innovations has a large impact on the number of filed patent applications. Based on the recent statistics, she states that the strongest fields in terms of patent application activity in Sweden are found in the mechanics, vehicle and engineering industry sectors.

The Swedish industry has, to a large amount, been based on innovations which have been patented, and the adjustable spanner, the ball bearing and the tetrahedron-shaped paper carton are well-known examples of economic success stories. Whether or not coming patent applications will thrive in the more traditional field of mechanics, or in rapidly expanding sectors such as telecommunications, Mrs. Ås Sivborg wishes not only a strong inter-county collaboration for innovation development but also an increased knowledge what an innovation is and how to protect it by a patent application.

Love Koci, European Patent Attorney


Swedish Government forms Innovation Council

According to a recently published article in the Swedish business journal Veckans Affärer, the Swedish Minister for Enterprise and Innovation, Mikael Damberg, has promised the creation of an Innovation Council during the spring of 2015 which is to be headed by the Swedish Prime Minister. Mr. Damberg states that a Council of this kind has been the wish of the Prime Minister for a long time in order to emphasize the importance of innovation and to strengthen the global competitiveness of Swedish companies. The Innovation Council will comprise, apart from the Prime Minister and other selected ministers, people from the industry and academia.

According to Mr. Damberg, one of the key issues of the Council will be the apportionment of government venture capital (GVC) to companies of interest. He believes that there is room for improvement of the current GVC administration, as a large portion of the capital is not distributed at all or distributed at a too late stage. He emphasizes that GVC plays an important role, especially in the early stages of R&D, when private venture capitalists may hesitate whether or not to invest.

In my opinion, the initiative of forming an Innovation Council is highly promising. I believe that the support from the Council may be specifically beneficial for small to medium-sized R&D companies which often need a financial push for their progress, whether this results in investing in new equipment, hiring more staff, releasing new products on the market or establishing intellectual property rights.

It will be appreciated that Sweden is regarded as an extremely innovative country. The renowned, New York-based Bloomberg site for business and financial market news publishes each year a ranking list of the most innovative countries in the world based on factors such as the countries’ R&D intensity, manufacturing capability, productivity, researcher concentration, patent activity, etc. In the annual rankings of 2012-2015, Sweden has finished fifth, fifth, second, and sixth, respectively, thereby passing the examination magna cum laude. Nevertheless, it is of vital importance to ensure that Sweden’s enormous innovation potential results in new products, services and intellectual property rights, not only for the benefit of the companies involved, but also of the country’s economic prosperity. Therefore, I believe that the most important task of the Innovation Council is to create and develop strategies such that it may constitute this momentous bridge between innovative ideas and economic growth.

Love Koci, European Patent Attorney

Swedish supreme court: Trademark infringement is not a crime for which “the nature of the crime” motivates imprisonment

It is rather well-known that a trademark infringement may result in claims for damages. On the other hand, the awareness is probably not as high about the risk for an individual to end up in jail for the very same violation. The extent to which the latter should happen was the question to be decided in the so-called SKF case, a criminal case for which the Swedish Supreme Court recently issued an opinion.

Due to its intrusive nature for a convicted individual, the legislature has emphasized that usage of imprisonment as penalty should generally be avoided in favor for less severe penalties, such as “suspended sentence” and probation. According to the Swedish Penal Code there are three situations that each independently point in the direction of imprisonment:

  1. when the “total penal value” for the crimes committed is found to be one (1) year or higher,
  2. when recidivism is at hand (the accused is re-committing crimes) or
  3. when the “nature of the crime” as such justifies imprisonment.

The first two situations are relatively “hands-on” and easy to evaluate whether applicable or not. The third situation though, the “nature of the crime” (“brottets art” in Swedish), is somewhat ambiguous. Introduced in 1989, along with a general reform of the Swedish penalty system, the concept has been described as a reflection over the fact that certain types of crimes “in themselves” traditionally have been seen as more serious and reprehensible compared to other crimes, rendering imprisonment even in cases when the total penal value falls below one year or when there is no recidivism (the situations 1 and 2 above). Crimes that historically have been included in this group are for example cases of assault, drunk driving and perjury.

In the SKF case, the accused was found guilty of having imported counterfeit bearings from China, reselling them to Swedish customers using the SKF trademark. One customer experienced trouble with the bearings and complained directly to SKF, after which the counterfeit activities were discovered.

Both the District Court and the Court of Appeals found the accused guilty of intentional trademark infringement. However, the courts disagreed on the penalty.

The District Court, siding with the prosecutor, sentenced the accused to one year of imprisonment (after having found that the total penal value for the crime was one year). In this respect, the District Court argued inter alia around the seriousness of the crime, mentioning the severe risks for damages on property and persons that had arisen. Since the total penal value for the crime committed was deemed by the District Court to be one year there was no need to consider recidivism or the “nature of the crime”.

The judgment was appealed by both parties (the prosecutor and the accused) to the Court of Appeals. The Court of Appeals mitigated the penalty, sentencing the accused to a “suspended sentence” in combination with fines. The Court of Appeals stated that the total penal value of the crime was four months, thus remarkably lower compared to what the District Court had ruled. Since the penal value was determined to be less than one year, and the accused had not been sentenced previously, the remaining path for legitimizing imprisonment was to argue for the “nature of the crime” aspect. But this argument was also dismissed by the Court of Appeals. The Court of Appeals stated inter alia that risks for damages on property and persons were outside the scope of the trademark infringement legislation, and could therefore not be taken into account when determining the sentence.

The prosecutor was not satisfied and appealed to the Supreme Court, stating e.g. that counterfeit crime is an increasing problem for society, posing a treat towards economy, public finances and the protection of consumers, why imprisonment for the accused in the case at hand was justified.

The Supreme Court granted the appeal. One of the central questions for the Supreme Court to decide was pretty straightforward: is trademark infringement a crime for which the “nature of the crime” as such motivates imprisonment, even when the total penal value falls under one year and the accused is not a recidivist?

The Supreme Court reply was in-line with the Court of Appeals, namely “no”. The Supreme Court stressed that neither the preparatory works to the Trademark Act nor case law hold that trademark infringement is a crime of such a dignity that there is a reason for any special treatment when it comes to determining the penalty. The Supreme Court continued expressing that the reasons brought forward by the prosecutor in the appeal were not “strong enough”. The Supreme Court estimated the total penal value to eight months, enabling the penalty to come to a halt at “suspended sentence” combined with fines.

The Supreme Court’s verdict is no doubt interesting and can be said to have high precedential value. Firstly, it indicates that trademark infringement indeed is not part of the “nature crime group”. Secondly, concerning the concept of “penal value determination”, it makes it clear that even relatively large-scale trademark infringement hardly motivates significant penal values. One question to be asked though is if the argumentation put forward by the Supreme Court could be used “analogously” in cases concerning other types of IP infringements, such as patents and copyright? Future judicature will have to give the answer.

Anders Sparlund, Associate

You have a right to remain silent

(Or: What do midwives and patent attorneys authorized in Sweden have in common?)

As a citizen in a society, you have an obligation to give evidence if you are called as a witness. There are several sanctions that can be imposed upon those who refuse. However, an exception to the obligation to give evidence applies to Swedish authorized patent attorneys (as far as concerns patent matters) and midwives.

According to 5§ chapter 36 of the Swedish Code of Judicial Procedure, lawyers, doctors, dentists, midwives, nurses, psychologists, psychotherapists, family advisors, and patent attorneys authorized in Sweden are excluded from the requirement to testify regarding subject matter that has been entrusted to them during their exercise of profession, or that has come to their knowledge in relation to their exercise of profession. The court is not even allowed to ask questions regarding these matters.

According to the Patent Authorization Act, patent matters are matters concerning patentability of an invention, patent application and the prosecution of the patent application, the validity of a patent, the scope of a patent or patent application, and oral proceedings and preparations prior to the oral proceedings.

So now you know one of the perks of being, and hiring, a Swedish authorized patent attorney.

Julia Mannesson, European Patent Attorney and Swedish Authorized Patent Attorney

Changed conditions regarding the possibility to register “geographical” trademarks

As you might have heard before, a fundamental requirement for registering a trademark is that the trademark is distinctive, meaning that it must have the ability of distinguishing the goods or services provided from the goods and services of others.

The Swedish Trademark Act holds that a trademark might lack distinctiveness inter alia when it suggests the geographical origin of the goods or services. Accordingly, Swedish case law has historically pretty consistently refused registration for geographical terms, arguing that geographical trademarks could not be inherently distinctive, the rationale being that such expressions, along with other descriptive terms, should be available for each and everyone to use in their business. Some examples of these non-permissive rulings from the Swedish Court of Patent Appeals are ÖRESUNDS KRAFT (case no. 04-085) and ROSLAGSSNAPS (case no. 05-358).

Previously, the way for an applicant to be granted registration for a “geographical” trademark was to argue for acquired distinctiveness, thus that a sufficiently large amount of the relevant market was aware of the trademark and linked it to the goods or services in question. Such examples of cases where the applicant did manage to convince the Court of Patent Appeals are VÄSTERBOTTENOST (case no. 02-100), KOPPARBERGS (case no. 00-505) and KIVIKS (case no. 98-104).

However, as implied by the title of this blog post, the rules of the game have changed.

In December 2011, the Court of Patent Appeals, made a U-turn in NACKA FORUM (case no. 10-292), a “landmark case” where registration was granted for NACKA FORUM, despite the fact that “Nacka” indeed is a geographical location, close to Stockholm.

Then what reasoning did the Court of Patent Appeals apply?

The Court of Patent Appeals based its judgment in NACKA FORUM on a case from the European Court of Justice, WINDSURFING CHIEMSEE (case no. C-108/97 and C-109-97), arguing that trademark registration for a geographical indication should not be denied solely on the basis that the goods or services originate from the geographical location in question. The Court of Patent Appeals continued stating that the need for geographical locations being available for everyone to use in commerce only makes itself reminded in cases where the geographical location is “associated with a certain level of quality or other properties, or when such a connection, based on a particular circumstance, is likely to occur in the future”.

After having made these principle statements, the Court of Patent Appeals rounded off by concluding that Nacka, a fairly generic suburb of the Swedish capital (the author’s remark), was not a geographical location linked with quality or other properties for the goods and services provided, and that such associations were not likely to occur in the future.

After NACKA FORUM, a number of similar judgments from the Court of Patent Appeals have followed, e.g. KARLSTADS STADSNÄT (10-282), DANDERYDS CENTRUM (11-031) and AVESTA WELDING (12-026), all of them permitting registration.

However, a total turnabout from previous case law has not taken place. In some cases, the Court of Patent Appeals has still been reluctant in granting registration. In ØRESUNDSTÅG (10-023) the Board of Appeal denied registration, not on the basis of geographical origin, but on a discussion around the mark “as a whole” not being distinctive, due to the circumstance that the mark merely described the goods and services in question (“tåg”, as in train transportation) and their origin (“Øresund”, a strait located between Sweden and Denmark). MALMÖ AIRPORT (case no. 12-037) is another case where registration was refused by the Court of Patent Appeals, using a similar reasoning.

So what are the effects of NACKA FORUM?

The legal effect of NACKA FORUM is that a trademark consisting of a geographical term can indeed in some cases possess inherent distinctiveness, and thus be possible to register without having to prove acquired distinctiveness. From a right holder’s perspective, this progress can be seen as favourable, since the outlooks for protection of their trademarks are enhanced and cheapened. The other side of the coin though is the question of third party interests; what is the actual “scope of protection” for these geographical trademark registrations? How “close” can you get without having to risk accusations of trademark infringement? For example, will NACKA FORUM have to accept a competitor’s usage of e.g.  NACKA SUPER FORUM? In these situations there are no straight yes or no. How these assessments should be made is ultimately a question for the Courts to decide upon.

Anders Sparlund, Associate

Wider scope of protection for Swedish patents?

Last week the Swedish government referred an amendment of the Swedish patent law to the Council on Legislation for reconsideration. According to the suggested amendment, patent applications filed in English need not be translated into Swedish. Instead, they can be granted in English.

For applicants filing a Swedish patent application in English and wishing to obtain a Swedish patent, this ought to be a major cost saver. However, many of my clients use the Swedish patent system for receiving a quick and not so expensive search and examination and then, after receiving the first Office Action, they abandon the patent application. The patent protection in Sweden is instead obtained by validating a European patent in Sweden. With the new legislation though, there can be benefits in keeping the Swedish application alive.

There will be occasions when the applicant might have to file a translation of the claims, e.g., when publishing the patent application in order to obtain provisional protection and upon receiving an intention to grant. Further, during opposition or litigation, the patentee can be requested to file a translation of the description and the abstract. It is however the claims in English that determine the scope of the patent.

When validating a European patent in Sweden, the scope is instead determined by what is present in both the claims of the European patent and the claims of the Swedish translation. This can be a problem if the translator chooses a narrower wording than the wording in the original application. Hence, one advantage with letting the Swedish patent application become a patent might be a wider scope of protection.

To sum up, the suggested amendment provides both cost savings and supposedly a wider scope of protection. Whether it will lead to an increase in filing rates, we can only guess.

If the amendment is passed, it will become effective 1 July 2014.

Update: The Council on Legislation have now reviewed the amendment and have no objections. The next step is that the Swedish government presents a parliamentary bill to the Riksdag. (25 Nov 2013)

Julia Mannesson, European Patent Attorney 

Link to more information (in Swedish)

Patent Prosecution Highway: New possibilities for Swedish patent applicants

Swedish patent applicants and others using the Swedish Patent- och registreringsverket (PRV) as the office for first filing of patent applications are getting new possibilities for obtaining accelerated prosecution of their following foreign patent applications; the PRV are expanding their participation in the international PPH network with a number of new PPH agreements.

Effective 1 October 2013 the PRV together with the JPO launched their first PPH agreement using national work products.

Furthermore, the PRV and the Korean IP Office (KIPO) have signed pilot PPH agreements using both national and PCT work products. These pilot agrements will, according to the PRV website, take effect on 1 January 2014.

Finally, the PRV also plans on signing a pilot PPH agreement using national work products with the USPTO. This pilot agreement is, again according to the PRV website, planned to enter into force on 1 January 2014.

Hence, so far it is now, or will within short be, possible to request accelerated prosecution of a Japanese, Korean or US patent application claiming priority of a Swedish patent application based on the examination results of the PRV. Furthermore, it is not unlikely that more PPH agreements will follow – and in any event the Awapatent IP Blog will follow the developments. 

Troels Peter Rørdam, European Patent Attorney & Certified Danish Patent Agent

Link to the PPH site of the PRV

Getting Personal in Sweden: Liability of Directors, Officers, and Owners for their Company’s IP Infringement

1. Introduction
Picture a scenario where a plaintiff in an IP infringement case in Sweden has received a well earned final ruling in its favor, or perhaps gotten a preliminary injunction issued against an accused infringer.

As the plaintiff is celebrating its success, it receives news that the infringer recently emptied its warehouses of infringing goods at dumping prices, filed for bankruptcy, or went into administration. The on-going infringing business, apart from the shares in the defendant company, has been sold to a third party. The plaintiff is left with not only the losses due to the infringement, but also the costs for the litigation.

Curtain falls and the show is over, or is it not? What actions are available now, and what could have been done to prevent this bleak outcome?

 2. Follow the money – pursue a claim for personal liability
Among the actions available to avoid the unlucky scenario, there is one that stands out from the crowd. This is to pursue the officers, directors or owners involved in the infringing business with claims for personal liability (to pay damages for the infringement). 

In direct contrast to the prevailing misconception that there is practically never any personal liability, Swedish law provides a forceful set of legal tools for a plaintiff to avoid much of the above-mentioned problems with an elusive defendant in IP cases. These tools will be outlined in the next section of this article.

3. Swedish law does give a basis for personal liability
Swedish case law provides a clear precedent that injunctions can be issued against representatives of a company on the same grounds as against the company to avoid possible defiance.

Although a director is not typically personally responsible for the company’s acts and undertakings, personal liability for IP infringement can be established under certain circumstances. 

The basic rule in Sweden is that officers, directors and (active) owners, or board members, of a company who have taken part in, or have furthered, or have failed to prevent an IP infringement can be held directly personally responsible for their company’s IP infringement. 

Personal liability for IP infringement in Sweden can be established on mainly two different grounds, either by the so-called piercing the corporate veil doctrine, or by direct personal liability. These two counts will be discussed in turn below.

3.1 Piercing the corporate veil
The conditions for piercing the corporate veil are not clearly specified under Swedish law. However, from existing case law the following conditions can be listed as important: undercapitalization, lack of independence, undue organization or influence over the business by the owner (“Alter Ego”), and conduct directed against and disloyal to the creditors or other parties who have suffered a loss.

One of the problems with the piercing the corporate veil theory is that undercapitalization does not have any legal, commercial, or even fiscal definition in Sweden. And what is more: undercapitalization is not as such prohibited under Swedish law.

3.2 Direct personal liability
The basic rule of direct personal liability is more straightforward. It applies if a company has infringed someone else’s IP and a director, owner or board member has participated in the decisions or activities leading to the infringement, supposing also at least negligence on part of the director, owner or board member.

The Swedish Supreme Court ruling in NJA 1986 s 702 (“Demonstration music”) together with successive rulings has cemented the principle that a leading representative, such as a CEO, of a limited liability company can be liable to pay damages because of negligent corporate copyright infringement. Intent or gross negligence are not necessary prerequisites.

The duty to investigate whether a product can be protected by IP rights is extensive in Sweden, and to stay uninformed about possibly existing IP rights is normally deemed sufficient to establish negligence in itself.

Nevertheless, even though negligence can be thought to come almost free of charge, most judges in Sweden would not perhaps readily hold that the burden of proof rests solely upon the defendant (to exculpate himself), i.e. the plaintiff makes best by tainting the defendant by dressing him up in culpa.

3.3 Swedish law on personal liability for IP infringement – brief conclusion
The discussion above shows that there are still some pitfalls and surprises left when it comes to personal liability for a company’s IP infringement in Sweden.

For one thing, and as surprising as it may be, personal liability for a company’s IP infringement has not been put to the test by the Swedish Supreme Court in a patent, trademark or design case.

It is also uncertain what it would take for a finding of negligence in cases where the infringing goods only fall within the mere formal scope of protection of, say, a trademark or design right, and where it is clear that blatant copying has not taken place.

However, having said that, the basic rule under Swedish law is still clear. The directors, officers and owners, or board members, of a company who did not do what they should have done can indeed be personally liable to pay damages for their company’s IP infringement.

4. Conclusion: How to deal with an evasive infringer
The situation under Swedish law makes it clear how an IP owner plaintiff should deal with an evasive infringer.

The best way to pursue a claim in such a case is obvious – make thorough preparations and go after everyone already from the start.

There may be challenges along the way, but aggressive action probably gives the best chance for success at the least risk and for a reasonable premium (i.e. initially higher litigation costs, but with the prospects of recovery if the case is won).

It should also be clear that a well founded claim for personal liability is the perfect platform for a good amicable settlement. Clearly, the bravado and confidence in defending an infringement case is usually much higher when the personal belongings and private welfare is not at stake.

Robin Berzelius, Attorney at Law

The global IPR transactions market

The global IPR transactions market


Recent comments in Swedish business press point at the lack of a functioning marketplace for IPR and the need for governmental and industrial intervention in the process of commercialization of innovations and intellectual property. However, I feel there is a clear need to increase the general understanding of how a ”capital market” functions and the fundamental demands that must be met for a market to exist and fulfill both buyers and sellers and therefore serve its purpose.

IPR are no uniform “goods” on a traditional “market”
A ”market” arises first when both a buyer and a seller exist for a ”good” which can be defined in a clear and exact manner. Beyond that, the ”good” must be transferable and the right of ownership must be able to established and recorded. The price for the ”good” must be decided by joint agreement between buyer and seller and both parties based on their own perceived value of the “good”.

A fundamental demand for a functioning market is that the ”good” is clearly defined and that units of the ”good” are as uniform as possible. A class B share of Volvo is the same as all other B shares in Volvo. A barrel of crude oil contains the same amount of oil in Chicago or London or Amsterdam. In addition, a well functioning market shall have a good measure of transparency and frequency of transaction/turnover in order to allow all parties to realize a gain or reverse a position if they desire to do so. Under such conditions both the seller and the buyer can be confident in what they are trading and the ”good” is easy to set a price for since there is transparency and one can observe similar transactions.

Intellectual assets (IPR = granted patents, trademarks, designs and even domain names) are by their very nature not uniform. They do not function well as a ”good” used for quick deals on a traditional market. To call after help and strong measures from Swedish politicians and industrial owners to establish a ”marketplace” for IPR is naive and can easily lead to confusion and mistaken counterproductive initiatives.

Nortel’s patents sold in a box
If we focus on granted patents as a subject for this discussion, it is clear that they have different strengths depending on, among other things, their age, how often they are cited by other patents, their area of technical innovation, how well they cover a method or a product and if they generated a revenue flow through a license. In other words, all IPR are not of the same quality. They fail the test for uniformity or fungibility. It is not correct that all of Nortel’s patents were equally good or that the price per patent sold was 2.4 MSEK. On the contrary, a few nuggets of gold were blended with many patents of lower caliber. But all were sold in a box to the party that bid highest at the auction. In that case it was the consortium led by Apple that bid higher than Google and several other companies. Now that the Nortel portfolio has been sold, the majority of the patents will most likely not come out on the public market again for strategic reasons. The consortium is now more or less married to their purchase. Here the process fails the test of frequency of transactions and pricing transparency.

The history of an IPR transactions market
A bit of background on the IPR transactions market can be instructional. Patents have traded hands since the beginning of patents themselves; often secretively and without a trace in the public view. This was very inefficient as a market and served both buyers and sellers badly. Patent auctions for high quality assets were created to improve market functions and have existed for several years with Ocean Tomo’s Live Auctions as the guiding star in the market until the finance crash of 2009, when a lack of liquidity undermined the market and the auction team was disbanded and sold to a ”money and commodities broker” in London.

For several years there have been initiatives to start an IPR market with the intent of listing all granted patents on a ”marketplace” (preferably web-based) and let interested buyers find and bid on chosen patents. Several web-marketplaces exist with enormous lists of IPR that is for sale. Conceptually this may be attractive but in practice it has not worked out. The reason is simple. Professional buyers of IPR (industrial users and financial investors) have certain demands for information concerning the legal aspects of IPR. For instance, who is the actual owner of the patent and if there is a clear ”chain of title” without any unfulfilled covenants or missing payments. Since many companies may not want to reveal, for strategic reasons, who they have licensed a technology to or from, it is often difficult to verify license revenue flows from a patent. That makes it difficult to use the DCF method (Discounted Cash Flow) to estimate an IPR ’s value. Buyers don’t have the time to waste searching for this type of information. Such markets fail to meet the needs of both buyers and sellers and have not been successful.

Fulfilling the price transparency requirement for a functioning market as it is traditionally meant, places to high a demand on IPR as a tradable ”good” that is neither uniform nor fungible. Not to mention that correct information about possible patent infringement from products is enormously important for price development and value perceptions. It is not easy to establish these ”facts”, and they are often not clear until after a legal process and judgment, which can itself take several years and cost a fortune. It costs time and money to analyze an IPR portfolio. The ”due diligence” processes that Nortel’s and Motorola’s portfolios went through took months to complete. It takes a long time to analyze if a patent matches a potential buyer’s business, product and legal strategies. Thereafter, the management must also request and allocate funding from the corporate budget. So, in a traditional sense the market for IPR cannot be compared to other markets like those for commodities or commercial property. Trying to create a market for IPR or “innovation” by political force will only lead to a dysfunctional market that is ignored and will be perceived as a destructive invasion of the state into the private sector.

IPR are part of the international stock markets …
In fact a liquid market for IPR assets exists already today. That is shown clearly by the few deals that have been seen in the media recently. The ”IPR market” is actually part of the well-established international stock markets where one can buy and sell shares in companies like Motorola, Nortel and Interdigital. It is today an accepted fact that during the last three decades a shift in the relative weights of assets on balance sheets has occurred in the majority of technology driven companies. From a weighting of 20 % IPR–80 % hard assets before the 1980’s it is now common with an 80 % IPR – 20 % hard assets weighting. (Source: Ned Davis Research among others).

If you want to buy an attractive IPR portfolio held by a competitor today, you can put a bid on the entire company where these IPR assets are found undervalued and then ”strip the assets”. That is precisely what the Motorola deal was about, and it is not unusual today that corporate raiders and M&A deals are based on IPR. To yearn for political initiatives to create markets and tax breaks to promote IPR based deals to promote innovation can easily lead to a ”Pandora’s Box” experience and twist markets with very unexpected results.

… and the IP Broker market
Today there is also a well functioning ”IP Broker” market that takes care of many IPR portfolios continuously. These portfolios can be made up of one or several hundred IPR, but they must go through the same process steps that the Motorola deal did, even if they do not have the same dignity or size.

Low prices for patent applications
The market that does not function well today is the market for patent applications. It is unfortunately true that a patent application is just that – an application. It has no legal standing and can not be enforced until it reaches granted status. For any number of reasons they can be shot down by the relevant patent office or remain bound up in long challenge actions initiated by competitors. Selling a patent application is merely transferring the financial risk of the application process from the seller to the buyer. Few buyers are willing to pay much for high-risk assets that also require payments to maintain them until they are granted. Therefore, prices are usually very low for applications. Other paths for monetization are necessary to help or clients with applications.

Licensing portfolios and new industries
Even if I agree that there is a need in Sweden for politicians, industry, universities and even the law to promote research, innovation and patenting in order to secure the nation’s future welfare and growth, there is no direct link between the number of patent applications and their quality or likelihood of reaching granted patent status. It is only truly good innovation and discoveries that lead to strong patents which lead to strong revenues and high values. And we don’t necessarily need to sell our ”precious metals” for short-term financial gains. A concerted strategy for building licensing portfolios and new industries is what is important – the market can and will take care of itself.

Matt Miskimin, Intellectual Asset Manager

When will the Marketing Director and the Board start evaluating trademarks in actual money?

When will the Marketing Director and the Board start evaluating trademarks in actual money?

Hopefully very soon, since the two main obstacles have been erased.

The previous lack of standards for valuation methods is now history by introduction of the new ISO 10668 Monetary Brand Valuation.

An uncertainty amongst management and Board Directors on how to assess trademark valuations due to lack of experience will be viped away by the national adaption of the international IFRS rules on accounting and in Sweden also by introduction of new national rules from FAR, the Swedish Accountants Association. From 2012 all Swedish companies, except the smallest ones, are obliged to value at least all aquired IP being part of the goodwill. This will undoubtably increase the understanding of trademark valuation.

By measuring market activities and aquired trademark positions in actual money, marketing in Swedish companies will be enhanced and actively adding value to the company.

Since I have argued for putting the trademark value on the balance sheet for the last 20 years, I sincerely hope that a financial evaluation of trademarks now finally will be adopted by all companies that are proud of their trademarks.

Stefan Hjelmqwist, Attorney at Law, Awapatent