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Aon Intellectual Property Assets Briefing - May 13, 2021

Thoughts from the Aon Team

This week, as you will see in the coverage section below, the U.S. Patent Office issued its 11 millionth patent – less than three years after it issued its 10 millionth – representing the shortest amount of time in the history of the U.S. Patent Office to issue one million patents. This acceleration in patent grants is even more impressive when contrasted to the fact that it took 121 years to issue its first 1 millionth patents (from 1790 to 1911).  Without a doubt, we are truly witnessing the impact of an innovation-driven economy.

This continued acceleration of patent issuances demonstrates the increased importance of intellectual property as businesses rely more heavily on innovation. Today, IP is one of the most valuable assets a company owns, regardless of the company’s size, stage, or industry. 

As these assets become more valuable, they are also subject to increased risk. Risks of losing IP and risks of infringing others’ IP have never been higher. In a tangible-dominant world, the risks of someone stealing a machine from a factory or having the factory burn down were troubling, but manageable, events.  However, in an intangible-dominant world, the risk of someone stealing your trade secret or being found to infringe another’s IP rights can be catastrophic business-ending events.  

One of the trends that we have seen in recessionary periods is the increase in IP litigation for both trade secret theft and IP infringement. The theses behind this are manifold and situational, but typically include a desire to maintain a competitive advantage and a way to monetize and generate revenue from investments in R&D. Monetization efforts are magnified during periods of a struggling economy. This was certainly the case after the economy began recovering from the 2008 recession. More recently, since the middle of 2020, we’ve been seeing an increase in IP litigation as the economy has continued to recover from the global shutdowns related to COVID-19. 

Another factor that is driving IP litigation is the trend for companies to enhance their technological capabilities and as a result are increasing their investments in software and IT. This has the unintentional consequences of increasing exposure in two of the most litigious areas of intellectual property, especially when enlisting vendors to help with enhancing these capabilities.   

With both IP litigation and the digitization of businesses on the rise, it’s more important than ever for companies to understand, value, and protect their intellectual property assets. We recently spoke with Business Insider about this trend and how companies must develop IP-based enterprise value creation strategies that integrate with their business plans and implement risk mitigation strategies to protect their IP investments. If done properly, IP assets can be leveraged in financing growth capital.  

As always, thank you for reading and if you have any questions or comments please let us know. 

Lewis Lee, CEO, Aon IP


Aon In the News

  • Business Insider highlighted Aon for its intellectual property protection offerings as businesses increasingly recognize the importance of intellectual property assets. The article emphasized the value of intangible assets, which account for 90% of the S&P 500's market value today compared to 17% in 1975.
  • London Daily included Aon in a list of big insurance companies that are dealing with a “growing number” of art clients who are developing into a new blockchain-based technology called “non-fungible tokens,” or NFTs, which provide digital certificates of authenticity for creative works.
  • Aon released a report analyzing "Grey Swan" reputation crises and their effects on shareholder value, emphasizing that such events require "focused attention and investment" in prevention and response while presenting learning opportunities for companies.
  • Liz Henderson, Aon's senior managing director of analytics, was featured in an article from Risk & Insurance underscoring the increased demand for insurance products regarding climate change and extreme weather events.
  • Aon announced its earnings for Q1, showing a 10% increase in total revenue and a 6% organic growth in revenue. Aon noted their insurance offerings have been focused on addressing risks associated with the COVID-19 pandemic, climate change, and supply-chain disruption.
  • Aon entered into an industry collaboration to provide supply-chain protection for COVID-19 vaccines and committed to donating all revenue gained from the venture to a charity focused on mitigating the "human and economic toll of the pandemic."
  • Deanna Emery, a lead data scientist at Aon, was featured in an article from Builtin advising readers on ideal strategies when pursuing opportunities for advancement. Deanna's story was used to illustrate the utility of not being afraid to step outside of one's comfort zone when seeking new opportunities.
  • An announcement on Tuesday detailed remedies taken by Aon and Willis Towers Watson to meet requirements set forth by the E.U. for the companies' pending combination.


Executive Insights

  • The Supreme Court sided with Google in an $8 billion landmark dispute over what types of computer code are protected under American copyright law. The court ruled that Google did not commit copyright infringement when it used Oracle Corp.’s programming code in the Android operating system, describing the copying as “fair use.” Google had contended that the 11,500 lines of code from Oracle’s Java platform that it used were purely functional aspects of coding that remain necessary for technical progress. Microsoft and other major tech companies sided with Google, arguing fair use of computer programs would promote innovation and interoperability. Oracle received backing from the movie and recording industries in favor of expansive copyright protections to protect their profits from books, articles, movies and more.
  • A jury in Arkansas federal court ordered Walmart to pay $115 million to ag-tech company Zest Labs for stealing a trade secret related to technology for reducing fresh food waste. The jury awarded Zest $60 million for trade secret misappropriation and an additional $50 million because the misappropriation was “willful and malicious,” moving Zest’s CEO to say that the verdict “underscores the strength” of the company's intellectual property.
  • President Joe Biden's administration announced its support for temporarily waiving patent protections for COVID-19 vaccines, arguing that the global health crisis caused by the pandemic necessitated the move. Critics noted that despite the policy's popularity, intellectual property rights have not stood in the way of increasing global vaccination rates. The German government argued that removing patent protections could harm future pharmaceutical innovation and that production capacity and quality standards have stood in the way of global vaccination efforts more so than patents. Shares of Pfizer and Moderna dropped significantly after the European Union signaled openness to discussing waiving intellectual property rights after the U.S.'s announcement.
  • Electric aircraft startup Wisk Aero has sued another start-up, Archer Aviation, over claims that the company stole trade secrets and infringed on Wisk’s patents. Wisk contends that the company’s former engineers stole intellectual property that was later promoted by Archer as part of its merger. The lawsuit underscores what has become a “frenzied” market for electric vehicles and planes in recent months, often enticing investors who hope to acquire businesses that follow the same trajectory as Tesla’s on the stock market. 
  • Sales of nonfungible tokens, or NFTs, swelled to more than $2 billion in the first quarter, marking the emergence of a new way to ensure ownership and authenticity in the digital sphere, especially for digital art. One blockchain startup hopes to use NFTs as the foundation of a platform that would allow artists to autosave for their intellectual property during the creative process, a capability that would expedite rights disputes with clearly time-stamped creations. 
    • While NFTs were intended to protect artists against others using their work without permission, some critics say the protection is not secure enough. Additionally, as NFT projects gain more financial revenue, large companies such as Marvel and DC Comics have sent notices to artists forbidding the use of their intellectual property. Observers have noted that owners of NFTs also may not be able to display the pieces since copyright owners ultimately "retain exclusive rights."
  • The expiration of a patent office challenge process has yielded a slew of new lawsuits against banks and e-commerce companies over financial services patents, according to new Bloomberg Law data. The data shows a nearly threefold increase in patent suits against financial institutions such as JPMorgan, Chase and Bank of America since August 2020 compared to eight months prior, an increase that experts say is related to the fact that companies accused of infringing on financial services patents used to have a quick and cheap way to challenge their validity rather than through federal district court.
  • Intellectual property is taking on an increasingly important role in the cannabis industry, especially in instances of acquisitions. Experts compare cannabis IP to the pharmaceuticals, food, and beverage industries, hinging on the expectation that IP protection will enhance company value for both competition and valuation.


News of Interest

  • Eleven Million Patents: Milestones in the History of Invention - IPWatchdog - 5/11/2021
    • Outbound Virality: Facebook: 0 Interactions; Twitter: 11 Tweets
    • The United States Patent and Trademark Office (USPTO) issued its 11 millionth patent today, May 11, 2021. America’s first (unnumbered) patent was issued in July of 1790, and patents were numbered consecutively starting in 1836. [...] Patents offer a historical record, not just of major technology turning points, but also of the kinds of incremental innovations that underpin economic growth.
  • How Will the $2.18 Billion Verdict in VLSI Technologies v. Intel Impact Future Patent Valuations? - - 4/22/2021
    • Outbound Virality: Facebook: 5 Interactions; Twitter: 14 Tweets
    • “The verdict will likely embolden other patentees/plaintiffs to seek similarly large damages award in patent lawsuits…. Indeed, VLSI itself sought an additional $3.1 billion in damages from Intel in a second jury trial, although in that case the jury ultimately sided with Intel. Commentators, however, generally agree that the large VLSI verdict is unlikely to survive challenge on appeal.”
  • Peloton’s ‘Revolutionary’ Technology Faces Test in Patent Wars - Bloomberg - 4/16/2021
    • Outbound Virality: Facebook: 0 Interactions; Twitter: 0 Tweets
    • This kind of litigation is common in rapidly evolving industries with several players jostling for dominance. But legal experts say Peloton’s offensive puts its own patents in jeopardy once they are scrutinized in court — despite the company’s claim to be a pioneer of “revolutionary” technology. If these patents are declared invalid by early next year, when the battles are expected to play out, Peloton will lose legal protection for innovations it has called “core” to its fusion of exercise equipment with interactive live and recorded workouts.
  • ‘Fingerprint’ for 3D printer could help protect intellectual property - Engineering & Technology - 4/22/2021
    • Outbound Virality: Facebook: 2 Interactions; Twitter: 6 Tweets
    • Researchers in the US have developed a method to track the origin of 3D-printed items by identifying machines by their unique ‘hot end’, reducing the risk of 3D-printer users tampering with national security and intellectual property.
  • Waiver of patent rights on Covid vaccines may be mostly symbolic, for now - STAT - 5/6/2021
    • Outbound Virality: Facebook: 158 Interactions; Twitter: 510 Tweets
    • Prashant Yadav, a supply chain expert and senior fellow at the Center for Global Development, said the biggest barrier to increasing the global vaccine supply is a lack of raw materials and facilities that manufacture the billions of doses the world needs. Temporarily suspending some intellectual property, as the U.S. proposes to do, would have little effect on those problems, he said.
  • Ericsson Reaches Patent Settlement With Samsung - SDxCentral - 5/7/2021
    • Outbound Virality: Facebook: 0 Interactions; Twitter: 0 Tweets
    • Ericsson and Samsung today reached an agreement to end a legal dispute on global patent licenses related to cellular technologies. The multi-year agreement was reached just five months after Ericsson slapped Samsung with a patent lawsuit wherein it accused the South Korea-based company of violating contractual commitments to negotiate on license patents on “fair, reasonable, and non-discriminatory (FRAND) terms and conditions.” 
  • China pledges greater protection for hi-tech intellectual property - South China Morning Post - 4/25/2021
    • Outbound Virality: Facebook: 671 Interactions; Twitter: 57 Tweets
    • Now the world’s second-largest economy, China for many years relied on copying foreign innovations as it played economic and technological catch-up. But in 2008 it made IPR protection a national strategy and has since made rapid progress.


Social Contribution

  • António Guterres @antonioguterres 6 May I welcome the US Government’s unprecedented support for the waiver of intellectual property protections regarding #COVID19 vaccines, announced yesterday. We are all agreed: none of us will be safe from the virus until all of us are safe. Retweets: 592 Likes: 1.9K
  • David Harsanyi @davidharsanyi 5 May Waiving intellectual property rights is flat-out state-sponsored theft. Retweets: 160 Likes: 654
  • United Nations @UN 25 Apr Intellectual property rights play a key role in helping small and medium-sized enterprises build stronger, more competitive businesses. @WIPO explains how on Monday's #WorldIPDay: Retweets: 121 Likes: 339
  • James Love @jamie_love 26 Apr Given the interest in mRNA patents, this is the number of USPTO granted patents, by year, that mention mRNA in the patent claims or specification. Retweets: 15 Likes: 39
  • Axios @axios 27 Apr Phones and streaming platforms have turned music rights into something like a digital annuity that more investors have become interested in buying. Retweets: 10 Likes: 9

Aon’s Intellectual Property Solutions team helps clients identify, protect, and maximize value from their most valuable assets in today’s business world, their intellectual property. Aon brings the best minds and strong analytical tools to provide a comprehensive approach to intellectual property strategy, valuation and risk management across a client’s business -- aligning current and future intellectual property assets with a businesses’ overarching strategy.

For more information about Aon’s Intellectual Property Solutions, please contact  

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