In recent years significant capital has been invested in patent speculation and for the last two years, Congress has been discussing patent reform.
Hedge funds in need of generating quick returns in this challenging market are seeking investments in patent trolls, aka non-practicing entities (NPEs). ScienceProgress.org reports that hundreds of NPEs have been formed, thousands of patent suits have been filed, and more than $5 billion has been invested in patent acquisitions by NPEs since 2003.
At the same time, corporate entities have built large patent portfolios. This feeds patent aggression for corporate entities whose business models are hostile to true innovation. The resulting patent arms race is fueled by the existence of poor quality patents that are overly broad in claim scope, not new, and not non-obvious. This is partially due to the fact that insufficient prior art was identified to enable rejection of poor quality patents by the USPTO. Any changes made to the current laws are likely to be suboptimal without participation from the open source community in reforming the patent system.
Keith Bergelt, CEO of OIN, a company formed by IBM, NEC, Novell, Philips, Red Hat and Sony to protect Linux, will share his insights into the build-up and ramifications of the patent arms race for the open source community. He will discuss common legal pitfalls in this environment and provide open source companies and developers with tools and strategies that they can use to avoid these pitfalls.
Keith Bergelt is the chief executive officer of Open Invention Network (OIN), the collaborative enterprise that enables innovation in open source and an increasingly vibrant ecosystem around Linux. In this capacity he is directly responsible for enabling, influencing and defending the integrity of the Linux ecosystem. Central to the achievement of his goals is the acquisition and transfer of patent rights designed to permit members of the Linux ecosystem to operate free of the threat of assertion and litigation from those whose business models are antithetical to innovation and global economic growth in information technology and computing.
Prior to joining the Open Invention Network, Mr. Bergelt served as president and CEO of two Hedge Funds – Paradox Capital and IPI – formed to unlock the considerable asset value of patents, trademarks and copyrights in middle market companies. Paradox and IPI were the first Funds of their kind to offer specialty lending products supported exclusively by intellectual property. Driven by Mr. Bergelt’s creativity and entrepreneurial approach, these funds enabled the emergence of patents, trademarks and copyrights as a viable source of collateral in asset-based loans, forever reshaping the emerging IP Finance landscape.
During Mr. Bergelt’s stewardship of these IP-based lending activities, he raised more than $300 million dollars and financed portfolio companies of private equity firms including Texas Pacific Group, Kelso & Co., JH Whitney, Weston Presidio, Goode Partners, Palladium Capital and Castanea Partners, among others.
Previously, Mr. Bergelt served as a senior advisor to the technology investment division at Texas Pacific Group. He also headed business development, intellectual property and licensing for the Kelso & Company portfolio company Cambridge Display Technology in the United Kingdom. Additionally, he established and served as General Manager of the Strategic Intellectual Asset Management business unit at Motorola Corporation and served as Motorola’s director of Technology Strategy.
Mr. Bergelt was a co-founder of the Intellectual Property Advisory Practice within the Electronics and Telecommunications Industry group at SRI Consulting in Menlo Park, California.
Prior to his extensive private sector experience, Mr. Bergelt served for twelve years as a diplomat with postings at the United Nations in NY and the American Embassy in Tokyo, Japan where he was involved in the negotiation of IP rights protection in Asia.
Mr. Bergelt holds an Artium Baccalaureus degree from Duke University, a Jurist Doctorate degree from Southern Methodist University School of Law and a Masters of Business Administration degree from Theseus Institute in France. He is a frequent speaker on corporate strategy, finance and intellectual property management.
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