Patent portfolios as securities

Duke Law Journal

Volumn 63, Issue 1, 2013, Pages 89-154

  Risch, Michael ^a  

^a VILLANOVA UNIVERSITY   (United States)

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EID: 84885931021     PISSN: 00127086     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (207)

1. [14] WILLIAM MEADE FLETCHER, FLETCHER CYCLOPEDIA OF THE LAW OF CORPORATIONS § 6833 (rev. vol. 2012).
2. Edmund W. Kitch, Elementary and Persistent Errors in the Economic Analysis of Intellectual Property, 53 VAND. L. REV. 1727, 1740 (2000) ("It is clear that the ability of the owners of intellectual property rights to transfer these rights in whole or in part to others is an important feature of the systems. The rights can easily arise in the hands of persons or firms who are not in the best position to exploit them. In order to involve others in the full exploitation of the economic potential of the right, the owners must be able to enter into a wide range of arrangements with other firms.")
3. Aleksandar Nikolic, Securitization of Patents and Its Continued Viability in Light of the Current Economic Conditions, 19 ALB. L.J. SCI. & TECH. 393,409 (2009) ("Another factor that could lead to increased patent securitization is the creation of regulated markets for intellectual property, providing information and access to trading.").
4. Naomi Lamoreaux and Kenneth Sokoloff, Long-Term Change in the Organization of Inventive Activity, 93 PROC. NAT'L ACAD. SCI. 12, 686 (1996) (describing the growth of patent markets in the nineteenth century)
5. Mark A. Lemley & Nathan Myhrvold, How To Make a Patent Market, 36 HOFSTRA L. REV. 257 (2007) (discussing the importance of information about patent prices to the creation of a well-functioning market).
6. Gideon Parchomovsky & R. Polk Wagner, Patent Portfolios, 154 U. PA. L. REV. 1 (2005) (outlining a theory of patent value in which the worth of a patent portfolio is greater than the sum of its individual parts).
7. Indeed, accounting rules do not allow employee-invented patents to be booked as assets because there is no purchase price associated with them. Malcolm T. Meeks & Charles A. Eldering, Patent Valuation: Aren't We Forgetting Something? Making the Case for ClaimsAnalysis in Patent Valuation by Proposing a Patent Valuation Method and a Patent-Specific Discount Rate Using the CAPM, 9 NW. J. TECH. & INTELL. PROP. 194, 195 (2010)
8. cf. Zvi Griliches, Bronwyn H. Hall & Ariel Pakes, R&D, Patents, and Market Value Revisited: Is There a Second (Technological Opportunity) Factor? 26 (Nat'l Bureau of Econ. Research, Working Paper No. 2624, 1988) (finding a $3.2 million standard deviation in patent value).
9. See John F. Duffy, Rules and Standards on the Forefront of Patentability, 51 WM. & MARY L. REV. 609, 611-13 (2009) (discussing the comparative merits of rules that apply generally to standards that are applied to individual patents)
10. Kelly Casey Mullally, Legal (Un)certainty, Legal Process, and Patent Law, 43 LOY. L.A. L. REV. 1109, 1125-34 (2010) (describing pressure for rules from the U.S. Patent and Trade Office and pressure for standards from the Supreme Court)
11. John R. Thomas, Formalism at the Federal Circuit, 52 AM. U. L. REV. 771, 799-800 (2003) (arguing that standards applied to each patent are better for patent policy than formal rules).
12. See F. Russell Denton & Paul J. Heald, Random Walks, Non-Cooperative Games, and the Complex Mathematics of Patent Pricing, 55 RUTGERS L. REV. 1175, 1177 (2003) ("Unfortunately, patent pricing presents a difficulty not present in most stock option deals because merely inquiring about acquiring a license will affect its price."). Like Schrödinger's cat, a patent is both worthless and priceless until investigated.
13. Michael S. Kramer, Valuation and Assessment of Patents and Patent Portfolios Through Analytical Techniques, 6 J. MARSHALL REV. INTELL. PROP. L. 463, 465 (2007) ("In light of the prerequisites to achieve patent protection, the value of a patent, by definition, must be unique.").
14. Cf. Jiaqing "Jack" Lu, Decompose and Adjust Patent Sales Prices for Patent Portfolio Valuation, LICENSING ECON. REV., Mar. 2013, at 71, 75 (finding that portfolio value grows nonlinearly with portfolio size), available at http://www.lesk.org/include/downfile.asp?folder=board&filename=11_LU5Edit.pdf.
15. To be sure, nonpublic markets are less liquid and efficient, but even illiquid transactions with multiple parties will apply the same price to all buyers, and that price is often used for later negotiations
16. Presumably, of course, one could short sell a patent with the hopes of obtaining it later. Because patents are unique and illiquid, however, such short sales would be extremely risky.
17. Here, too, there are many types of securities (maybe even most) that are also shallow and illiquid
18. RPX Corp., Investor Presentation 8 (June 2013), available at http://files. shareholder.com/downloads/ABEA-5XYKB4/0x0x523306/4CC42999-6166-4C95-8192-9CE54759BE8D/RPXQ3Invest_Web.pdf (describing the risks of litigation as they affect the valuation of patent portfolios).
19. Colleen Chien, Startups and Patent Trolls 14-15 (Santa Clara Univ. Legal Studies Research Paper No. 09-12, 2012), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_ id=2146251 (describing the harms associated with assertion of patents against small companies).
20. Oskar Liivak, Establishing an Island of Patent Sanity, 78 BROOKLYN L. REV. (forthcoming 2013) (manuscript at 4-7) (describing the benefits of a market for invention), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2205996.
21. Commentators dispute what constitutes an NPE. See, e.g., Mark A. Lemley, Are Universities Patent Trolls?, 18 FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 611, 630 (2008)
22. Michael Risch, What is a Patent Troll?, PRAWFSBLAWG (Apr. 15, 2011), http://prawfsblawg.blogs.com/prawfsblawg/2011/04/what-is-a-patent-troll.html.
23. James Bessen & Michael J. Meurer, The Direct Costs of NPE Disputes, 99 CORNELL L. REV. (forthcoming 2014) (manuscript at 21-22), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2091210 ("Effectively, what defendants pay in costs as a result of NPE litigation reduces their own R&D budgets. This is because companies become targets for litigation mainly when they introduce innovative products. Hence R&D managers must anticipate NPE costs as part of the cost of innovating."). Of course, this statement takes no account of the huge profits these companies earn and refuse to spend on R&D or even return to shareholders.
24. JeffMacke, Einhorn Sues Apple! Will His Battle Save the Stock? YAHOO! FIN. BREAKOUT (Feb. 7, 2013), http://finance.yahoo.com/blogs/breakout/einhorn-sues-apple-battlesave-stock-160610124.html.
25. Public Comment from Barry Leff, IPNav, to Fed. Trade Comm'n Patent Assertion Entity Activities Workshop (Dec. 10, 2012), available at http://www.ftc.gov/os/comments/pae/pae-0010.pdf ("When such an operating company seeks sales injunctions against competitors, it is because they want to increase their market share. When a PAE asserts a patent, it's not looking to stifle competition: it's looking to get paid for its intellectual property."). In rare cases when the patent is exclusively licensed, the exclusive licensee might enforce the patent and require an injunction.
26. Mark A. Lemley & A. Douglas Melamed, Missing the Forest for the Trolls, 113 COLUM. L. REV., (forthcoming 2013) (manuscript at 46-47), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2269087 (discussing litigation and settlement differences among NPEs and competitors).
27. Charles Duhigg & Steve Lohr, The Patent, Used as a Sword, N.Y. TIMES, Oct. 8, 2012, at A1 (noting that "as patent portfolios have expanded, so have pressures to use them against competitors")
28. Richard Stallman, Let's Limit the Effect of Software Patents, Since We Can't Eliminate Them, WIRED (Nov. 1, 2012, 6:30 AM), http://www.wired.com/opinion/2012/11/richard-stallman-software-patents (arguing that Apple may be the most dangerous patent holder).
29. Peter Lee, Patents and the University, 63 DUKE L.J. 1, 36-49 (2013) (documenting a shift from "academic exceptionalism" to universities' embrace of patenting).
30. DIANA HICKS, CHI RESEARCH, INC., SMALL SERIAL INNOVATORS: THE SMALL FIRM CONTRIBUTION TO TECHNICAL CHANGE 11 (2003), available at http://archive.sba.gov/advo/research/rs225tot.pdf (finding that small firms generate a disproportionate number of important patents as measured by citations)
31. John R. Allison & Mark A. Lemley, Who's Patenting What? An Empirical Exploration of Patent Prosecution, 53 VAND. L. REV. 2099, 2128 (2000) (reporting that 70 percent of patents are sought by large firms compared with 11 percent by small firms).
32. Sarah Frier, IBM Granted Most U.S. Patents for 20th Straight Year, BLOOMBERG (Jan. 10, 2013, 9:05 AM), http://www.bloomberg.com/news/2013-01-10/ibm-granted-most-u-s-patentsfor-20th-straight-year.html.
33. Gary L. Reback, Patently Absurd, FORBES, June 24, 2002, at 44, 45-46. RPX Corporation Data shows that IBM has been sued by nine operating companies since 2005, and only one since 2009. Email from RPX Corp. to Michael Risch, Professor of Law, Villanova Univ. Sch. of Law (June 3, 2013, 11:46 AM) (on file with the Duke Law Journal).
34. Elizabeth Woyke, An Insider on the Nortel Patent Auction and Its Consequences, FORBES (July 7, 2011, 11:40 AM), http://www.forbes.com/sites/elizabethwoyke/2011/07/07/aninsider-on-the-nortel-patent-auction-and-its-consequences.
35. David Drummond, When Patents Attack Android, GOOGLE BLOG (Aug. 4, 2011, 12:25 PM), http://googleblog.blogspot.com/2011/08/when-patents-attack-android.html ("They want to make it harder for manufacturers to sell Android devices. Instead of competing by building new features or devices, they are fighting through litigation. This anti-competitive strategy is also escalating the cost of patents way beyond what they're really worth.").
36. Evelyn M. Rusli & Claire Cain Miller, Google To Buy Motorola Mobility for $12.5 Billion, N.Y. TIMES DEALBOOK (Aug. 15, 2011, 9:16 AM), http://dealbook.nytimes.com/2011/08/15/google-to-buy-motorola-mobility.
37. Michael J. de la Merced, As It Warned, Yahoo Sues Facebook over Patents, N.Y. TIMES DEALBOOK (Mar. 25, 2012, 4:48 PM), http://dealbook.nytimes.com/2012/03/12/yahoo-suesfacebook-over-patents. Software engineers generally do not favor the use of patents to limit other software development.
38. See, e.g., Andy Baio, A Patent Lie: How Yahoo Weaponized My Work, WIRED (Mar. 13, 2012, 3:44 PM), http://www.wired.com/business/2012/03/opinion-baioyahoo-patent-lie.
39. Facebook Buys AOL Patents from Microsoft in $550m Deal, BBC (Apr. 23, 2012), http://www.bbc.co.uk/news/business-17820851.
40. SEC. v. W.J. Howey Co., 328 U.S. 293 (1946).
41. See, e.g., Vincent Chiappetta, Patent Exhaustion: What's It Good For?, 51 SANTA CLARA L. REV. 1087, 1133-35 (2011) (discussing differing approaches to patent exhaustion when considered on a patent-by-patent basis versus the market as whole).
42. Others might even fund patent litigation as well. Jack Ellis, Patent Litigation as an Asset Class, INTELL. ASSET MGMT. MAG., Nov./Dec. 2012, at 43, 44-45. This includes an exclusive license, which allows the licensee to enforce patents.
43. See Tom Ewing & Robin Feldman, The Giants Among Us, 2012 STAN. TECH. L. REV. 1, 3-7, http://stlr.stanford.edu/pdf/feldman-giants-among-us.pdf (detailing IV patents and corporate structure).
44. Funds, INTELL. VENTURES, http://www.intellectualventures.com/index.php/about/funds (last visited Aug. 19, 2013).
45. See, e.g., Pommer v. Medtest Corp., 961 F.2d 620, 623 (7th Cir. 1992) (applying securities laws to a company whose sole asset was a patent intended to be sold to a third party); Argentum Int'l, LLC v. Woods, 634 S.E.2d 195, 199 (Ga. Ct. App. 2006) (applying securities laws to a company w hose primary asset related to patent ownership).
46. United Hous. Found., Inc. v. Forman, 421 U.S. 837, 849 (1975).
47. See Gary L. Reback, Patently Absurd, FORBES (June 24, 2002), http://www.forbes.com/asap/2002/0624/044_print.html (describing IBM's portfolio-licensing practices).
48. Chester Chuang, Offensive Venue: The Curious Use of Declaratory Judgment To Forum Shop in Patent Litigation, 80 GEO. WASH. L. REV. 1065, 1067 (2012).
49. United Hous. Found., Inc. v. Forman, 421 U.S. 837 (1975).
50. See SEC v. Life Partners, Inc., 87 F.3d 536, 541-42 (1996) (holding that securities laws might apply to viatical settlements, even though state laws regulate them already).
51. See, e.g., Lear, Inc. v. Adkins, 395 U.S. 653, 671 (1969) (allowing licensees to challenge patents even when they agree not to do so).
52. Securities Act of 1933 § 2(a)(1), 15 U.S.C. § 77b(a)(1) (2012).
53. SEC v. W.J. Howey Co., 328 U.S. 293, 298-99 (1946).
54. See Tcherepnin v. Knight, 389 U.S. 332, 336 (1967) ("[F]orm should be disregarded for substance and emphasis should be on economic reality.")
55. see also United Hous. Found., Inc. v. Forman, 421 U.S. 837, 848 (1975) (refusing to find that shares of stock entitling the holder to lease apartments are securities merely because the interest was called "stock").
56. John G. Sobieski, What is a Security?, 25 MERCER L. REV. 381, 385 (1974).
57. THOMAS LEE HAZEN, THE LAW OF SECURITIES REGULATION § 1.6 (6th ed. 2009) ("The first difference is that securities are created rather than produced. Securities can be issued in unlimited amounts and virtually without any costs since securities are nothing in themselves but rather represent only an interest in something else. Therefore, an important focus of securities regulation is assuring that when securities are created and offered to the public, investors have an accurate idea of what that 'something else' is and how much of an interest in that 'something else' the security in question represents.").
58. Howey, 328 U.S. at 295-97.
59. SEC v. W.J. Howey Co., 328 U.S. 293, 298-99 (1946).
60. See Tcherepnin v. Knight, 389 U.S. 332, 336 (1967) ("[F]orm should be disregarded for substance and emphasis should be on economic reality.")
61. see also United Hous. Found., Inc. v. Forman, 421 U.S. 837, 848 (1975) (refusing to find that shares of stock entitling the holder to lease apartments are securities merely because the interest was called "stock").
62. John G. Sobieski, What is a Security?, 25 MERCER L. REV. 381, 385 (1974).
63. THOMAS LEE HAZEN, THE LAW OF SECURITIES REGULATION § 1.6 (6th ed. 2009) ("The first difference is that securities are created rather than produced. Securities can be issued in unlimited amounts and virtually without any costs since securities are nothing in themselves but rather represent only an interest in something else. Therefore, an important focus of securities regulation is assuring that when securities are created and offered to the public, investors have an accurate idea of what that 'something else' is and how much of an interest in that 'something else' the security in question represents.").
64. Howey, 328 U.S. at 295-97.
65. United Hous. Found., Inc. v. Forman, 421 U.S. 837, 852-53 (1975) (citation omitted) (quoting Howey, 328 U.S. at 300).
66. See 35 U.S.C. § 271(a) (2006) ("[W]hoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States. during the term of the patent. infringes the patent.").
67. Christopher M. Newman, A License Is Not a "Contract Not To Sue": Disentangling Property and Contract in the Law of Copyright Licenses, 98 IOWA L. REV. 1101, 1141-42 ("[T]he basic building block of all license interests-the use-privilege-is not a contractual duty, but a property interest conveyed in exactly the same manner used in the realm of tangible property.").
68. SEC v. Aqua-Sonic Prods. Corp., 524 F. Supp. 866, 877-78 (S.D.N.Y. 1981) (holding that patent licenses were securities in which sales of patented goods were performed by third parties other than the licensee).
69. George D. Kappus Jr. The Franchise as a Security: Application of the Securities Laws to Owner-Operated Franchise, 11 B.C. INDUS. & COM. L. REV. 228, 237 (1970) ("After the franchise is in operation, the franchisee's control over his property is illusory, and thus the profit of the franchise depends upon the efforts of the franchisor.").
70. United Hous. Found., Inc. v. Forman, 421 U.S. 837, 855-56 (1979).
71. See SEC v. Edwards, 540 U.S. 389, 394 (2004) ("Thus, when we held that 'profits' must 'come solely from the efforts of others,' we were speaking of the profits that investors seek on their investment, not the profits of the scheme in which they invest. We used 'profits' in the sense of income or return, to include, for example, dividends, other periodic payments, or the increased value of the investment." (quoting SEC v. W.J. Howey Co., 328 U.S. 293, 299 (1946)))
72. Guidry v. Bank of LaPlace, 954 F.2d 278, 284 (5th Cir. 1992) ("Expectation of profit carries with it a connotation of potential appreciation or depreciation in value of the investment contract. That is, the arrangement must be so structured as to contemplate at the outset, some risk-either that the investor could lose his investment, or that the value of his return could fluctuate.").
73. SEC v. Life Partners, Inc., 87 F.3d 536 (D.C. Cir. 1996).
74. B.J. Tannenbaum, Jr. SEC No-Action Letter, [1986] Sec. Reg. L. Rep. (BNA) 2975 (Dec. 4, 1986).
75. Howey, 328 U.S. at 300 ("Thus all the elements of a profit-seeking business venture are present here. The investors provide the capital and share in the earnings and profits; the promoters manage, control and operate the enterprise.").
76. Rodney L. Moore, Defining an "Investment Contract": The Commonality Requirement of the Howey Test, 43 WASH. & LEE L. REV. 1057, 1062 (1986).
77. Brodt v. Bache & Co., 595 F.2d 459, 461 (9th Cir. 1978) ("Here, strong efforts by Bache will not guarantee a return nor will Bache's success necessarily mean a corresponding success for Brodt.").
78. Long v. Shultz Cattle Co., 881 F.2d 129, 141 (5th Cir. 1989) ("Rather, the necessary interdependence may be demonstrated by the investors' collective reliance on the promoter's expertise even where the promoter receives only a flat fee or commission rather than a share in the profits of the venture.").
79. SEC v. Edwards, 540 U.S. 389, 397 (2004) ("The fact that investors have bargained for a return on their investment does not mean that the return is not also expected to come solely from the efforts of others.").
80. Justin Wolfers & Eric Zitzewitz, Prediction Markets, J. ECON. PERSP., Spring 2004, at 107, 110-11.
81. George R. Neumann CFTC No-Action Letter (June 18, 1993), available at http://www.cftc.gov/files/foia/repfoia/foirf0503b004.pdf
82. Tom W. Bell, Prediction Markets for Promoting the Progress of Science and the Useful Arts, 14 GEO. MASON L. REV. 37, 78 (2006) (arguing that prediction markets are not securities in part because they pit traders against each other, rather than in a common enterprise to amass investment).
83. SEC v. Brigadoon Scotch Distrib., Ltd., 388 F. Supp. 1288, 1291-92 (S.D.N.Y. 1975) (holding that there was commonality when the promoters used their expertise to find rare coins to be purchased by investors).
84. Caldwell v. State, 95 S.W.3d 563,568 (Tex. App. 2002) ("An investor in a commodities account who establishes that he or she relied solely on the investment advice of a promoter satisfies the 'solely from the efforts of others' requirement.").
85. Patent licenses are often viewed as an alternative to (and settlement of) potential litigation. As such, the payments made under license agreements are an alternative to potential damages (and defense) payments made in litigation.
86. John Kenneth Felter & Samuel Brenner, Settlement Evidence and Patent Damages, TRIAL EVIDENCE (Am. Bar Ass'n), July 2013, at 1, available at http://www.ropesgray.com/kenfelter/~/media/Files/articles/2013/07/ABA%20-%20TrialEvidence_ArticleReprint_FelterandBrenner.ashx.
87. Indeed, such payments are declared as restoring goodwill rather than as income. Tax Issues and Opportunities in Technology Litigation Judgments and Settlements, WNTS INSIGHTS (PricewaterhouseCoopers), Oct. 2, 2012, at 1, 1 (discussing treatment of damage payments as goodwill restoring value of damaged patent asset).
88. Securities Act of 1933 § 2(a)(1), 15 U.S.C. § 77b(a)(1) (2012) (defining securities to include any "fractional undivided interest in oil, gas, or other mineral rights").
89. United Hous. Found., Inc. v. Forman, 421 U.S. 837, 852 n.16 (1975) (noting the relaxation of the requirement without ruling on same)
90. Miriam R. Albert, The Howey Test Turns 64: Are the Courts Grading this Test on a Curve?, 2 WM. & MARY BUS. L. REV. 1, 19 (2011) ("Lower courts have considered whether 'solely' means 'only' in their articulation of the Howey test, and some courts have eased the rigidity of the need to have the profits derived solely from the efforts of others by including profits that come 'primarily,' 'substantially,' or 'predominantly' from the efforts of others. The Supreme Court itself softened its stance and seemingly endorsed a more relaxed standard.").
91. SEC v. Life Partners, Inc., 87 F.3d 536, 545 (D.C. Cir. 1996) (stating the test as "predominantly" through the efforts of others); SEC v. Int'l Loan Network, Inc., 968 F.2d 1304, 1308 (D.C. Cir. 1992) (holding that an investment contract satisfied the third prong of Howey where the profits were expected to arise "at least predominantly from the efforts of others"); Goodman v. Epstein, 582 F.2d 388, 408 n.59 (7th Cir. 1978) (holding that the investor's participation in arranging financing and proximity to the "management circle" made the investor's "Limited Partnership interest" an investment contract); SEC v. Glenn W. Turner Enters., 474 F.2d 476, 482 (9th Cir. 1973) (stating that the test requires "the efforts made by those other than the investor are the undeniably significant ones, those essential managerial efforts which affect the failure or success of the enterprise"); Blackwell v. Bentsen, 203 F.2d 690, 693 (5th Cir. 1953) (holding that the transaction constituted an investment contract when the investor gave binding marketing instructions to the promoter).
92. Furthermore, treating portfolios as securities might create a fiduciary duty to increase license value just as company management owes to shareholders
93. Stephen Bainbridge, CaseLaw on the Fiduciary Duty of Director To Maximize the Wealth of Corporate Shareholders, PROFESSORBAINBRIDGE.COM (May 5, 2012), http://www.professorbainbridge.com/professor bainbridgecom/2012/05/case-law-on-the-fiduciary-duty-of-directors-to-maximize-the-wealth-ofcorporate-shareholders.html. However, operation of such a duty is ambiguous; in some cases license value might be maximized by invalidation of the patent. It is unlikely that courts will impose fiduciary duties in such cases.
94. Noa v. Key Futures, Inc., 638 F.2d 77, 79-80 (9th Cir. 1980).
95. McCown v. Heidler, 527 F.2d 204, 211 (10th Cir. 1975).
96. Life Partners, 87 F.3d at 547-48.
97. Securities Act of 1933 §§ 7, 10, Sched. A, 15 U.S.C. §§ 77g, 77j, 77aa (2012) (listing information to be disclosed in a registration statement and prospectus, including balance sheets, profit and loss statements, and past contracts).
98. Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 749 (1975).
99. Wuliger v. Eberle, 414 F. Supp. 2d 814, 819-21 (N.D. Ohio 2006); SEC v. Tyler, No. 3:03-CV-0282-P, 2002 WL 32538418, at *6 (N.D. Tex. Feb. 21, 2002)
100. SEC v. Brigadoon Scotch Distrib., Ltd., 388 F. Supp. 1288, 1291-92 (S.D.N.Y. 1975) (holding that the sale of coins based on expertise exercised before purchase is a security).
101. SEC v. Mut. Benefits Corp., 408 F.3d 737, 745 (11th Cir. 2005).
102. Joseph J. Rotunda & Mogey Lovelle, From Stocks and Bonds Through Betting on Death: The Applicability of Securities Laws and the Regulation of New and Creative Investments, THE ADVOC., Summer 2012, at 58, 60.
103. State v. Heath, 153 S.E. 855, 858 (N.C. 1930) (holding that an exclusive copyright license was not a security when the licensee had control over the exploitation of the copyrighted work); State v. Williams, 563 P.2d 1270, 1271-72 (Wash. Ct. App. 1977) (holding that a fractional ownership interest in a patent is a security because of its small size).
104. SEC v. Glenn W. Turner Enters., Inc., 474 F.2d 476, 482 (9th Cir. 1973) (holding that an investment in a plan that required active sales efforts of the buyer was a security and noting that "the word 'solely' should not be read as a strict or literal limitation on the definition of an investment contract, but rather must be construed realistically, so as to include within the definition those schemes which involve in substance, if not form, securities"); Brigadoon Scotch, 388 F. Supp. at 1291-92 (holding that sale of coins constituted a security even though the buyer held the investment asset, coins, after purchase).
105. Charles W. Shifley, Industry Perspectives on Patent Damages Including the Damages Component of Settlement Negotiations, A.B.A, http://www.ftp.abanet.org/litigation/committees/intellectual/articles.html (last visited Aug. 19, 2013) (discussing the "greater interest of industry defendants to have parity with their competitors than in their absolute costs").
106. Silver Hills Country Club v. Sobieski, 361 P.2d 906 (Cal. 1961).
107. Dennis S. Corgill, Securities as Investments at Risk, 67 TUL. L. REV. 861, 868 (1993).
108. Silver Hills Country Club, 361 P.2d at 908; see also Reves v. Ernst & Young, 494 U.S. 56, 66-67 (1990) (discussing the family-resemblance test and an examination of motivations, expectations, and distribution plans).
109. United Hous. Found., Inc. v. Forman, 421 U.S. 837, 857 n.24 (1975).
110. JOSEPH C. LONG, 12 BLUE SKY LAW §§ 2:80, 2:86 (2012) (describing the use of the risk-capital test in California, Florida, Georgia, Hawaii, Michigan, Oregon, Tennessee, Washington and other states).
111. United States v. Schaefer, 299 F.2d 625, 628 (7th Cir. 1962) (holding that the sale of interest in profits from a patent is a security); People v. Shafer, 19 P.2d 861, 862 (Cal. Dist. Ct. App. 1933) (holding that the sale of the right "to participate to the amount of his or her interest in any future enterprises of any nature whatever which may grow out of or arise from said invention or any letters patent which may be issued thereon" constituted a security under California law).
112. Schmoyer v. Van Hosen, 208 P. 554, 557 (Kan. 1922) ("If the purpose [of the Kansas Blue Sky law] had been to require a permit for the sale of patent rights of a speculative character we think it would have been indicated expressly or by clearer implication than we find in the present statute.").
113. Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (codified as amended in scattered sections of the U.S. Code).
114. Securities Act of 1933 § 5, 15 U.S.C. § 77e (2012).
115. Securities Exchange Act of 1934 §§ 12, 13, 14 U.S.C. §§ 78l, 78m, 78n (2012).
116. Securities Act of 1933 §4(a)(2) (exempting "transactions by an issuer not involving any public offering")
117. SEC v. Ralston Purina Co., 346 U.S. 119, 125-27 (1953) (holding that exemption depends in part on investor sophistication and information)
118. E.F. Hutton & Co., SEC No-Action Letter, 18 Sec. Reg. L. Rep. (BNA) 171, 172 (Jan. 31, 1986) (noting that the existence of prior substantive relationships with offerees is a factor in evaluating whether a general solicitation has occurred); Use of Legends and Stop-Transfer Instructions as Evidence of Non-Public Offering, Securities Act Release No. 33-5121, 36 Fed. Reg. 1525 (Dec. 30, 1970) (noting that the existence of an appropriate legend or stop-transfer instructions is a factor to be considered in determining whether to grant an exemption); Letter of General Counsel, Securities Act Release No. 285, 11 Fed. Reg. 10953 (Jan. 24, 1935) (explaining the importance of an issuer's selection of and relationship with offerees).
119. Joe Mullin Patent Trolls Want $1,000-for Using Scanners, ARS TECHNICA (Jan. 2, 2013, 9:30 AM) http://arstechnica.com/tech-policy/2013/01/patent-trolls-want-1000-forusing-scanners (describing one particular entity that sent out "hundreds, if not thousands, of copies of the same demand letter to small businesses").
120. SEC v. Tecumseh Holdings Corp., No. 03 Civ. 5490(SAS), 2009 WL 4975263, at *4 (S.D.N.Y. 2009) (holding that an offeror's nationwide cold-calling campaign was a general form of solicitation that precluded exceptions under Regulation D, 17 C.F.R. §§ 230.501-508 (2003)).
121. Risdall v. Brown-Wilbert, Inc., 753 N.W.2d 723, 726, 734 (Minn. 2008) (recalling that a posting on the Internet constituted general advertising and solicitation).
122. Kristin Johnson Doyle, Patent Demand Letters: Avoiding Declaratory Judgment Jurisdiction, INTELL. PROP. TODAY, Feb. 2010, at 30, available at http://www.iptoday.com/issues/2010/02/patent-demand-letters-avoiding-declaratory-judgment-jurisdiction-part-2-2.asp.
123. E.F. Hutton & Co., SEC No-Action Letter, 18 Sec. Reg. L. Rep. (BNA) at 172 ("Substantive relationships may be established with persons who have provided satisfactory responses to questionnaires that provide Hutton with sufficient information to evaluate the prospective offerees' sophistication and financial circumstances.").
124. Portfolio owners would not be left without a remedy. They could sue sellers of the products that enable end users to infringe. See 35 U.S.C. §271(c) (2006) (defining contributory liability to include providing components of infringing product). One concern with mass demand letters is that they bypass the lowest cost defendant in the chain: the intermediate enabler.
125. Lewis v. Fresne, 252 F.3d 352, 358 (5th Cir. 2001) ("Two of the criteria for determining if a transaction is public are the size of the offering and the number of offerees.").
126. ESI Montgomery Cnty., Inc. v. Montenay Int'l Corp., 899 F. Supp. 1061, 1065 (S.D.N.Y. 1995) ("Whether an offering is public within the meaning of the 1933 act depends on '(1) the number of offerees; (2) the sophistication of the offerees, including their access to the type of information that would be contained in a registration statement; and (3) the manner of the offering.'" (quoting United States v. Arutunoff, 1 F.3d 1112, 1118 (10th Cir. 1993))).
127. [17] C.F.R. § 230.506 (2013)
128. Benjamin G. Lombard, United States: SEC Eliminates Prohibition Against General Solicitation in Rule 506 Offerings and Adopts Rule DisqualifyingBad Actors from Rule 506 Offerings, MONDAQ, http://www.mondaq.com/unitedstates/x/252122/Securities/SEC+Eliminates+Prohibition+Against+General+Solicitation+In+Rule+506+Offering s+And+Adopts+Rule+Disqualifying+Bad+Actors+From+Rule+506+Offerings (last visited Aug. 19, 2013).
129. Christine Hurt, More on General Solicitation: The Death of the IPO?, THE CONGLOMERATE (July 16, 2013), http://www.theconglomerate.org/2013/07/more-on-generalsolicitation-the-death-of-the-ipo.html ("Company B can purchase billboards, taxi signs, sandwich boards, Facebook ads, or even send an email to every person on earth. The catch is that it can accept offers to buy only from accredited investors.").
130. David McLaughlin, Apple, Google Deal for Kodak Patents Approved by Judge, BLOOMBERG (Jan. 11, 2013, 1:09 PM), http://www.bloomberg.com/news/2013-01-11/applegoogle-deal-for-kodak-patents-approved-by-judge.html. Put aside for one moment that the bankruptcy court sanctioned the sale, which might change the way that exemptions are viewed.
131. Debtors' Motion For Orders (I) (A) Conditionally Authorizing the Sale of Patent Assets Free and Clear of Claims and Interests, (B) Establishing a Competitive Bidding Process and (C) Approving the Notice Procedures and (II) Authorizing the Sale of Patent Assets Free and Clear of Claims and Interests at 10-11, In re Eastman Kodak Company, 479 B.R. 280 (Bankr. S.D.N.Y. 2012) (No. 12-10202 (ALG)), 2012 WL 3880042, at *22-23 (requiring as a condition for bidding "preliminary proof of the financial capacity of such person or entity to close the Sale, which may include current unaudited or verified financial statements of such person or entity").
132. Securities Act of 1933 § 4(a)(1), 15 U.S.C. § 77d(a)(1) (2012) (excepting "transactions by any person other than an issuer, underwriter, or dealer").
133. SEC Rules 144 and 144A detail some exceptions to this rule. See 17 C.F.R. §§ 230.144, 144A (2013).
134. Securities Act of 1933 § 4(a)(1)
135. About Ocean Tomo, OCEAN TOMO, http://www.oceantomo.com/about (last visited June 30, 2013).
136. It would be an underwriter if it were considered to be selling on behalf of an issuer. See SEC v. Chinese Consolidated Benevolent Ass'n, 120 F.2d 738, 741 (2d Cir. 1941) (holding that acompany that assisted with the solicitation of an investment is an underwriter). If it merely assisted, then perhaps not.
137. In re Refco, Inc., Sec. Litig. No. 05 Civ. 9626(GEL), 2008 WL 3843343, at *4 (S.D.N.Y. 2008) ("While the definition of 'underwriter' is indeed broad and is to be interpreted broadly, it must be read in relation to the underwriting function that the definition is intended to capture.").
138. Securities Act of 1933 § 4(a)(3)
139. A Section 4(a)(11/2) exemption just does not have the same panache following the recent addition of an "(a)" subpart in what used to be §§ 4(1) and 4(2). See Jumpstart Our Business Startups Act, Pub. L. No. 112-106, § 201, 126 Stat. 306, 313 (2012).
140. Carl W. Schneider, Section 4(1-1/2)-Private Resales of Restricted or Control Securities, 49 OHIO ST. L.J. 501, 510 (1988) ("Thus, there would appear to be no reason to preclude an intent (or at least reservation of the right) to make further private resales by the initial Holder or his Purchaser, absent a pyramiding problem that results in a public offering from a series of purportedly integrated private sales.").
141. Securities Act of 1933 § 3(b) (allowing regulations to exempt offerings less than $5,000,000); 17 C.F.R. §§ 230.504-505 (2013) (providing safe harbors for smaller transactions).
142. Securities Act of 1933 § 4(a)(5)
143. [17] C.F.R. § 230.501(a)(3).
144. Of course, blockbuster portfolio transactions will exceed the aggregate total
145. Securities Act of 1933 § 4(a)(5), 15 U.S.C. § 77d(a)(5) (2012); 17 C.F.R. §239.500.
146. [17] C.F.R. § 230.502(d).
147. Resolution of a bona fide patent dispute might be considered a private placement
148. ICAP PATENT BROKERAGE, http://icappatentbrokerage.com (last visited Aug. 20, 2013)
149. OCEAN TOMO, http://www.oceantomo.com (last visited Aug. 20, 2013).
150. 17 C.F.R. § 240.3a4-1 (2013).
151. FIN. INDUS. REGULATORY AUTH., REGULATORY NOTICE 10-22, REGULATORY D OFFERINGS: OBLIGATION OF BROKER-DEALERS TO CONDUCT REASONABLE INVESTIGATIONS IN REGULATION D OFFERINGS 3 (2010), available at http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p121304.pdf.
152. The Laws that Govern the Securities Industry, U.S. SEC. & EXCHANGE COMMISSION, http://www.sec.gov/about/laws.shtml (last visited Aug. 20, 2013) (stating that one objective of the 1933 Act is to "prohibit deceit, misrepresentations, and other fraud in the sale of securities").
153. [17] C.F.R. § 240.10b-5.
154. Section 11 of the 1933 Act would provide additional remedies for false statements in registration statements for public offerings. See Securities Act of 1933 § 11, 15 U.S.C. § 77k (2012).
155. Herman & Maclean v. Huddleston, 459 U.S. 375, 389 (1983) ("Indeed, an important purpose of the federal securities statutes was to rectify perceived deficiencies in the available common-law protections by establishing higher standards of conduct in the securities industry."); SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180, 194 (1963) ("[T]he doctrines of fraud and deceit which developed around transactions involving land and other tangible items of wealth are ill-suited to the sale of such intangibles as advice and securities, and., accordingly, the doctrines must be adapted to the merchandise in issue.")
156. Weston Instruments, Inc. v. Systron-Donner Corp., No. C-74-1099, 1978 U.S. Dist. LEXIS 15987, at *1, *6-7 (N.D. Cal. Aug. 16, 1978) (refusing to apply securities laws to patent-related fraud).
157. Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 745 (1975) ("In today's universe of transactions governed by the 1934 Act, privity of dealing or even personal contact between potential defendant and potential plaintiffis the exception and not the rule."); Cochran v. Channing Corp., 211 F. Supp. 239, 244 (S.D.N.Y. 1962) (reasoning that privity of contract was not required for a securities-fraud violation). Antitrust laws would be unlikely to reach an earlier wrongdoer as well.
158. Chiarella v. United States, 445 U.S. 222, 226-30 (1980).
159. Dennis W. Carlton & Daniel R. Fischel, The Regulation of Insider Trading, 35 STAN. L. REV. 857, 884 (1983) ("[S]ection 10(b) of the Security Exchange Act of 1934 and Rule 10b-5. require corporate insiders and tippees either to disclose material inside information or to refrain from trading.").
160. [35] U.S.C. § 102(b) (2006), amended by Leahy-Smith America Invents Act, Pub. L. No. 112-29, § 3(b)(1), 125 Stat. 284, 285 (2011).
161. Roy Strom, Wi-Fi Case Sheds Light on Patent Trolls, CHICAGO LAWYER (Apr. 1, 2013), http://chicagolawyermagazine.com/Archives/2013/04/Innovation-Patent-Trolls.aspx ("For one, [Cisco's counsel] said most of the patents that Innovatio is asserting were already licensed by Broadcom to a host of other companies. Because he believes they were previously licensed, Innovatio cannot try to collect that fee again, he said.")
162. Chiarella, 445 U.S. at 230.
163. 17 C.F.R. § 240.10b5-1(a) (2013) (defining manipulative and deceptive acts to include "the purchase or sale of a security of any issuer, on the basis of material nonpublic information about that security or issuer, in breach of a duty of trust or confidence that is owed directly, indirectly, or derivatively, to the issuer of that security or the shareholders of that issuer").
164. Bd. of Trade of Chi. v. SEC, 923 F.2d 1270, 1272-73 (7th Cir. 1991) (holding that a computerized system was not an "exchange").
165. Therese H. Maynard, What is an "Exchange?"-Proprietary Electronic Securities Trading Systems and the Statutory Definition of an Exchange, 49 WASH. & LEE L. REV. 833, 902 (1992) ("[B]uying and selling interests meet on the exchange floor, in contrast to the [over-thecounter] market where buy and sell offers 'come together only through dealers who interpose themselves between the parties.'" (quoting Bd. of Trade of Chi., 923 F.2d at 1274 (Flaum, J., dissenting))).
166. 17 C.F.R. § 240.6a-1 (providing guidelines for filing an application for an "exemption from. registration based on limited volume").
167. IPX Int'l, Presentation 2 (Nov. 14, 2012) (pitch book on file with the Duke Law Journal).
168. Ian McClure, The Value of IP as a Commodity, INTELL. ASSET MGMT. MAG., May/June 2011, at 29, 31 (2011) (describing consumable licenses).
169. Robert Hatch, Reforming the Murky Depths of Wall Street: Putting the Spotlight on the Security and Exchange Commission's Regulatory Proposal Concerning Dark Pools of Liquidity, 78 GEO. WASH. L. REV. 1032, 1034-35 (2010).
170. Interestingly, however, because portfolios themselves would be securities, they would not be considered "asset-backed" securities under 1933 Act registration requirements, and thus would avoid some more stringent reporting requirements. It is unclear whether a patent portfolio would meet either definition, but it would more likely meet the broader 1934 Act definition. Compare 17 C.F.R. § 229.1101(c) (2013) (defining "asset-backed securities" for Regulation AB registration), with Securities Exchange Act of 1934 § 3(a)(79), 15 U.S.C. §78c (2012) (defining "asset-backed securities" for the Dodd-Frank Act).
171. Mark J. Roe, Clearinghouse Overconfidence, 101 CALIF. L. REV. (forthcoming 2013) (manuscript at 13), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id= 2224305 ("In such informationally-opaque markets, spreads widen between the occasional trader's buying price and another occasional trader's selling price, with wide spreads profiting experienced, informed traders. Because a clearinghouse with public pricing gives outsiders the same information as the regular traders, spreads narrow. Trading becomes less expensive.").
172. Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 135 (1969) (disallowing enforcement of patents on noninfringing products); Brulotte v. Thys Co., 379 U.S. 29, 32-33 (1964) ("[A] patentee's use of a royalty agreement that projects beyond the expiration date of the patent is unlawful per se.").
173. Zila, Inc. v. Tinnell, 502 F.3d 1014, 1021 (9th Cir. 2007) ("[A] contract that provides for royalties either when a patent expires or when it fails to issue cannot be upheld unless it provides a discount from the alternative, patent-protected rate."); Meehan v. PPG Indus., Inc., 802 F.2d 881, 885-86 (7th Cir. 1986) ("Even when an inventor has not yet applied for a patent, the right to apply for and obtain those protections is valuable."); Boggild v. Kenner Prods., 776 F.2d 1315, 1319-20 (6th Cir. 1985) (explaining that a license must distinguish between patent and nonpatent royalties)
174. Pitney Bowes, Inc. v. Mestre, 701 F.2d 1365, 1371-72 (11th Cir. 1983) (noting that Brulotte applies to hybrid agreements)
175. Span-Deck, Inc. v. Fab-Con, Inc., 677 F.2d 1237, 1247 (8th Cir. 1982) (noting that a hybrid license must differentiate between patent and nonpatent consideration)
176. Zenith Radio Corp., 395 U.S. at 139-40
177. Aronson v. Quick Point Pencil Co., 440 U.S. 257, 261-62 (1979) (holding that a royalty that decreases when a patent does not issue is enforceable)
178. Am. Securit Co. v. Shatterproof Glass Corp., 268 F.2d 769, 777 (3d Cir. 1959) (holding that package patent licensing is misuse if it is a sham).
179. Hull v. Brunswick Corp., 704 F.2d 1195, 1202-03 (10th Cir. 1983) (holding that the continuation of royalties under one patent after the expiration of a second patent is enforceable); cf. Zila, Inc., 502 F.3d at 1021-22 ("This understanding, however, may well overread both Brulotte and Aronson, by glossing over the unique and onerous contractual restrictions at issue in Brulotte and relying on a sentence in Aronson that is really only dicta. In short, were we writing on a clean slate, we might be inclined to read the dicta in Aronson as nonbinding in light of what appears on its face to be a very limited holding in Brulotte. By doing so, we would largely avoid attributing to the Supreme Court in Brulotte and Aronson the lack of economic logic laid at its feet.").
180. U.S. Philips Corp. v. Int'l Trade Comm'n, 424 F.3d 1179, 1193 (Fed. Cir. 2005) ("[G]rouping licenses in a package allows the parties to price the package based on their estimate of what it is worth to practice a particular technology, which is typically much easier to calculate than determining the marginal benefit provided by a license to each individual patent.").
181. Broad. Music, Inc. v. Columbia Broad. Sys., Inc., 441 U.S. 1, 24-25 (1979) (holding that ASCAP's blanket license was not per se illegal and remanding the case to determine whether the license was illegal under rule-of-reason analysis).
182. [34] AM. JUR. 2D Federal Taxation § 42,044 (2013).
183. Jonathan A. Barney, A Study of Patent Mortality Rates: Using Statistical Survival Analysis To Rate and Value Patent Assets, 30 AIPLA Q.J. 317, 323 (2002).
184. Nilay Patel, Intel Agrees To Pay NVIDIA $1.5b in Patent License Fees, Signs Cross-license, ENGADGET (Jan. 10, 2011, 5:07 PM), http://www.engadget.com/2011/01/10/intelagrees-to-pay-nvidia-1-5b-in-patent-license-fees-signs-c.
185. Carl Shapiro, Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting, in 1 INNOVATION, POL'Y, & ECON. 119, 128 (Adam B. Jaffe, Josh Lerner & Scott Stern eds., 2001).
186. 35 U.S.C. § 299 (Supp. V 2011) (limiting joinder of defendants).
187. Michael J. Mazzeo, Jonathan Hillel & Samantha Zyontz, Predicting the "Unpredictable": An Empirical Analysis of U.S. Patent Infringement Awards 3 (Oct. 21, 2012) (unpublished manuscript), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2164787 (finding that objective patent criteria predict 75 percent of infringement damages awards).
188. See generally ROBERT PITKETHLY, THE VALUATION OF PATENTS: A REVIEW OF PATENT VALUATION METHODS WITH CONSIDERATIONS OF OPTION BASED METHODS AND THE POTENTIAL FOR FURTHER RESEARCH (1997)
189. Nicholas Bloom & John Van Reenen, Patents, Real Options, and Firm Performance, 112 ECON. J. C97 (2002).
190. Ming-Cheng Wu & Chun-Yao Tseng, Valuation of Patent-A Real Options Perspective, 13 APPLIED ECON. LETTERS 313, 316 (2006) (using citations as a proxy for patent value to calculate option price).
191. Piotr Masiakowski & Sunny Wang, Integration of Software Tools in Patent Analysis, 35 WORLD PAT. INFO. 97 (2013) (describing tools for textual analysis of patent portfolios).
192. David S. Abrams, Ufuk Akcigit & Jillian Popadak, Understanding the Link Between Patent Value and Citations: Creative Destruction or Defensive Disruption? 1 (Apr. 8, 2013) (unpublished manuscript), available at http://www.kentlaw.iit.edu/Documents/Academic%20 Programs/Intellectual%20Property/PatCon3/abrams.pdf.
193. See John R. Allison, Mark A. Lemley & Joshua Walker, Patent Quality and Settlement Among Repeat Patent Litigants, 99 GEO. L.J. 677, 681, 686-87 (2011) (noting that most-litigated patent plaintiffs won only 10.7 percent of suits as compared with 47.3 percent of once-litigated patent plaintiffs).
194. See Christopher A. Cotropia, Mark A. Lemley & Bhaven Sampat, Do Applicant Patent Citations Matter?, 42 RES. POL'Y 844, 844 (2013) ("We find, to our surprise, that patent examiners did not use applicant-submitted art in the rejections that narrowed claims before these patents issued, relying almost exclusively on prior art they find themselves.").
195. See Manuel Trajtenberg, Rebecca Henderson & Adam B. Jaffe, University Versus Corporate Patents: A Window on the Basicness of Invention, in ADAM B. JAFFE & MANUEL TRAJTENBERG, PATENTS, CITATIONS & INNOVATIONS: A WINDOW ON THE KNOWLEDGE ECONOMY 60, 63 (2002) (defining generality and originality).
196. U.S. Patent No. 2,569,347 (filed June 26, 1948).
197. See, e.g., Alfonse Gambardella, Professor of Corporate Mgmt., Bocconi Univ., Presentation to the OECD Conference on Patent Practice & Innovation, The Value of Patent Portfolios: Numbers vs Average Quality 20 (May 10, 2012), available at http://www.oecd.org/sti/innovationinsciencetechnologyandindustry/workshop-patent-practice-and-innovation-Gambardella.pdf (showing the role of number of patents in portfolio value).
198. See, e.g., Kristen Osenga, The Shape of Things To Come: What We Can Learn from Patent Claim Length, 28 SANTA CLARA COMPUTER & HIGH TECH. L.J. 617, 632-34 (2012) (finding that claim length varies based on whether the claim is dependent or independent).
199. F. Russell Denton, Rolling Equilibriums at the Pre-Commons Frontier: Identifying Patently Efficient Royalties for Complex Products, 14 VA. J.L. & TECH. 48, 69-72 (2009) (proposing use of descriptive factors to value patents).
200. See Joshua Lerner, The Importance of Patent Scope: An Empirical Analysis, 25 RAND J. ECON. 319, 320 (1994) (discussing claim scope in terms of patent classes).
201. E.g. Jonathan Putnam, The Value of International Patent Rights (1996) (unpublished Ph. D. Thesis, Yale University) (on file with the Duke Law Journal).
202. See Evelyn M. Sommer, Patent License Restrictions, 59 CONN. B.J. 236, 249-53 (1985) (stating that collecting royalties from expired patents may be considered an antitrust violation).
203. ARTICLE ONE PARTNERS, http://www.articleonepartners.com (last visited Aug. 20, 2013).
204. Weekly Discussion: Guaranteed Rewards, ARTICLE ONE PARTNERS (Apr. 27, 2010), http://www.articleonepartners.com/newsletter/20100427.html.
205. Marshall Phelps & Cheryl Milone, LTE Standard Essential Patents Now and in the Future, ARTICLE ONE PARTNERS (Feb. 2012), http://newsletters.articleonepartners.com/news_f1317eac-ee13-5a66-d0f5-38ea99a4c1eeLTE-Standard-Essential-Patents-Now-and-in-the-Future.pdf.
206. MECHANICAL TURK, http://www.mechanicalturk.com (last visited Nov. 10, 2012).
207. RICHARD H. THALER & CASS R. SUNSTEIN, NUDGE: IMPROVING DECISIONS ABOUT HEALTH, WEALTH, AND HAPPINESS (2008) (arguing that default rules can encourage behavior even if the rules can be avoided without legal penalty).