Prior Foundation Award Recipients

Fourth Annual LES Foundation Dinner
Welcomes Judge Richard A. Posner

The Annual LES Foundation Reception and Dinner has become a "Right of Spring" for many in the field, including several hundred industry leaders who gathered on April 13th at the Four Seasons Hotel in Chicago for the fourth year of the event.

The evening, hosted by the LES Foundation, provided a rare opportunity for business, legal, academic and licensing professionals to network and enjoy a dynamic discussion of current issues with this year's Foundation Award Honoree, Richard A. Posner, Chief Judge of the U.S. Court of Appeals for the Seventh Circuit and Senior Lecturer at the University of Chicago Law School.

Past Honorees have included leading figures in health care (Dr. Leroy Hood), communications (Dr. Robert Lucky), and venture capital (Mr. John Denniston).

"Each year The Foundation chooses its' Lecture Honoree in memory of LES founder Dudley B. Smith whose viewpoints were often provocative but always well-reasoned," said Ada Nielsen, Vice President of the LES Foundation's Board of Directors and Chair of the event. "Our goal is always to stimulate a lively exchange of ideas and an open debate of the issues."

Judge Posner, a nationally renowned thought leader and expert on the economic structure of law, was well suited to the task. Amused by his reputation as somewhat of a lightening rod, Judge Posner shared his opinions and theoretical perspectives and took questions from interested attendees on the economic impact of intellectual property transactions and antitrust concerns.

Central to his message was the notion that the "serious problem" of high transaction costs (i.e., the "tedium" and sheer expense of the licensing process) is exacerbated by the Sonny Bono Act, which has extended the life of many copyrights (20 years) well past a time when they can reasonably be expected to retain commercial value. In his view, the enormity of current transaction costs justifies the curtailment of intellectual property rights, a broader fair use defense and relaxation of antitrust restrictions to avoid a chilling effect on the development of intellectual works.

"The fact that there are term limits shows that the law thinks transaction costs are too high and intellectual property rights should be limited," said Judge Posner. "I approve of that. We cannot treat these rights with the same sanctified respect as physical property." Judge Posner advocated use of the patent registration system not only to help licensees find patent owners, but also to allow licensors to demonstrate continued interest in keeping their patents active.

Judge Posner went on to suggest that the Supreme Court had "gotten off on the wrong foot" by describing intellectual property rights as monopolistic. "Their unsound restriction reflects a misunderstanding of what intellectual property rights convey," he said concluding that, while it will take time, the Supreme Court will come to see that intellectual property rights provide the right to exclude people as a means of reducing copying but are not monopolistic. "The judges have not caught up with what the economists have learned," he said.

Copyright licensing figured more prominently in Judge Posner's remarks than did patent licensing. During the final question and answer period, attendees pressed Judge Posner to more specifically define and discuss troublesome transactions costs. He responded by making a distinction between "parity", which is protected by fair use as a critique and a "derivative work", which is not protected as it is seen to constitute a substitute work.

Licensing Colloquium

The LES Foundation Annual Dinner was preceded by a Colloquium discussion that offered attendees a rare look into licensing through an in-depth discussion of the three major industry surveys routinely conducted by the LES Foundation (USA-Canada), the Intellectual Property Owners Association (IPO), and the Association of University Technology Managers (AUTM).

Dr. Richard Razgaitis, LES Foundation President, led an expert panel discussion with preliminary findings from the 2005 survey of Licensing Executives Society (USA- Canada), members. Survey responses and data are particularly robust this year providing interesting insights into "best practices" in the field.

Other panel members included Iain Cockburn (Boston University), Ashley Stevens (AUTM) and Ronald Bleeker (IPO) each of whom provided insight into their respective survey methods and recent findings.

Data from the three surveys was used to analyze three questions: What does our industry look like? What are some of the 'hot issues' and how do people in the industry view these issues? And, Are there 'Barbarians at the Gate?'

Of particular note was a clear indication that industry professionals feel the threat of ‘Barbarians at the Gate' more than ever before. Just three years ago, fewer than 50% of licensing professionals (in all four industry segments and company sizes surveyed) reported a "moderate" or "strong" cause for concern.

Today, well over 50% of those who responded in each of the three groups surveyed (life sciences (74%), large and small (60%), and digital economy large (58%)) reported feeling the threat of the ‘Barbarians'. The remaining five segments surveyed also voiced increased concern over the past three years.

A more in-depth look at the Colloquium data will be available on the LES Foundation's website (www.licensingfoundation.org) in coming weeks. And, be sure to watch for a complete summary of this year's Survey of Licensing in an upcoming issue of Les Nouvelles.

Ongoing Work by the LES Foundation

The LES Foundation was established in 2000 by the Licensing Executives Society (U.S.A. and Canada) as a not-for-profit educational organization dedicated to helping professionals who work with intellectual properties stay current in an industry that is encountering dramatic growth and change. The Foundation continues its work to enhance networking, professional development and educational opportunities for its members as well as to serve as an information resource through a variety of programs and outreach including the Licensing Survey, Dinner and Colloquium.

Please plan on attending the Annual LES Foundation Dinner and Colloquium April 2006 in Washington, DC. The Dudley B. Smith Lecture Series Honoree will be Dean Kamen, entrepreneur and inventor of dozens of innovative products, including the Segway, and a stair-climbing wheel chair.