March 18, 2013 Issue
The Most Powerful Name In Corporate News and Information
Facilitating, Evaluating and Advising Clients on the most Efficient and Effective way To Affect Intellectual Property Sales and Patent Purchases, Pluritas, LLC is Know in the Market for being Leaders in Patent Transactions
About Pluritas, LLC:
Pluritas draws upon more than a decade of in-market IP transaction experience. We provide the experience of top-notch business executives, patent attorneys and technologists. We analyze the risk profile of IP assets under consideration from every angle. We identify and assess the strengths and weaknesses of rights as buyers, licensees, and potential partners would view them.
The partners at Pluritas
have successfully managed and closed more than 100 patent and brand
transactions on behalf of clients that include Fortune 50 companies, small
and medium-sized businesses, distressed entities, and independent inventors.
Mr. Aronoff is Managing Partner and Founder of Pluritas, a leading Intellectual Property advisory and transaction firm headquartered in San Francisco, California, USA. Mr. Aronoff brings more than 25 years’ experience serving Fortune 500 companies, business strategy and technology consulting firms and leading small-cap public companies. He has worked as a manager of products, technology and technology strategy at Sun Microsystems (now part of Oracle), Eastman Kodak, Microsoft, Coopers & Lybrand and Peat Marwick. He provides clients with insight into what facilitates and impedes IP asset values, in addition to strong negotiating skills and contacts.
While at Kodak, Mr Aronoff served as founding executive director of the digital imaging group, an imaging industry consortium that had the financial and technical backing of Kodak, Fuji, Canon, Intel, HP, IBM, Adobe, Agfa and Microsoft. Earlier in his career, Mr Aronoff advised on business acquisitions and advanced technology projects in IT consulting for Peat Marwick. He subsequently developed working artificial intelligence systems at Coopers & Lybrand for clients trading foreign exchange and underwriting insurance risk.
Mr Aronoff earned Bachelors of Arts in both computer science and economics from Brandeis University, where he was recognized as a Milton Feld economics scholar, and an MBA from the MIT Sloan School of Management where he won the William L Stewart Award for outstanding contributions to the university. Mr. Aronoff is also a testifying expert on the IP Marketplace, and is a speaker and writer on strategy and trends in IP transactions.
IP Advisory Services
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – March 18, 2013
CEOCFO: Mr. Aronoff, would you tell us about Pluritas?
Mr. Aronoff: Pluritas is an intellectual property transaction advisory firm. We facilitate, evaluate and advise clients on the most efficient and effective way to affect intellectual property sales and patent purchases. We do some brand deals as well. However, we are more well known in the market for being leaders in patent transactions.
CEOCFO: What are some of the unique challenges in reviewing a patent transaction?
Mr. Aronoff: The biggest challenge for patents is that they are intangible assets. That presents a challenge because they require multi-disciplinary expertise to assess their value. You need legal expertise, technical expertise and business acumen. In addition, you need to know the market place in multiple dimensions to be able to provide a competent assessment of the value or potential value range for the patent in any kind of transaction environment.
CEOCFO: Is there a place for “gut instinct” or is it more technical? What is involved in the analysis process?
Mr. Aronoff: In reviewing a patent portfolio we rely on both our ten years, plus, of experience with diverse IP transactions combined with the details of the specific situation. We do a lot of detailed analysis on the asset; on the intellectual property. We regard it from a standpoint of its legal strengths and weaknesses, its technology’s strength and weaknesses and its market leverage. We also rely on our experience related to comparable account transactions, our experience with potential buys or defendants depending on the kind of transaction that we are talking about. It is very much a combination of experience with deep analysis and judgment all coming together to provide the assessment and ultimately, the evaluation and the transaction on the Intellectual Property assets.
CEOCFO: With an economy that is tenuous, with government regulations that are coming into play in areas that they never have before, how are you able to evaluate the current value of a patent as well as a couple of years ahead?
Mr. Aronoff: The economy has gone through several cycles in the ten plus years that we have been providing this service here at Pluritas, and has seen at least two significant recessions, and a steady flow of changes to the laws applied to patent assets. The dot com bubble and the credit crisis provided many savvy traders in IP tremendous opportunity. The big companies, with technology needs on a global scale, the investors who are “patent rights savvy”, understand the big picture; understand what a patent can do for you. When you get economic cycles factored into that, what you see swinging back and forth as a pendulum is the powers between buyers and sellers. The underlying pricing of an asset shifts up and down as the economy and the liquidity change from time to time. However, there are also very strong long-term trends and underlying asset value which really does not change in that context. Add to that, changes in the legal landscape. There have been, there are and there continue to be significant changes afoot on what you can do with these assets, how much you can extract for these legal rights and who has the leverage in that equation. Often there is a very public struggle involving big companies and non-practicing entities (NPEs) and financial investors and even countries seeking advantages in intellectual property rights in, for example, the US and China. These are additional factors that come into play in the analysis. What this all adds up to is this is indeed very complex and you need experienced and sage input covering a variety of different considerations and factors in order to get it right. We have the benefit of seeing all this first hand over the last decade plus, and have been able to refine our models, our analysis, and our instincts accordingly. This is how we are able to reliably evaluate and value patents in the context of this ever shifting landscape every day.
CEOCFO: Are there particular industries that are more of a focus for you in terms of doing your evaluations?
Mr. Aronoff: Absolutely. We have traditionally been very “high technology” oriented, which is everything from computing to mobile handsets, to consumer electronics; things which often start with “chip level” solutions all the way up through the operating systems, the software, the user interface content and the systems solutions. Nowadays, those kinds of technologies and systems are found in a broader range of products than ever before-- ranging from the automotive solutions, the wired car of the future and all the new technologies going into automotive, to medical devices; personal care products that are emerging onto the markets, the smart television set, and of course the desk tops, lap tops, tablets, PCs, handsets; they are out there in the billions of units globally. We deal with software, we deal with social networking and commerce, we deal with advertising technologies; the full range. What we have not done a lot of to date are transactions in the bio and pharma markets. Those markets are structured quite differently and the assets are transacted and montized quite differently. However, in markets where technologies and patents are very fluid, we are very active. Another strongly emerging area for us is “clean” technology. Technologies and solutions which relate to solar, oil and gas, and batteries. This has been a very hot area for the last few years as well. Add that to high technology and we span a pretty broad spectrum of innovation and investment.
CEOCFO: Is there a target user of your services? How do they find out about you?
Mr. Aronoff: IP Professionals involved in information technology and commerce know us well. Also, those who are active as global leading technology companies, anything from an Apple to a Google, Samsung, Verizon, ATT, Time Warner, you name it, go down the list and look at North America, South America, Asia, Europe; there is a whole ecosystem of law firms as well as active buyers and sellers, companies as well as financial investors. We are very well known in that ecosystem already because we have been there from the beginning over the last decade plus as it has grown from a mostly US-centric marketplace of sorts with limited liquidity into a true global marketplace that is becoming more and more liquid day by day. Of course, on top of that people find out about us by word of mouth. We are prominent in industry specific conferences and trade shows, publications and periodicals. We write, we speak, and we travel and so on. In terms of who uses our services, it is a broad range of people. It could be asset owners ranging from independent inventors in small companies up the chain to individual investors, Venture Capital, and Private Equity firms; it could be active owners who acquire the right out of liquidations and bankruptcies. We deal with trustees, creditors, debtors, all the way up through midsize and into the multinational companies. For example, companies like Verizon and ATT have used us for years to sell portfolios of their Intellectual Property. Then of course, there are people who are seeking returns who specialize in enforcement, so there are many non-practicing entities that know us very well through our enforcement and licensing entities. There are financial investors of all ilk’s who are wanting more and more to add investments into portfolio; whether they be smaller number which are highly enforced, or larger numbers which are more targeted for licensing programs, they know us very well. We work to make sure that we stay in front of all of these entities; both as potential sellers of assets to them and advisors. We can help them evaluate assets, we can help them value assets, we can connect them to other entities in the world to help transactions come together globally.
CEOCFO: Are you looking to increase business in areas that are not related to patents? Do you see a big difference between a patent and a trademark, or maybe some of the other non-patent intellectual properties that you might be looking at?
Mr. Aronoff: Patents are unique in so far as they are rights which provide unique leverage and potential for disruption across a broad spectrum of products and solutions. We do some brand transactions. There are some very interesting, unique brands which people want to sell and others want to buy. But brand rights are also not typically as broadly disruptive and leverage-able as patent rights. Copyrights are something that is also considered intellectual property, but we do not transact in that area currently. Perhaps in the future, but today our focus is, number one, patents; and number two, highly unique and differentiated brands, specifically the “highest value” brands. That is where we are focused.
CEOCFO: What is an example of one of the more difficult patents to evaluate? What are some of the more challenging that you have worked on, or patents that you have worked with?
Mr. Aronoff: Patents are challenging when they are “difficult to value” or “futures oriented”. That is because what you have to assess the various directions the market could go and handicap how that technology or solution really might be implemented. Therefore, it is much easier to evaluate a patent which reads on things as they are today for things that relate to important, high volume standards; communications standards, connectivity standards, something that all the manufacturers have agreed to embrace and you can project will be out there in hundreds of millions of not billions upon billions of units. You can just look at the standard and compare your patents with standards and analyze it that way. When you a deal with things which are “futures” which may or may not be home grown and may or may not be things which are embraced or, perhaps they are simply the interim solution which really never gains traction, it gets trickier of course. Something better almost always comes along. Technology innovates quite quickly. When you are dealing with things which are futures you do not know whether or not they are going to be the winning solution or even the winning way of doing things. Those are the hardest ones to try to transact, but also, offer tremendous value and ROI for those who are savvy enough to aggregate these future solution possibilities.
CEOCFO: How is business these days?
Mr. Aronoff: Business is brisk. Business is also ever-changing. We have many opportunities to look at and we try to be very selective in the ones that we take on. We have a high touch, high value add business model. It is because intellectual properties require that; especially the high value ones require someone to really invest in understanding them deeply, and communicate that through the marketplace. We have adopted a very high value add, very high touch business model. That means that we have to invest appropriately to select what we know or what we believe based on our experience, going into the engagement, are the likely winners. The ones that we think we can be successful in and we think will be considered to be of higher value in the market than others. We place a strong emphasis on diligence in selecting what we think are the winning assets which are coupled with sane and reasonable customers and then working to analyze and create the transactions that are being sought out there in the marketplace.
CEOCFO: Why should investors and people in the business community be paying attention to Pluritas today?
intellectual property and patents, the value of intangibles and how they can
be used for strategic leverage or disruption. We are in effect in the
perfect position as the deal-source and opportunity diligence that surfaces
valuable opportunities for investors and corporations alike to embrace. We
are able to help them assess what kind of value they should have on the
balance sheet, and how to unlock that value and create liquidity for
operating capital or profitability. More frequently, we are being asked to
devise, analyze and assist companies, from small to large, in unlocking the
hidden value of their intellectual property assets. This is a major
opportunity for companies going forward; particularly when companies hit
more challenging times and are looking for the means to move forward or the
capital to, Intellectual property presents a whole new frontier of
opportunity and we are square in the middle of advising and assisting
companies in taking advantage of the opportunities it presents.
“We understand intellectual property and patents, the value of intangibles and how they can be used for strategic leverage or disruption. We are able to help them assess what kind of value they should have on the balance sheet, and how to unlock that value and create liquidity for operating capital or profitability. Intellectual property presents a whole new frontier of opportunity and we are square in the middle of advising and assisting companies in taking advantage of the opportunities it presents.”- Robert Aronoff, Managing Partner, Pluritas
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