Source : Law 360 News
By : Press Release
Category : Bail Bond Sanford , Sanford Bail Bonds
Upcoming High Court Patent Decisions May Not Affect Stocks
The enterprise values of businesses with technology-rich products and processes are often tied to their patent portfolios. Last month, the U.S. Supreme Court heard oral arguments in the case of Apple Inc. v. Samsung Electronics Co. Ltd. concerning the recovery of an infringer’s profits for design patent infringement under 35 U.S.C. § 289. During the next several months, the court will also consider the case of Life Technologies Corp. v. Promega Corp., and decide if the extraterritorial reach of 35 U.S.C. § 271(f)(1) covers the export from the U.S. of just one component of multicomponent products. Legal reporters and financial analysts alike have asserted that these two decisions could have a “significant” and even a “massive” impact on U.S. businesses. There is no doubt that Supreme Court decisions can influence the enterprise values of U.S. businesses. However, our research shows that, although the Supreme Court has issued 15 opinions since 2006[1] that negatively influence patent rights and related values, the impact of these decisions on the stock prices of patent-rich companies is not readily apparent.
Next, we considered the relative influence of each decision in terms of the scope of legal issue(s) addressed, and the importance of the technology area(s) affected. Based on this criteria, we ranked from 1 to 4 each decision that positively influences patent values, and from -1 to -4 each decision that negatively influences patent values. The higher the absolute number of the ranking, the more influential the decision. As reflected in both Figure A and Figure B, 11 of the 23 decisions were assigned a ranking of -4, reflecting their negative impact on patent values, the broad legal issue(s) addressed, and the importance of the technology area(s) affected. We then analyzed the performances of the Ocean Tomo 300 (OT300) and the Standard & Poor 500 (S&P500) indices on the days these decisions were issued. The Ocean Tomo 300 (OT300) is a diversified portfolio of 300 companies that own the most valuable patents relative to their respective book values.[2] Figure A reflects the performance of the OT300 on the day the court issued 22 of the 23 patent-related decisions.[3] Positive numbers indicate that the index rose that day. Negative numbers indicate that the index declined that day. On only three days did the OT300 index decline when the court issued a negative-patent-value decision with an Ocean Tomo rank of -4. On six other days, the OT300 index actually rose.[4]
The S&P 500 is considered an accurate gauge of the performance of large-cap U.S. stocks, and is also considered representative of the market as a whole because it includes a significant portion of the total value of the market. The performance of the S&P 500 on the days the Supreme Court issued each of the 23 patent-related decisions was similar to the OT300, and is likewise reflected/ On only three days did the S&P 500 decline when the court issued a negative-patent-value decision with an Ocean Tomo rank of -4. The S&P 500 actually rose on seven of the days these relatively broad, negative-patent-value decisions were issued. On only five of the 15 days on which the Supreme Court issued a negative-patent-value decision (with any Ocean Tomo ranking) did the S&P 500 index decline. The influence of several of these decisions, such as Bilski v. Kappos, Alice v. CLS, and Cuozzo v. Lee, cannot objectively be viewed as somehow less influential than those of the impending Apple v. Samsung or Life Tech v. Promega. The previous decisions unquestionably addressed broad legal issues and affected important technology areas.
Read more : law360.com/articles/858311/upcoming-high-court-patent-decisions-may-not-affect-stocks
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