LES Standards

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American National Standards Institute (ANSI) Member

The Purposes of LES Standards

• Raise the standards of business conduct in IP-oriented transactions
• Improve the practice of IP management and, by doing so, mitigate its risks
• Reduce the cost and time required to do IP-oriented transactions and IP management
• Protect and preserve the value of IP for innovative individuals and enterprises
• Thereby encouraging investment in innovation and enhancing the economic well-being of society

The Motivation for LES Standards
Today, in North America and across the world, innovation is the principle source of differentiated and defensible advantage for operating companies. Innovation is the basis of advantaged products and services, and it drives sales and profits. It is the source of jobs. It is the engine of the economy. Yet the intricacies of the innovation economy are not well-understood by our political, financial, and business leaders.

For example, while intellectual property (IP) value makes up approximately 70 percent of the equity value of our publicly traded companies, the Generally Accepted Accounting Principles (GAAP)—the standards by which the U.S. Securities and Exchange Commission manages reporting by publicly traded companies—treat the accounting for intangible value almost as an incidental issue.

In addition, in business schools around the world, IP management is not treated seriously as a business subject. In fact, to the extent it is dealt with at all, IP is taught as a legal subject, not as the largest component of value in the modern corporation. IP valuation, the business processes employed in IP management, and IP strategy are barely touched upon.

No wonder IP and its value are nearly invisible to most of our business, financial, and political leaders. They have little if any instruction in it. There is little accounting for it. And very often, no one has business responsibility for its protection and management, outside of the attorneys.

The LES Standards Program is therefore conceived to develop and teach best practices in many aspects of IP management and, where appropriate, offer enterprises the opportunity to differentiate themselves based on their use of these best practices. LES Standards will be to IP management what ISO 9001 is to quality management.

LES Standards is conceived to offer a toolkit with which enterprises can improve the way they do IP transactions, protect their innovation, use IP in their business strategies, and manage third party IP.

Areas of Standards Development
The first five standards committees being established are the following, with the following standards areas being actively considered:

•  Licensing 
  • Ethical conduct in patent licensing
  • License templates
  • Patent assignment agreement templates
  • Stand-still agreement templates
  • Composition of claim charts

• IP Brokerage 
  • Ethical conduct in IP brokerage
  • IP brokerage agency agreement templates
  • Due diligence steps in
  • IP brokerage Service minimums in
  • IP brokerage

• IP Protection in Supply Chain 
  • IT security Physical security
  • Employee training
  • IP management maturity assessments
  • Audit Reporting

• IP Valuation 
  • The naked patent licensing context
  • Methodologies inside and outside of litigation
  • Naked patent sales
  • Patent value as part of a total IP package transaction
  • Patent value in the context of FRAND

• Intangible Assets in the Boardroom
  • Board involvement in IP risk mitigation
  • Board involvement in IP value creation 

The standards areas listed for each committee above are suggestions for consideration of the committees. It will be up to the committees to decide what areas they would like to work on (and in what order it would be best to work on them) to achieve the purposes of the LES Standards Program. It is important to keep in mind that all journeys begin with relatively small steps, and this will likely be the case with LES Standards development work. The earlier standards may be easier to develop consensus on than standards developed several years from now.

Will there be additional standards committees that we will want to establish over time? Yes, certainly. One broad area that comes to mind is IP valuation. There will be others.

The Cost of LES Standards Participation*
There will be an annual membership fee of $500 charged to each enterprise that participates in an LES Standards committee. For that flat fee, each enterprise may provide as many participants as it likes and may participate in as many committees as it likes. However, there will only be one representative from an enterprise empowered to vote on each committee's work.

The value proposition for companies considering an LES Standards Enterprise Membership is the following:

• LES Standards Enterprise Members will have a chance to help set LES’s standards strategies and to shape the draft standards themselves, thus ensuring that they have a voice at the table in the early stages
• By being involved early on, LES Standards Enterprise Members will have early insight into and a head start on implementation and compliance
• LES Standards Enterprise Members will be able to purchase copies of the published standards and will be able to register for LES standards training at deeper discounts than others

We are charging an LES Standards annual enterprise membership fee because we have to hire additional staff to support the work, to purchase software that we do not have, and to incur additional related costs. It is important to know that other standards development organizations (SDOs) have similar fee levels.

Please keep in mind that these fees enable an enterprise's named participants to participate in the LES Standards committees. Individuals wanting membership access to other LES resources (such as the royalty rate surveys, the compensation survey, the searchable LES library of meeting content going back many years, a searchable database of archived LES Nouvelles articles, the LES membership directory, and LES webinars) will need to take out an individual LES membership.

Conclusion

Until now, the IP management community—the community of experts in IP management—has not organized itself to speak with one voice in answer to urgent queries from around the world as to what should be done in the licensing of patents, what should be done in the selling of patents, what should be done from a business process perspective to protect other-party IP. It has not organized itself to develop and implement scenario-based standards of IP valuation, standards of enterprise conduct in IP transactions, IP agreement template standards, and so forth. This is a short-coming that we need to fix.

The IP management community needs to come together in an open, fair, and balanced way—under the rules of the American National Standards Institute (ANSI)—to answer those queries being made of the legislatures and courts around the world and of the IP management community in its current disarray. The IP management community will come together in the LES Standards Program to begin the process of answering these and many other urgent and important questions that politicians, judges, juries, business leaders, financial leaders, citizens, inventors, entrepreneurs, and enterprises of all kinds have been wrestling with for many years.

LES encourages all organizations and individuals who have a stake in the answers to participate in the LES Standards development process. LES is moving forward to set up a process in which everyone around the globe is welcome to participate, whether a governmental organization or agency, an educational institution, a consulting company, a law firm, a sole proprietor, a product company, a services company, or any other professional group.

We look forward to working together with you and your organization as we focus on the critical questions an IP-based world economy demands to have answered. And we promise that the very best minds in the IP management community will be enlisted to lead us to success in this significant task.

Click here to join the Standards initiative.
*Standards Enterprise Membership is NOT LES Membership. LES Membership can be purchased indvidually for $395. For information about LES Membership, please click here.

LES Standards Leadership