Five Landmark IP Deals Receive LES' Prestigious 2012 Deals of Distinction™ Awards
Tuesday, October 16, 2012
Winners include AOL, Microsoft, Facebook, NIH, ConocoPhillips, Sabine Pass Liquefaction, Eli Lilly, University of Illinois Chicago, Gilead Sciences, Boehringer Ingelheim and others
TORONTO, CA, October 16, 2012—A gigantic patent deal by AOL, Microsoft and Facebook was one of five extraordinary intellectual property licensing deals that received Licensing Executives Society, (U.S.A. and Canada) 2012 Deals of Distinction™ Awards during the Society's Annual Meeting today.
Now in their 8th year, the awards are presented annuallyto companies that orchestrate the most outstanding IP-based licensing and business deals in five industry sectors including: High Technology; Chemicals/ Energy/ Environment and Materials; Industry-University-Government Interface; Life Sciences; and Consumer Products. Here are details on the winning deals:
High Technology Sector Winner
AOL, Microsoft and Facebook
The 2012 Deal of Distinction™ Award for the High Technology Sector was presented to three of the world's biggest technology titans – AOL, Microsoft and Facebook – for a groundbreaking deal that encompassed a complex series of patent transactions.
On April 9th, AOL (AOL) sold over 800 of its patents and their related patent applications to Microsoft (MSFT) and granted them a non-exclusive license to its retained patent portfolio in a $1.056 billion cash deal. Soon after, on April 23rd, Facebook announced it would buy 650 of these patents from Microsoft for $550 million, leaving the company with 275 of the originally purchased AOL patents.
The deal is highly advantageous for all involved, but for different reasons. The transaction allowed AOL to unlock significant value for its shareholders enabling the company to continue to aggressively execute on its strategy to create long-term shareholder value, while maintaining a valuable patent portfolio. Microsoft and Facebook, meanwhile, received some of the world's earliest web-related patents – providing important legal protection and ensuring that those patents did not fall into unfriendly hands. The acquisition also allowed Facebook to significantly bolster its patent portfolio at an important time in the company's development.
"This is a great example of an IP license transaction akin to some legendary chess moves," said Bob Held, 2012 High Tech Sector Deals of Distinction Coordinator. "The strategic benefits to all three parties far exceeded the monetary component."
Chemicals, Energy, Environment and Materials Sector Winner
Sabine Pass Liquefaction, LLC and ConocoPhillips Company
The Chemicals, Energy, Environment and Materials (CEEM) Sector's 2012 Deals of Distinction™ Award was presented to Sabine Pass Liquefaction and ConocoPhillips. The award was in recognition of a technology agreement that will allow for the practice of ConocoPhillips Optimized Cascade® Process for natural gas liquefaction in two liquefaction trains. The trains will have a combined capacity of nominal 9.0 mtpa and will be located in Cameron Parish, Louisiana as part of the Sabine Pass LNG Project.
"This is the first world-scale natural gas liquefaction facility to be built in North America in more than 40 years." said CEEM Deals of Distinction Chair Anne Culotta. "The two companies worked closely to ensure that the proprietary aspect of the technology was maintained while successfully obtaining the necessary government approvals and project financing for this $4.5-5 billion dollar natural gas export project."
The technology is premised on the process used in the only other world-scale natural gas liquefaction plant in North America, the Kenai Alaska LNG facility, which was designed by Phillips Petroleum Company (now ConocoPhillips Company) and has been in operation since 1969. The technology is currently being used in 10 liquefaction trains located in Alaska, Trinidad, Egypt, Equatorial Guinea, Australia and Angola. An additional 10 trains are under construction in the United States and Australia.
Optimized Cascade is a registered trademark of ConocoPhillips Company in certain countries including the United States.
Industry-University-Government Interface Sector Winner
National Institutes of Health, University of Illinois at Chicago, Gilead Sciences, and the Medicines Patent Pool
The 2012 Deals of Distinction™ Award in the Industry-University-Government Interface Sector (IUGI) was presented to National Institutes of Health (NIH), University of Illinois at Chicago (UIC), Gilead Sciences (Gilead), and the Medicines Patent Pool, a newly established initiative of UNITAID, an international organization established for the purchase of drugs against HIV/AIDS, Malaria, and Tuberculosis.
The Medicines Patent Pool, established by UNITAID in July 2010, is the first of its kind for HIV medicines. The primary objective of the Medicines Patent Pool is to improve access to affordable, appropriate HIV medicines in developing countries through the voluntary licensing of critical intellectual property from pharmaceutical companies. By streamlining licensing processes for the production of generic versions of patented HIV medicines for distribution and sale in the developing world, the Pool aims to serve as a one-stop shop that will speed up the pace at which newer medicines reach patients, and will help bring prices down by encouraging competition among multiple producers. It will also spur innovation, helping to facilitate the development of needed new HIV medicine formulations for children and of ‘fixed-dose combinations' that combine several medicines into one pill, thereby simplifying treatment for patients.
NIH and Gilead are the first licensors to join the Pool and will pave the way for additional public and private patent holders to help improve the availability of medicines in developing countries.
The patents licensed by NIH/UIC relate to the protease inhibitor class of HIV medicines, which are used to treat drug-resistant HIV infection or patients with high viral loads, as best exemplified to date by the drug darunavir.
The license agreement between Gilead and the Pool in July 2011 includes patents covering two backbone HIV treatments (disoproxil fumarate and emtricitabine) together with future rights to patents covering elvitegravir, an investigational integrase inhibitor; cobicistat, an investigational antiretroviral boosting agent; and Stribild™, which combines tenofovir, emtricitabine, cobicistat and elitegravir in a once-daily, single-tablet regimen. Stribild has since been approved by the FDA in August 2012, and was previously referred to as "Quad."
"The IUGI Sector is pleased to recognize this model partnership between the NIH, UIC, Gilead Sciences and the Medicines Pool. This is truly an innovative endeavor in facilitating access to HIV treatment in developing countries. It showcases the success of public-private partnerships to improve availability of medicine," said IUGI Sector Chair Ida Shum. "Many thanks to our Deals of Distinction Committee members Vasu Pestonjamasp, Thierry Musy-Verdel and John McEntire."
Life Sciences Sector Winner
Eli Lilly and Boehringer Ingelheim Strategic Alliance
The global population of people with diabetes is expected to explode from the current level of 366 million to 600 million by 2030. Never has there been a more urgent need for new solutions to address the diverse requirements of people with diabetes. The Life Science Sector honored Eli Lilly and Company (Lilly) and Boehringer Ingelheim with the 2012 Deals of Distinction™ Award for their efforts to combine their substantial scientific expertise and business capabilities to deliver solutions by jointly developing and commercializing four new promising medicines in diabetes care by 2016. Through the alliance, Lilly is building its presence in the fast-growing market for oral agents to treat diabetes, while Boehringer Ingelheim will gain access to the insulin market.
The deal is unique not only because of its value, but also because of its creative structure, which merges pipelines from two companies allowing both to maximize their development and commercialization resources. The alliance molecules include two oral treatments, the DPP-4 inhibitor Linagliptin and the SGLT2 inhibitor Empagliflozin, contributed by Boehringer Ingelheim and two insulin basal analogues, LY2605541 and LY2963016, contributed by Lilly.
"The Boehringer Ingelheim-Lilly deal structure creates a remarkably impressive strategic alliance with bold risk-sharing and outstanding upside potential unique to the industry. The alliance has been engineered to boost both companies' presence in a highly competitive market while meeting the complex needs of a large and growing global patient population," said Life Science Sector Chair Joseph Dillon. The deal also makes both companies more efficient in the competitive diabetes-care marketplace.
Consumer Products Sector Winner
McNeil-PPC Inc. and Insight Pharmaceuticals LLC
The Consumer Products Sector presented its 2012 Deals of Distinction™ Award to McNeil-PPC Inc. and Insight Pharmaceutical for their asset purchase agreement and associated licensing.
In August 2011, Insight Pharmaceutical, a portfolio company of Swander Pace Capital, acquired the MONISTAT® North American brand portfolio from McNEIL-PCC, Inc. MONISTAT®, the leading brand in the vaginal antifungal category, joined Insight Pharmaceutical's family of over-the-counter (OTC) women's health and personal care products, including brands such as e.p.t®, Nix®, Bonnie®, and Sucrets®. The MONISTAT® brand was the first prescription product launched in the vaginal antifungal class in 1974 and established a category, switching to OTC status in 1991. The acquisition signals Insight's increased dedication to the category of women's health.
Also, in connection with the transaction, Ontario Teachers' Pension Plan, through its private equity group Teachers' Private Capital, has joined Swander Pace Capital as an equity investor in Insight Pharmaceuticals.
"We felt this deal was exceptional because it was transformational for Insight given its size," said Consumer Product Sector Deals of Distinction Chair Susan B. Levy. "This was a multifaceted transaction that included intricate trademark, patent and know-how licensing, as well as regulatory and financing complexities."
About the LES Deals of Distinction™ Awards Program
Started in 2005, the LES Deals of Distinction™ Awards Program recognizes worthy transactions involving licensing and transfer of intellectual property and promotes creative and innovative solutions to business and licensing issues involving contracts. Nominations with the support of a LES member are considered and, with input from that industry, recommended by the LES Deals of Distinction™ Awards Committee and ratified by the LES Executive Committee. The criteria for the 2012 awards included distinctive deals in structure or objective, consummated in the 2011-2012 time period with at least one party having a presence in the U.S.A. and Canada. The physical award is hand-sculpted glass by the artisans of Parris-Roché Design Studios, consisting of a pair of entwined blue glass ribbons encased in a clear conic pinnacle, symbolic of parties coming together and obtaining superior results through collaboration. The awards were announced in connection with the LES Annual Meeting in Toronto, Ontario, Canada, held October 14-17, 2012, which included participation of nearly 1,000 licensing executives.
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About the Licensing Executives Society (U.S.A. and Canada), Inc.
Established in 1965, the Licensing Executives Society (U.S.A. and Canada), Inc. (LES) is a professional society comprised of over 4,500 members engaged in the transfer, use, development and marketing of intellectual property. The LES membership includes a wide range of professionals, including business executives, lawyers, licensing consultants, engineers, academicians, scientists and government officials. Many large corporations, professional firms, and universities comprise the Society's membership. Licensing Executives Society (U.S.A. & Canada), Inc. is a member society of the Licensing Executives Society International, Inc. (LESI), with a worldwide membership of more than 10,000 members in 32 national societies, representing over 90 countries. For more information on LES, see www.lesusacanada.org.