Dr. Heiner Pollert holds a doctorate in intellectual property law and is an expert in innovation management. In 1998, he founded the Patentpool Group, where he is still CEO. He is also the first chairman of the German Institute for Inventions, which has been awarding the Rudolf Diesel Medal, Europe’s oldest innovation prize, for almost 70 years. In this interview with TechBullion, Dr. Heiner will be telling us more about Patentpool Group.
What is the Patentpool Group and how did you come up with the concept?
With the Patentpool Group, we’ve been accelerating innovation in a wide variety of future industries for some 25 years now. About 3,000 ideas and projects a year get our scrutinizing eye. We work extensively with universities as well as the aforementioned German Institute for Inventions to filter out less viable prospects and end up with the right start-ups.
We are, I can say with confidence, efficient managers of patentable technologies. Through capital input, know-how, and a broad network, we transform innovations into marketable technologies and products. Our company history stretches back more than 20 years. Over such a length of time, as you can imagine, we’ve learned what innovations need to become successful. Patentpool acts as an interface to advance projects in the value chain.
Whose brainchild was this?
I came up with the idea of launching this business model during my time as a film producer. At the time, I was passionate about developing TV formats, and it happened to me quite often that large production companies and broadcasters simply implemented these same ideas after seeing our presentation without my colleagues and me – and without paying us for it. TV formats are only protected by copyright, and this is, unfortunately, both easy to circumvent and difficult to enforce. So I came to the conclusion that patents, on the other hand, are as solid as the Rock of Gibraltar and flush large amounts into their applicants’ coffers if someone violates them. That motivated me to change industries. Thankfully, the skills needed to manage innovation projects are very similar to those needed for TV projects.
Could you give us a breakdown of the services you provide at Patentpool Group? Who qualifies for your services, and how do they work?
We see ourselves as a kind of hybrid – something between early-stage investors and company builders. Ideally, we participate in basic technologies in the early phase, i.e., as shareholders. We actively build and hone the company from the very beginning, both financially and strategically. We draw up a business plan, set up a corporation together, and, in the course of development, apply for comprehensive industrial property rights, especially patents, around the technology. Simultaneously, we operate the “start-up” and, as managers, actively take care of all business management tasks, such as financing, controlling, marketing, sales, and networking.
You support a number of start-ups… can you give us some specific examples and walk us through how you work with them from start to finish?
Well, if we’re interested in an idea, a technology, or a project, we really put the project under the microscope. If we see a promising risk profile, we suggest to the innovation provider that they found a company in partnership with us. From this point on, in most cases, we take over the operational management and commercial work – in contrast to many venture capital companies. In this way, however, our new partner can fully concentrate on innovation and its development, i.e., driving the idea forward. Beyond overseeing patent grants, more is in our hands: capital raising, know-how, networking, business, legal and organizational issues, all of this. Our specific services also contribute to these points. This covers the range from business plan creation, plan-safe financing through controlling, knowledge transfer, and PR/marketing up to professional personnel selection/HR.
We have a roadmap that follows a nine-point plan. This provides maximum security in a risky market. It starts with visionary sourcing, underpinned by a meticulous due diligence process, and leads to a project pipeline with promising innovations. When things go as desired, a successful exit takes place after a few years – point nine of the plan.
Which industries and what type of products do you work with at Patentpool Group? What trends should we expect from the patent industry this 2022 and beyond? I’m sure there are stories you’d like to share with us from your portfolio of projects so far.
Yes, certainly. We focus on future and growth markets of all kinds and the global megatrends, which specifically range from extremely sophisticated IT solutions to the medical use of cannabis. Always with an eye to patent protectability. Ideally, each of these companies has a convincing opportunity-risk profile, high scalability, and a recognizable technological edge over the competition.
Could we hear about some specific examples?
Sure. Here are four examples of companies you can get a stake in via our newly launched HICP fund. Let’s start with Aircoating Technologies. Aircoating is a surface-coating process developed on the model of nature, namely the water-repellent floating fern “salvinia molesta”. The coating reduces the frictional resistance of ships in the water, for example, in turn reducing energy consumption and emissions enormously.
Then we have Arcware. The Arcware 3D cloud platform enables interactive, real-time, 3D application delivery on all current and future devices. This opens up new avenues, an almost endless vista of possibilities in immersive web design – the front-end of the future, so to speak.
FrontNow in turn was founded with the aim of supporting consumer goods producers in selling their products in the trade – while enabling retailers to offer the right products to local customers. As a SaaS solution, AI systems and technologies provide recommendations for action and future predictions for retailers and producers. Retail and wholesale trade are connected here on one platform.
Then we have Prisma Analytics, one of our hottest candidates. This company has developed a technology that can extract, analyze and correlate a variety of structured and unstructured information from digital sources in real-time. This is big data management at its best and is mainly used for financial information, one of Prisma Analytics’ major branches.
Recently, your target company Zoe won a legal dispute with Microsoft in Germany. According to what I’ve read, cloud technology was invented in Germany, and Microsoft has used it illegally since then. Can you shed more light on this? What’s the real story here, and what does this mean, ultimately?
At the end of the 1990s, the Patentpool Group, the force behind Zoe Life Technologies AG, was working together with the US computer scientist and IT system architect Hardy Schloer. We seized on his technological visions, visions he had previously pursued under the project name “Tosca”. The aim was to implement his “Dynamic IT System Architecture” and his Internet concepts, considered revolutionary at that time. An application for a European patent for this was filed in 1999 and granted in 2006 for Germany and Great Britain. Here’s the patent policy: the innovation is so complex and radical that not all ideas involved could be secured. The focus was on a so-called gatekeeper function. It essentially only protected the single central and vital component that anyone who creates dynamic web content violates.
RavenPack becomes part of the story somewhere along the line….
Yes, you’re right. Starting in 2000, RavenPack AG, founded jointly by Patentpool and Schloer and financed with investor capital, began marketing the technology underlying this patent in various fields of application. Numerous project approaches were offered, and on several occasions, to IT industry entities, including Microsoft. As is so often the case with groundbreaking innovations, the “C-suite”, those responsible in the executive floors and development departments of the companies addressed, refused to cooperate. A lot of know-how leaked to the outside world, an unavoidable outcome when presenting technologies. In the end, it’s the gatekeeper patent that protects against imitators.
Initially, the project proposals languished in the companies’ drawers and files. Despite several scientific publications on Schloer technology, only a few experts examined the potential behind this novel way of handling data. For this reason, RavenPack concentrated in the following years on developing its own application of the technology, which was as lucrative as possible, and on using it entrepreneurially. Thus was born the world market leader for news analysis in the financial industry: RavenPack.
Where exactly does Microsoft figure in the continuing story?
After the completion of the RavenPack system, programmers migrated to other companies, and the patent-protected know-how continued to spread. It wasn’t until 2012, after the term “cloud computing” had become known and Microsoft had presented its new user platform Azure to the public, that third parties also became aware of how far that very same intellectual property, submitted for patent in 2000, had come. What was patented in 2000 under the title “Method and Device to present Data to a User” and “One-Page Web” is now considered a central and fundamentally necessary component of cloud computing.
Finally, on 7 October 2021, the Federal Court of Justice in Karlsruhe handed down its decision: our subsidiary Zoe Life Technologies AG won, in its entirety, its action for annulment X 98/19 against Microsoft Deutschland GmbH. Thus, the high courts ruled that the patent challenged by Microsoft Deutschland GmbH is valid in Germany to the extent granted. The next step will be to settle the amount of compensation – in court or out of court.
It all seems, to put it mildly, daunting. Microsoft isn’t exactly your garden-variety adversary…
True. Zoe’s legal team is however experienced in international infringement proceedings and has already collected hundreds of millions of euros for international clients in past proceedings against IT and other technology companies. In the Tosca Project, Zoe could also see to it that Microsoft Deutschland GmbH is now confronted with patent infringement.
What does this mean in real terms for Microsoft?
Due to the high courts’ confirmation of the patent, Microsoft will have to think about the advantages of an amicable settlement. Should we win, Microsoft will be threatened with considerable costs. Claims can be asserted retroactively for a period of up to ten years.
You have to consider that this groundbreaking basic technology protected by the confirmed patent made various concepts of the early Internet as well as today’s cloud computing possible in the first place. These aspects include secure data communication as well as the server-side creation of web pages. One example: the technology is used in transaction and sentiment analysis, also called opinion mining. Another example is security-relevant software. The basic technology has been used illegally and free of charge by numerous international companies for years, including Amazon, Apple, Google, IBM, Cisco, Huawei, and Siemens.
Incredible. Where do you go from here?
A further step planned is the launching of a broad-based licensing program that is specifically aimed at large international corporations. Another way to monetize the intellectual property right is to sell it to potential infringers or international collecting societies. When we started “The Tosca Project” about ten years ago, it was clear to us that a project of this magnitude would take time, especially if Microsoft chooses the “action for annulment” tactic common to patent infringements. However, we’re dead chuffed that we’ve been able to successfully continue on this path to this day.
Does this also have an impact on other countries, such as the UK?
Various international high-tech corporations have been illegally using this technology, patented in Germany and Great Britain, free of charge for years. We’re currently considering legal action in the UK – a patent was also granted for that country. We can expect a situation similar to that in Germany.
Do you have any available opportunities for investors, careers or partnerships at Patentpool Group?
Definitely, just about always! The most important resource for the management of innovation projects is capital – through the investment fund Hightech Value Pool, you can participate directly in the success of our projects. And our projects can only be successful with the right people and partners – if you like our attitude or think your company would be a suitable network partner, we’re eager to hear from you. Any and all looking for job openings or wanting to submit speculative applications are welcome via patentpool.de/karriere.
Do you have any information to add for our readers concerning the Patentpool Group?
Indeed I do. Recently, the Hightech Valuepool (HVP) was launched – an exciting investment vehicle. As the initiator of the fund, the Patentpool Group thus offers investors the potential of participating in the value creation of future technologies. The HVP fund clearly stands out next to other early-stage funds. At the root of this is our unique expertise as a company builder: we reduce investment risks by focusing on patent-protected technologies and then actively managing them. The fund is already invested in four fascinating high-tech companies: Arcware, Frontnow, Prisma Analytics, and Aircoating Technologies. The HVP fund combines the advantages of open-end and closed-end funds through tailor-made solutions for investors, all within the scope of an evergreen fund. Should a portfolio company exit, the fund distributes 50% of the proceeds to investors and reinvests 50% in the fund. Up to 200 million euros is designated as the size of the fund, the geographical focus is on Germany and Europe. For the time being, at least…