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When Yahoo! Inc. sought out an alliance with eBay Inc. last spring, Joseph Siino nabbed a coveted U.S. ad partnership � and an edge over its biggest competitor, Google Inc. Several months before that, Siino negotiated an IP rights agreement with Alibaba.com Corporation, China’s leading Internet business � gaining Yahoo a competitive advantage in the world’s second-largest Internet community. And last year, when Yahoo settled an infringement case concerning patents at the core of its search business, Siino brokered a deal that vindicated the company’s claim to technology that he says is “one of the key forces driving profits on the Internet today.” Siino (pronounced “see-no”) is vice president of intellectual property at Sunnyvale, California � based Yahoo, a business that spawns IP at the rate of a fast-moving virus. Since its 1996 IPO, Yahoo has evolved from a basic Web portal into one of the world’s busiest online destinations, with 500 million unique users a month, and nearly 30 percent of the market share in Internet search. In a race against Google, Microsoft Corporation, and America Online Inc., Yahoo hosts everything from music and finance sites to social networking and personal ads. While search-based advertising and marketing accounts for 88 percent of Yahoo’s $1.6 billion revenue, much of the company’s current $40 billion market value derives from intangible assets. These include a brand name that’s been pegged at $6 billion; relationships with some 100,000 advertisers; and license agreements with content providers through which Yahoo disseminates news, entertainment, games, and more. It’s all IP. And in an era when traditional media outlets are being supplanted by the Internet and new technologies (revenues from online gaming have eclipsed gross box office receipts for two years running), many established practices for assigning IP rights to content are being rendered obsolete. Against this backdrop, in late 2004, Yahoo senior management, including cofounder Jerry Yang and general counsel Michael Callahan, began talks with Siino, an IP strategist and lawyer. According to a Yahoo spokesperson, the company had been considering an IP management overhaul for many months. By the time Yahoo sought out Siino, management had agreed to create a new senior-level position: VP � IP. “They offered the opportunity to create a new business unit that would be the stakeholder for IP,” recalls Siino, who joined Yahoo in February 2005. “They recognized that dealing with IP is really a strategic business issue of enormous importance for the next wave of growth in the Internet.” Lawyers and businesspeople who have worked with Siino say that the Yahoo job was perfectly tailored for his skill set. Trained at an IP boutique that has since dissolved, Siino started advising companies on IP strategy in the early nineties. That’s when Ronald Laurie recruited Siino to join him at McCutchen, Doyle, Brown & Enersen (now Bingham McCutchen). In 1997 James Elacqua persuaded Siino to jump to Brobeck, Phleger & Harrison. There, Elacqua recalls, Siino climbed a steep learning curve, working with dozens of early-stage and public companies on building and protecting IP portfolios. By the year 2000, Siino was developing IP valuation models to boost sale prices for otherwise failed dot-coms. In April 2002 Siino started his own IP � centric law practice, and two years after that, he cofounded, with Laurie, Inflexion Point, where he lined up strategic IP investments for online media and technology companies and venture capitalists. “All of that experience made him the perfect choice for the job,” says Elacqua, now at Dechert. Befitting a company that prides itself on innovation, the IP management team that Siino has put together at Yahoo doesn’t fit squarely within one box on the organizational grid. While it is technically within the legal department, Siino prefers the term “entwined.” And in interviews (at which Yahoo corporate communications personnel sit in to ensure that he doesn’t step out of bounds), Siino insists that he and the other seven members of his IP asset management executive team function as an independent unit that takes direction from, and answers to, all of Yahoo’s senior managers � not just the GC. “There is a line of leadership through [GC] Callahan, which is very important for purposes of preserving privilege,” Siino says. But in the next breath he reiterates that he deals directly with senior executives on the business side, too. “Because IP is so interdisciplinary, where you place it within an organization is a little bit tricky. [But] no matter where you put the group, the most important thing is that it be vested with responsibility to represent and manage IP for the whole company. It can’t be some after-the-fact kind of review group,” he says. “To leverage the value of your IP assets, you have to make sure that your IP group is following the business plan of the company.” Toward that end, Siino suggested to Yahoo that it create a so-called IP board of directors. In this venue, Siino sits alongside Yahoo’s chief technology officer, chief data officer, GC Callahan, and others. The board meets monthly, affording Siino an opportunity to assess how his IP strategy squares with senior management’s overall vision. The board also serves as a vehicle to “spread the IP gospel through the company,” Siino says. Siino has structured his IP operation as a kind of umbrella that covers all of Yahoo. The IP specialists that form his management team � a mix of lawyers, technologists, and businesspeople � oversee subsidiary groups in five areas: patents, research, litigation and conflict management, transactions, and trademark and brand issues. Adhering to a corporate policy, he won’t disclose how many work in his IP operation, saying only that it’s “in the double digits.” Clearly, there’s plenty of work to go around, and all five groups collaborate. Practically every IP suit and transaction turns up brand and trademark issues, for instance. Nor is there one specific group designated to handle licensing, which Siino says he and his management team funnel through Yahoo’s finance experts. “We all work very closely,” says Duane Valz, associate general counsel � patent asset development, whom Siino recruited to Yahoo from Quantum Incorporated. Part of Valz’s job involves what he calls “invention harvesting.” His mission: to find the most promising, patentable inventions that fit into Yahoo’s big-picture strategy. For example, Valz’s patent asset development group has recently harvested a video remix technology that debuted at this year’s San Francisco film festival, and a prototype product (called ZoneTag) for cataloging cell phone photos and transferring the images to other devices. Valz and his patent asset development group consult regularly with Yahoo’s research division and with technology experts working with Yahoo through a partnership with the University of California. And in a Yahoo-sponsored lab near the Berkeley campus, Siino and Valz say that they’ve given those researchers confidential access to ongoing innovations inside the company. That’s proof of how Yahoo “is trying to be flexible about how we use our IP,” Siino says. Valz also oversees a group of lawyers monitoring patent prosecution by outside firms. According to recent patent applications, those firms include Darby & Darby, Greenberg Traurig, Morrison & Foerster, and Townsend and Townsend and Crew. Valz and Siino say that internally, Yahoo’s patent asset management group has grown rapidly to keep pace with an exponential increase in patent filings in the past two years. (As of late August, Patent and Trademark Office data showed Yahoo as the named applicant on 108 filings since 2001.) Although he won’t provide concrete numbers, Siino asserts that Yahoo already holds “hundreds” of patents. Indeed, in 2003, after Yahoo paid $1.5 billion for Overture Services, Inc. (now a subsidiary) and $235 million for Inktomi, Inc., CNET.com and other business publications reported that Yahoo had acquired a “storehouse” and “a treasure chest” of patents. Many of those patents covered original Internet search technologies, notably for pay-per-click advertising. The PTO also shows Yahoo holding another stack of patents � from “processing unsolicited bulk e-mail” to “transmission of multicast media between networks.” Indeed, even as Yahoo seeks to stave off Google in the search arena, the real rush right now is to gain IP rights in the content business. “There’s an incalculable amount of patents that haven’t issued yet, surrounding content creation and content distribution,” Siino says, looking ahead. “In terms of content, our portfolio is a little younger. We think that’s a core area to cultivate.” In the 22 months that Siino has been on board, he’s made a point of playing a hands-on role in high-profile IP transactions, garnering exclusive IP rights in specific market segments. Such deals shore up Yahoo against competition, and help boost brand value. According to the 2006 Interbrand BusinessWeek survey released in August, Yahoo’s is perhaps the most “resilient brand” on the Net, but nonetheless ranked fifty-sixth, well behind Google, which placed twenty-fourth. Wall Street analysts viewed the recent partnership with eBay as a coup for Yahoo, as it edged out Google to become eBay’s exclusive supplier of graphical advertising in the United States. (Google subsequently gained text ad rights abroad. Through a spokesperson, eBay declined to comment on either alliance.) In Yahoo’s joint venture in China, through which Yahoo has acquired a 35 percent ownership stake in Alibaba.com, “the key folks negotiating the deal were the IP team,” says Siino. Granted, in all such transactions, Siino’s IP specialists work closely with others at Yahoo, including the corporate development team and the legal department, as well as outside corporate counsel. (In the Alibaba.com deal, Yahoo was represented by the Palo Alto office of Skadden, Arps, Slate, Meagher & Flom, among others. Alibaba’s chief outside counsel was New York’s Debevoise & Plimpton.) But in the eBay and Alibaba negotiations, Siino personally represented Yahoo in defining how the parties will share and use technology, as well as how they will manage development and ownership of content. “[These are] the areas that we negotiate in any joint venture relationship,” he says. “It’s like structuring an extremely complex marriage.” Yahoo’s so-called IP litigation and conflict management team overlaps with the transactions group by scouring partnership and other agreements for risky, “conflict-prone IP terms or expectations,” Siino says. This group, led by former Wilson Sonsini Goodrich & Rosati lawyer Lisa McFall, also coordinates with Yahoo’s labor and human resources counsel to stay on top of IP issues involving incoming and outgoing employees. The aim: to stay out of court. On the litigation front, Siino says that he and McFall’s group have an eye on everything that’s IP � related. Working alongside Yahoo associate general counsel Reggie Davis, who’s in charge of commercial litigation companywide, the group assumes a hands-on role in cases where IP rights are central to the claims. Last year, for example, Siino joined outside counsel from Morrison & Foerster and Heller Ehrman to settle a patent case that Yahoo had lodged against online marketer Miva, Inc. Miva agreed to pay Yahoo $8 million, plus licensing fees going forward. At the time, Siino also seized on press coverage of the resolution as a chance to trumpet Yahoo’s technology, telling reporters that the patents � acquired in its buyout of Overture � had been “battle-tested” in two litigations (a similar dispute between Yahoo and Google ended in an enormous settlement payment to Yahoo in 2004), and inviting other would-be licensees to the table. Licensing is, however, a small part of Siino’s IP strategy. He’s much less interested in obtaining incremental gains from licensing than he is in building the value of Yahoo’s IP � the company’s “crown jewels,” he says � through brand-building as well as patents, copyright, and trade secret protections: “IP assets have value themselves, as capital.” To prove his point, Siino and some of Yahoo’s finance experts have drawn up models showing how the value of Yahoo’s brand, combined with exclusive rights to technology and other IP, can yield higher profit margins and increase shareholder value. It’s heady stuff. And Siino can’t seem to get enough. “Yahoo happens to be one of a handful of companies at the incredible convergence between media companies and technology companies, between Hollywood and Silicon Valley,” he says. “From my point of view, it’s the most interesting place in the world to manage IP.” This article originally appeared in Corporate Counsel’s sibling publication IP Law & Business.

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