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The Legislation That Changed America, Bayh-Dole Act (part 1)

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As nations try to emerge from the most devastating global recession since the Second World War, policymakers, business communities, academia, and governments will be looking at ways to accelerate growth and competitiveness. Many at the right will continue their propositions that governments should be left out of business, while those at the left will emphasize that governments must play central roles in shaping commerce and industry.

The reality is that governments do matter and a single legislation could have impacts that can redesign a nation’s economic destiny. Globalization makes it so important that nations must compete not just on technologies, but on policies upon which those technologies are developed and commercialized.

This makes it possible that two universities in two separate nations can develop similar technologies with one creating Fortune 500 companies within a decade and another having the idea locked up in a cabinet. In other words, the policies or legislations made by congress or parliament on what happens to inventions supported by government funds matter.

In 1980, a United States legislation dealing with intellectual property emanating from federal government-funded research was implemented. The legislature called Bayh-Dole Act (after two Senators Birch Bayh of Indiana and Bob Dole of Kansas that sponsored it) or University and Small Business Patent Procedures Act gave US universities, small businesses and non-profits intellectual property rights and control of their inventions, even though they were funded by government.

Through this Act, universities, small businesses or non-profit organizations could pursue ownership of inventions in preference to the government.

What this means is that instead of sending the patents or inventions to the government agencies like National Science Foundation (NSF) or National Institute of Health for them to file away in their office cabinets, this Act empowers the inventing entity to pursue commercialization of the idea. Simply, the U.S government elects to fund an idea and allows the fund recipient to profit from any invention that comes from that idea.

This Act provides clarity on many issues that could derail the process of taking ideas to market, especially when those ideas were funded by US federal government. For professors, it provides incentives to pursue research both for discovery and for profit since they also could profit from their inventions. Just as their students could discover and commercialize, the university dons can also do the same.

It has been a new era as the number of Technology Transfer offices in the US universities has increased many folds. As schools file more patents, they continually look for opportunities for venture funds to commercialize or simply license their patents to other institutions. These days, schools quote the number of start-ups they have incubated as a metric to their competitiveness. They will tell you the stories of their students who graduated and founded firms and use that as selling points in their brochures. This is business right in the four walls of the universities.

initially published here.

Tekedia Analyzes Visafone Failed Acquisition of Multilinks – Connects Helios Investment Partners, Telkom and Helios Towers

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Helios Towers rents out towers so that telecommunication operators can provide network coverage and build. They do this largely in Africa with Nigeria as one of its big markets. Helios Towers is a division of a private equity firm founded by a Nigerian UK based Harvard graduate who also invested in First City Monument Bank before the crash. This company has quite a war chest under management. Tekedia recalls that the Helios founder received an award from Harvard African Business Club few years ago for their vision and execution. His name is Tope Lawani. Tekedia  confirms that Helios Investment Partners holds rights in Helios Towers.

 

In November 2009, Helios and a group of investors including Soros Strategic Partners LP, RIT Capital Partners plc and Lord Rothschild’s family interests, Albright Capital Management LLC committed US$350m to Helios Towers Africa Limited (“HTA”). HTA, a newly formed company will build and maintain telecommunications towers and lease space on those towers to wireless telecommunications services providers across Africa.  With the launch of HTA’s operations across Africa, operators will be able to outsource non-core activities and passive infrastructure, allowing them to focus capital and managerial resources on improving their core products and services. The deployment of HTA’s tower sites will increase telecommunications coverage, helping wireless operators roll out their services more economically and enabling the extension of affordable mobile services to semi-urban and rural areas. With the initial equity commitment, the financial flexibility of its shareholders, and the in-region operating experience of Helios Investment Partners, HTA anticipates establishing itself as the most experienced, operationally capable and best independent tower operator in Africa.

 

Visafone has expected to have a home run by acquiring Mutilinks so that it can compete better. Through customer service, Visafone has made progress in Nigeria and was looking for consolidation. But that has not worked out very well. Telkom South Africa and Helios Towers battled over lease agreement of the towers. That legal impasse might have resulted to the collapse of the acquisition as we reported this morning. Visafone’s takeover of MultiLinks is contingent on the settlement of the case with Helios Towers.

 

Helios Towers has filed the $252 million suit  against MultiLinks over an “anticipatory breach of contract” . And that was mainly to prevent Telkom from selling MultiLinks assets to Visafone.

 

Last year, Telkom stated that it was dis-investing from the Nigerian CMDA market because of of competition which has resulted to many loses. Multilinks was not making money in Nigeria and Telkom had invested in this company; it bought over the company in incremental acquisition. The CDMA player could not just compete with the GSM giants.

 

The true owners of Helio Towers, Helios Investment Partners which in London has played a major role throughout this process. An analyst told us that this private equity firm cannot sustain another major business loss when it bought FCMB shares in 2007 only for the market to crash. They had taken about 16% of the bank with investment of $50m investment. That also put Tope in the FCMB board.  So in December they filed a legal complaint against Telkom’s MultiLinks unit regarding the leasing of cell phone towers in Nigeria.

 

Multilinks challenged the validity of the agreement based on land where the towers had been built. But it was tossed out last week by a Lagos High Court. That was when the pendulum flipped against Telkom Africa. They began the plan to move out of the whole Multilinks plan.

 

Telkom South Africa has had tough times recently. Bloomberg reported that even meeting their estimates has been hard.

 

Telkom South Africa Ltd. (TKG SJ): Africa’s largest fixed- line telephone operator publishes earnings statements for the year ended March. The company expects to report a loss when compared with a restated profit of 8 billion rand ($1.2 billion) a year earlier, it said in a statement on May 31. That would be the company’s first loss since a 2003 initial public offering. The share lost 3 cents, or 0.1 percent, to 37.05 rand.

 

So this news has affected this moribund South African company. It simply shows that it is not automatic to succeed in Nigeria. We just checked the stock value of Telkom (TKG SJ) in the South Africa stock exchange and noticed a huge loss. With this continuous bad news, the company is indeed having a bad time.  The Lagos High Court ruling killed any prospect in the Visafone Multilinks deal going through. Now, they have to find time to disinvest and sell assets. Of course they can make somethings out of this since they have about 7,000 km fiber optic cable (FOC) and 2,000 km jointly shared with MTN and Glo.

NigComSat-1R Three Year Insuarnce Will Cost About N540m

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The insurance for the NigComSat 1R that will be launched later this year by NigComSat will cost around N540m. This figure covers the insurance for the first three years after launch, according to the office of the chief budget officer, Nigeria.

 

Of course, without insurance the possibility after the failure of NigComSat would not have been possible. So, we got this right and it is the right thing to also ensure the next one. Of course, no one is wishing for the satellite to fail.

 

There are many benefits associated with satellite operations and Nigeria cannot afford not to play a leading role there. Some of these benefits include:

  • efficient transportation  system in the sea and air
  • national security readiness. Of course, we must not be like Pakistan that was sleeping when Americans entered their country and took away Osama.
  • telecommunication. cheap and dead cheap broadband access
  • solid broadcasting operations

 

We still think that this new satellite must have some local contents. Even if it means to ask a local Nigerian company to cast the iron for its mounting. This process must be used to build capacity and nurture SMEs in the nation. Local content policy must be part of this business and Nigeria must insist that it happens. As NigComSat goes into the negotiation table, it must remember that it could help nurture small electronics  companies in the nation through small contracts. That way this will be win win for the nation.

 

Nigeria is learning and the tragedies of NigComSat 1 must not dampen the spirit of the nation and NigComSat. Rather, we must learn from it and get better. Satellites fail all the time. Some notable examples are:

 

– PanAmSat, 2004

– Intelsat, 2011

– Hotbird 3, 2006

– MTSAT 1R, 2006 (recoverred)

– Climate change monitor satellite, 2007?

 

So, we are not alone. We need to get this one right and good enough that it is going to be insured. Tekedia commends the team at NigComSat for getting quick to getting this new satellite after the initial failure.

 

[News Flash] Telkom Breaks The Visafone Acquisition of Multilinks

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Mobility Nigeria reports that the the litigation from Helios Towers insisting that Telkom honors its agreement to rent its cellphone towers for ten years has broken the acquisition of Multilinks by Visafone.

 

CyberSchuulNews reports that Telkom South Africa has said it will withdraw all funding from Multilinks in Nigeria since its attempt to sell the ailing firm to Visafone has been lost to litigation. Helios Towers had raised charges that the South African firm walked away from a ten-year rental agreement in nigeria after only three years.

 

Telkom bought 75% into multilinks for $280million in 2007 and paid up the balance of $130 million in 2009. The South African firm was unable to turn the fortunes of Multilinks around, and put it up for sale.

 

The Helios charge has ended Visafone’s move to acquire the ailing pioneer CDMA operator in Nigeria.

 

 

Microsoft Loses Nearly $300m Patent Case Over Word Tool

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Microsoft lost a battle to a small Canadian company on a patent.  It has lost its final appeal against a judgment ruling that it  pays a small Canadian company nearly $300m to settle a patent dispute.  The United States Supreme Court said Microsoft must pay following rulings by lower courts that it had infringed a patent on a technology linked to the Microsoft Word, a widely used  word-processing program.

 

Microsoft’s troubles with i4i extend back to August 2009, when the federal judge in the U.S. District Court in Eastern Texas ordered that all copies of Word 2003 and 2007 be removed from retail channels within 90 days. Microsoft’s attorneys managed to argue a delay, only to have the U.S. Court of Appeals uphold the verdict four months later.

 

A Toronto-based company called i4i first sued Microsoft four years ago, arguing that it owned the technology behind a tool on the popular software.  Microsoft now only sells versions of the word-processing software that do not contain the technology.

 

Too good for the company, Microsoft might have acquired them with less than $300m. But now, they exist and have a badge of defeating the monstrous behemoth that Bill Gates built.