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Ronald Katz, who has made an estimated $1 billion behind the power of 52 patents, came before an expectant group of licensing executives on Thursday and described how he figured out that interactive telephone call processing would one day impact hundreds of millions of lives around the world.

In what was billed as the first formal speech about his career, Katz recalled the day in the early 1990s when he told the New York Times that he believed his patent portfolio royalties would one day be worth "in the tens of millions of dollars if not the hundreds of millions." His prediction was met with skepticism by the newspaper.

Early in his career, Katz formed Telecredit, Inc., the nation's first on-line, real-time credit and check authorizing system. He patented that system and between 1987 and 1993, he applied for 25 more patents and received approval for 20 of them.

In his keynote speech at the 2005 Spring Meeting of the Licensing Executive Society (USA and Canada) Inc., Katz seemed most proud of the day that CBS-TV used his technology to gauge viewer approval of a State of the Union speech by the senior President George Bush.

Katz said, "It was an extraordinary event. The network received 300,000 calls in a very short time...it nearly shut down the telephone system."

In summary, Katz said matter-of-factly of his phenomenal impact on the interactive call industry, "Our patented technology has provided value as more and more companies have required it. The marketplace has just exploded in the last 10 to 15 years."

RED HAT CHIEF STIRS DEBATE ON OPEN-SOURCE SOFTWARE

Mathew Szulik, CEO and President of Red Hat, Inc., told a workshop audience at the LES Spring Meeting on Thursday that there is a critical need for a worldwide debate about the future of intellectual property in the digital domain.

Szulik, whose company is the world's leading provider of Linux and open source technology, said intellectual property abuses are widespread. He explained, "There are people out there who acquire an intellectual property, only to start looking at companies' balance sheets and then launch litigation. This is very costly...Red Hat has 17 attorneys on our staff and I'm embarrassed to tell you that."

He said that the problem of intellectual property protection in the software world is made worse because software development involves patent, copyright and trade secret issues, a rare confluence of legal complexities. There are now approximately 150,000 existing patents potentially affecting the software industry.

Szulik said, "It's very possible for someone to work for three or four years developing a process only to turn around and find he faces a cease and desist order. It is an enormous threat to the entrepreneurial spirit."

Szulik contends that the ongoing debate over open-source software has long since extended beyond the boundaries of the Western Hemisphere. He cited the perspective in what Red Hat management calls the BRIC countries (Brazil, Russia, India and China.).

"The leaders of these countries plan to use open-source software to move their countries into the 21st century," Szulik said.

BAUM NOTES MEETING'S CONTENT VARIETY

LES Spring Meeting Chair Allen Baum could not resist noting the "refreshing opposite poles" in the major presentations by Ron Katz and Mathew Szulik. Baum, a Raleigh patent attorney with Hutchison+Mason PLLC, also serves as LES Vice President of Administration.

Baum observed, "Our meeting audiences could not overlook the irony of the opposite poles represented by the experiences of Ron Katz and Mathew Szulik. One man built his career on the acquisition and protection of patents and one believes his industry would be healthier without any patents."

TAX BENEFITS EXPECTED TO DRIVE MORE DEAL-MAKING

In a Thursday Plenary Session at the LES meeting, Thomas A. Picone of the Schering-Plough Corporation said he is very surprised that the popular media in the United States has not paid more attention to the potential impact of the American Jobs Creation Act of 2004.

The legislation allows a one-time taxation of 5.25 percent on overseas profits versus the normal rate of 35 percent. In short, that puts about $400 billion extra on the ledgers of American corporations, money that could well be applied to increased mergers and acquisitions.

Picone, who heads up Strategic Alliances for Schering-Plough, commented, "The Act could be a major factor in American deal-making."

Allen Baum, chairing the LES meeting, added, "I think the Jobs Creation Act is huge and might drive the deal-making business for two years."

ASTRAZENECA'S VIEW OF EVOLVING ALLIANCES

The Executive Director of AstraZeneca's Global Licensing told an LES Plenary Session audience on Thursday that there are good times ahead for biotech operatives looking for alliances with major pharmaceutical companies.

Dr. Roger Lloyd is the architect for AstraZeneca's strategic partnering, including a recently announced research and development alliance with Cambridge Antibody Technology. Lloyd offers the following advice in today's alliance environment:

---Partnering is an increasingly competitive arena

---At the moment, it is a seller's market for biotech developers

---Never has the biotech industry had so much power

---Don't be afraid to ask. You might be surprised with what you get

Floyd also offered a cautionary note, pointing out that about 50 percent of alliances eventually fail, according to the Harvard Business Review. He said, "This just means we have to work all that much harder to make them work."

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