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St. Louis Business Journal
bizjournals.com/stlouis
VOL. 33, NO. 20 40 PAGES
January 4-10, 2013 $2.00
Banks whittle down real estate
Foreclosed property falls
11 percent to $457 million
by greg edwards
[email protected]
t @stlbizgedwards
St. Louis banks are reporting encouraging news in three key financial measurements: bad loans, foreclosed property and provision expenses. All are
declining — another indication that financial institutions are regaining their
footing.
“That’s good news — the darkest
days are behind us, and sunnier days
are ahead,” said Gary Corner, senior
examiner at the Federal Reserve Bank
of St. Louis.
Bad loans, called nonperforming
loans, declined 32 percent, to $578
million at the end of the third quarter
at 73 commercial banks based here,
the St. Louis Fed reported. That’s down
$267 million from Sept. 30, 2011, and
$479 million from Sept. 30, 2010.
Foreclosed property held by the
banks, called other real estate owned,
declined 11 percent, to $457 million in
the quarter from $513 million a year
earlier and $484 million two years earlier. Foreclosures had been increasing
as the banks gave up on loans that
were nonperforming, that is, the borrowers had stopped paying interest.
But that trend seems to have halted
with the simultaneous declines in both
bad loans and foreclosed property on
the books.
“A year ago, the problem assets —
primarily real estate loans — were
moving through the pipeline to foreclosure faster than the banks could dispose of the property,” Corner said.
“With fewer problem assets coming into the pipeline, banks have time to
catch their breath.”
And the banks appear to believe bad
banks | 33
Bad Loans
YTD
Through
NoNPerformINg
LoaNS
(IN mILLIoNS)
Q3 2012
Q3 2011
Q3 2010
$578
$845
$1,057
PerCeNT
ChaNge
-31.6%
-20.1%
ForecLosed ProPerty
YTD
Through
oTher reaL eSTaTe
owNeD
(IN mILLIoNS)
Q3 2012
Q3 2011
Q3 2010
$457
$513
$484
PerCeNT
ChaNge
-10.9%
6.0%
Source: Bank reports to Federal reserve Bank of St. Louis
PATENTS ON THE RISE
Monsanto, Emerson lead in new patents received
by e.b. solomont
[email protected]
t stlbizesolomont
patents | 34
Number of patents awarded by company
Monsanto Co.
Emerson
Eveready Battery Co. Inc.
Washington University
Express Scripts
Nidec Motor Corp.
Belden Inc.
Stereotaxis Inc.
Cepia LLC
Sigma-Aldrich Corp.
Code 3 Inc.
Rawlings Sporting Goods Inc.
Bunge N.A.
Handi-Craft Co.
TricorBraun Inc.
Saint Louis University
* includes Monsanto technology LLC and patents
developed with Stine Seed Farm inc. of iowa.
** includes patents awarded to
emerson’s businesses.
*** includes patents acquired in
Medco deal.
Inventors profit
from patents.
See page 35
56525 10781
8
Chris Hayes oversees ip initiatives for emerson
6
MARk GILLILAND
I
n 2012, soybean breeder Bill Eby was awarded a patent for a unique soybean
variety he developed with Monsanto Co.
Inventor Michael Mahar at Express Scripts received patent protection for a
prescription drug packaging method.
Jonathan Fitch invented a charger for Eveready Battery Co., a subsidiary of Energizer; and a foursome at the cable company
Belden Inc., Allen Malloy,
Charles Thomas, Mike
Dean and Bruce Hauver
Sr., snagged a patent for a
cable connector.
These inventions were
among the 778 patents
awarded to St. Louis companies, institutions and
individuals in 2012 by
the U.S. Patent and
Trademark
Office,
through Dec. 18, 2012,
Patent Power
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393 *
270 **
46
24
22 ***
16
12
11
10
10
8
8
7
7
7
6
CPI prepared
for liquidation
by angela mueller
[email protected]
t @stlbizamueller
Struggling portrait company CPI Corp.
is in violation of its lending agreements,
which were due on Dec. 31, and it’s negotiating with Bank of America and its other
lenders on an extension until mid-January, according to recent filings with the Securities and Exchange Commission (SEC).
CPI admitted in its filing that “there can
be no assurances that the lenders will
grant such waivers or amendments on
commercially reasonable terms, if at all.”
And if no agreements are reached, CPI
could be forced to liquidate, according to
the filing.
In June, CPI, at the behest of its lenders,
appointed Andrew Rolfe as its chief restructuring officer. At the same time, the
company hired an investment bank —
New York-based Lazard Middle Market
LLC — to explore a possible sale of the
company. But, so far, the only deal was the
sale last month of substantially all of the
wedding business assets of CPI’s Bella Pictures Holdings unit to Huntingdon Valley,
Pa.-based The Pros Entertainment ServicCpi | 33
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markets in our 2013
Outlook Report.
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© 2013 St. LouiS BuSineSS JournaL
©2012 Wells Fargo Advisors, LLC, Member SIPC | 0812-0913
34
St.LouisBusinessJournal
stlouis.bizjournals.com
January4-10,2013
patents: Express Scripts received 22 patents
related to operations, IT and other solutions
continued from page 1
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accordingtoBusiness Journalresearch.The
totalnumberofpatentsisthehighestin
fiveyears,topping673patentsawarded
in2011;745in2010;630in2009;and
533in2008.
AtthetopofthelistisMonsanto,with393
patents, including those awarded to Monsanto Technology LLC and patents developedaspartofasoybeancollaborationwith
StineSeedFarmInc.ofIowa,inwhicheach
companyco-ownstheintellectualproperty.
Emerson followed closely, with 270 U.S.
patents in fiscal 2012 beginning Oct. 1.
Worldwide, the $24.5 billion manufacturingandtechnologycompanyreceivedmore
than1,600patentslastyear.
“It’sveryimportanttous,becauseitprotectsthecoreofourbusiness,whichisdeveloping solutions for our customers,” said
ChrisHayes,assistantgeneralcounselwho
overseesEmerson’sintellectualpropertyinitiative.
AtEmerson,considerationofpatentfilings
is part of the company’s product developmentprocess,andpatentsaremanagedona
businessunitlevelbymorethan60patent
reviewcommittees.China’sgrowingeconomyisanimportantmarket,andin2011Emersonestablishedapatentsupportgroupin
China, where seven patent engineers help
prepare and file patent applications. At its
corporate headquarters, Emerson employs
aneight-memberIPgroupwiththreepatent
attorneys.Thereareanothereightin-house
‘When times get tougher,
companies want to
capitalize on the ip they’ve
been investing in.’
Patrick Rasche |ArmstrongTeasdale
patent lawyers, and Emerson relies extensively on outside counsel, including local
firmHarness,Dickey&PiercePLC,among
others.
Overall,thenumberofpatentsawardedin
theU.S.isontherise.In2011,thenumberof
patents awarded by the U.S. Patent and
Trademark Office grew 5 percent to
244,430,accordingtoaSeptember2012reportbyPricewaterhouseCoopers.Still,that
numberislessthanthe23percentgrowth
ratebetween2009and2010.
“When times get tougher, companies
wanttocapitalizeontheIPthey’vebeeninvestingin,sothattheycangetsomerevenue
outoftheirIP,”saidPatrickRasche,headof
thepatentpracticeatArmstrongTeasdale,
which has the largest local patent practice
with42patentattorneysand68localIPattorneys.“Apatentisabusinesstool,”hesaid.
“It’salimitedmonopolythatagovernment
grantsinexchangeforinnovation.”
Raschesaidthefirm’sintellectualpropertypracticehasgrownduringthedownturn
ascompanieshavemovedlegalworktothe
Midwest,wherecostsarelowerthanonthe
coasts.In2011,ArmstrongTeasdaleclients
worldwide applied for 1,955 patents and
wereawarded851patents.Raschesaidhe
expectsthatnumbertogoup10percentin
2012.Lastyear,thefirmadded16IPattorneystohandletheincreaseinbusiness.
Top paTenT pracTices
Ranked by number of local licensed
patent attorneys
ArmstrongTeasdaleLLP
SennigerPowersLLP
ThompsonCoburnLLP
Harness,Dickey&PiercePLC
PolsterLiederWoodruff &LucchesiLC
42
28
26
19
16
Source: Business Journal research as of April 13, 2012.
Patentsarenotoriouslyexpensive,costing
anywherefromafewthousandto$40,000
or more, and the process can take several
yearsdependingonthecomplexityoftheapplication. For example, Monsanto was
awardedapatentonDec.18,2012,afterfilingapatentapplicationonOct.4,1985,for
plasmids for transforming plant cells. By
contrast, Code 3, which makes light and
sound-based warning products for emergency response, utility and industrial settings, filed an application on June 28 and
wasapprovedNov.6,2012.
Butthevalueofpatentprotectioncanbe
great.“Intellectualpropertyrightsarecrucialtoourbusiness,particularlyourSeeds
and Genomics segment,” Monsanto stated
in its 2012 annual report. “The extent to
whichwesucceedorfailinoureffortstoprotectourintellectualpropertywillaffectour
costs,salesandotherresultsofoperations.”
Led by Chairman and CEO Hugh Grant,
St.Louis-basedMonsantohadsalesof$13.5
billioninfiscal2012,endedAug.31.Inadditiontosalesofitsseeds,Monsanto“broadly
licensestechnologyandpatents,”thereport
stated,androyaltiesrelatedtothoselicenses
isadriverofrevenue.
In2008,forinstance,MonsantoandSyngenta inked a licensing agreement giving
Syngenta access to Monsanto’s Genuity
RoundupReady2Yieldsoybeantechnology
inexchangeforroyaltypaymentsbasedon
sales. The minimum obligation from Syngentaoverthenine-yearcontractis$81million. Also in 2008, Monsanto entered into
an agreement with Pioneer Hi-Bred InternationalInc.regardingacornherbicidetoleranceandinsectcontroltraittechnology;
cashreceiptsrelatedtotheagreementstand
at $725 million over an eight-year period,
according to the annual report. In 2012,
Monsanto’sdeferredincometaxbalancesrelatedtoroyaltieswas$106millionasofAug.
31,upfrom$80millionin2011.
Inastatement,Monsantosaidprotecting
itsintellectualproperty“ensureswearepaid
forourproductsandfortheinvestmentswe
put into developing products.” Last year,
Monsantospentabout$1.5billiononR&D.
Withthestakessohigh,patentlitigation
filingsincreasedby22percentin2011,accordingtoPricewaterhouseCoopers.
InAugust,Monsantowasawarded$1billion in a 2009 patent-infringement case
against DuPont Co. over DuPont’s use of
Roundup,akeyMonsantotechnologythat
killsweedswithoutdamagingcrops.
Locally,althoughMonsantoandEmerson
tookhomethelion’sshare,otherswererewarded for their innovations, including
WashingtonUniversity(24),motorandcontrol manufacturer Nidec Motor Corp. (16),
medicaldevicemakerStereotaxis(11),and
continued on next page
2
January 4-10, 2013
St. Louis Business Journal
35
stlouis.bizjournals.com
From previous page
toy maker Cepia LLC (10), among others.
For Washington U., patents and the licensing and marketing of intellectual property
are a strategic focus. In fiscal 2012, the university received $620 million in extramural
funding and spent just over that on research
activities, said Dr. Evan Kharasch, vice
chancellor for research. “We want the results of our research to translate into the
greatest public good,” he said.
Patents are handled by the university’s Office of Technology Management, which sifts
through invention disclosures submitted by
investigators and decides whether to file provisional patent applications. “It’s a very central process,” he said. Efforts to file patents
and commercialize technology and license
patents are handled by the same office.
In the past five years, the office has handled more than 100 invention disclosures
annually and filed more than 75 patents,
and has been awarded an average of 15 patents a year. The school also has executed
about 40 licensing agreements per year,
and, over the past three years, has received
an average of $6 million in royalty revenue.
The biggest revenue generator has been
products based on technology developed by
Dr. Jack Ladenson, co-medical director of
clinical chemistry at Washington University
School of Medicine, who has developed biomarkers for heart attacks. Over four decades,
his technology has been licensed to multinational diagnostic companies, generating
$50 million in revenue for the university.
Intellectual property is owned by the university if significant university resources
were used, or if it was created pursuant to
research whose funding — though corpo-
rate, federal or other external sponsors —
was administered by the school. The net IP
commercialization income is shared, with
35 percent going to the creator; 40 percent
to the university; and 25 percent to the Office of Technology Management to support
operations and strategic investment. According to those calculations Ladenson
may have earned at least $17.5 million.
Washington U. also has a Bear Cub Fund
that provides seed funding to faculty on a
peer-reviewed competitive basis for developing potentially commercializable technologies. One such example is the startup Retectix, a medical device company specializing
in creating synthetic surgical mesh. While
innovations are encouraged in every sector
and school of the university, a large portion
come from, or in collaboration with, the
medical school.
In 2012, Express Scripts boosted the number of patents it owns through its $29.1 billion acquisition of Medco Health Solutions.
The combined company holds more than
100 patents and received 22 in 2012. On its
own, Express Scripts was awarded seven.
Attorney Randy Canis, senior patent counsel, leads a team working to identify and
evaluate innovation for possible patent protection.
Led by CEO George Paz, Express Scripts reported revenue of $46.13 billion for 2011.
The majority of the company’s patent filings
are in operations, information technology
and other new solutions, spokesman Thom
Gross said. “We have patents and patent filings on the pharmacy floor that enable our
patients to receive prescription drugs faster
and cheaper.”
Rebecca Wohltman contributed to this story.
C
Patent gives you ‘collateral in the marketplace’
Not everyone is a patent giant, but protecting IP is still a big deal.
Drummer John Gresko, a St. Louis native
who founded Direct Sound Headphones
LLC, recently secured his fourth patent for
Extreme Isolation headphones. “Hearing
protection is our main thing,” said Gresko,
whose headphones are used by musicians
including Rich Redmond, the drummer for
Jason Aldean; Jim Riley, the drummer for
Rascal Flatts; and Dolly Parton. “She has a
white set,” he said.
Gresko said he began experimenting
with isolation headphones in the 1980s. “I
put parts together until I came up with a
combination that would block enough
sound.” He and business partner Steve
Rois started their company in 2001 with
$100,000. It cost $20,000 to secure the
main patent. The business currently does
just under $1 million in annual sales.
Another local inventor, Bob Steffen, secured a patent in July for a device that detects the presence of a child in a vehicle.
Steffen, who founded Cars-N-Kids LLC
with Gregory Schoenberg, said next month
the technology will be rolled out in a partnership with car seat maker First Years.
A patent “gives your company collateral
in the marketplace,” he said.
Steffen’s technology is a thin, pressuresensitive sensor that’s placed between a
child’s car seat and the car seat cover. Using a smartphone app and Bluetooth technology, it alerts parents if the child gets out
of the car seat or if the child is in the car
seat five minutes after the car has stopped.
It also tells the parent the temperature in
the car seat. Kirk Damman of Lewis, Rice &
Career Opportunities
Date:
Senior Technical Architect needed by AT&T in St. Louis, Missouri to
translate business needs into technical solutions and architect solutions
to problems through reasoned application of information technology.
Requires Master’s or foreign equivalent degree in Engineering or Computer
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Perl, JavaScript, HTML,XML, Eclipse, WebSphere Application Developer,
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followed by five years of progressive experience identifying and assessing
alternate software design and experience in architecting software solutions
using Java, Perl, JavaScript, HTML,XML, Eclipse, WebSphere Application
Developer, Linux scripting, SQL, PL/SQL, HTTP, HTTPS, SQLPlus, and
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Bids
REQUEST FOR BIDS
The City of Ballwin seeks bids from
qualified contractors for a “2013
CONCRETE PAVEMENT & SIDEWALK REPLACEMENT” (the “Project”) in the City of Ballwin, Missouri.
Sealed bids must be addressed to
Ballwin Public Works DepartJanice Viloria
408.299.1811 the
From: _______________________________________________________
ment, 200 Park Drive, Ballwin, Mis-
Phone
Message
Peabody Investments Corp. has an
opening in St. Louis, MO for a Senior
SAP Business Analyst. Responsible
for the overall design & implementation of SAP Business Intelligence
solutions. Master’s in Comp Sci, Info
Sci, or related field & 2 yrs exp in SAP
Enterprise Application, specifically Bus
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Send resumes to L. Peterson,
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Call 314.421.8341
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Farms for
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475 acres of WRP on MS River
$1.5 million
Call Rob @ 618-792-0003
souri 63011 will be accepted by the
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Copies of the Bid Documents may
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The bidder shall perform with his
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The City of Ballwin will affirmatively
assure that in any contract entered
into pursuant to this Notice to Contractors, qualified minority business
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MAx BOUVATTE
Bob steffen secured a patent for a device to
detect a child’s presence in a car seat.
Fingersh is the company’s patent lawyer.
Steffen said the company’s startup costs
were around $500,000, including $25,000
spent on the patent. He and Schoenberg
used personal funds, and raised money from
friends and family. Cars-N-Kids also sought
approval from Apple through its MFi licensing program. That, too, lends credibility. “It
says Apple says it’s OK. Anybody who knows
Apple knows that’s a big step,” Steffen said.
In 2012, other local inventors who
snagged patents include Jan Alexander, for
a multiple-pocket apron; Leroy Burkemper, for a golf ball holder; and a company
called Sweet Living Group LLC, for an ecological fabric with UV protection.
- e.b. Solomont
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