the value of patents the executives' perspective v3
TRANSCRIPT
UNLOCKING THE VALUE OF YOUR IP UNLOCKING THE VALUE OF YOUR
The Value of Patents Perspectives of Business Executives
Fas Mosleh Senior VP
Kanzatec IP M&A
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UNLOCKING THE VALUE OF YOUR IP
Agenda
• Introduction
• The Stakeholders and their Views
• Conclusions
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• Patent strategy to •Strengthen the business and its core capabilities •Access to cash when needed
•Enhance the value for investors
UNLOCKING THE VALUE OF YOUR IP
Big Deals
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Nokia Sells 2,000 Patents Mosaid Technologies Will Share in Revenue Wrung From Wireless Know-How
$4.5B
UNLOCKING THE VALUE OF YOUR IP
• Why invest?
• How much will it cost?
• What do I get from it?
• Small vs. large business
– Resources to leverage patents to keep out competition
– Need to protect or defend from competitors
• The NPE question
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CEO - Questions
UNLOCKING THE VALUE OF YOUR IP
Big Company CEO
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•Protect my products •Prevent competitive incursion •Use Legal Team to battle •Perspective: I have the resources and want to be the market leader
Example Option Pro Con
Litigate Win for products Cost
License Utilize IP/Revenues Organize/invest
Do nothing No initial cost High risk of attack/lose IP value
UNLOCKING THE VALUE OF YOUR IP
• Situation – Entering new market
• Challenges – Very contentious space
• Action
– Proactively protect by buying patents
• Results
– Bought $5M worth patents to protect
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Big Co. CEO View – Acquire IP to Protect
IP
Protect: Aggressively Proactively Reactively
UNLOCKING THE VALUE OF YOUR IP
Patent Monetization Benefits
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Monetization
Save costs
Sharpen Win focus
High margin
revenues
Strategic alignment
UNLOCKING THE VALUE OF YOUR IP
Small Company CEO
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•Few resources •Optimize value from Patents/IP •Raise funds •Let NPEs go after Competition •Perspective: Can I use my patents to expand my resources? I want to survive/exit/IPO
Example Option Pro Con
Litigate Win for products Cost
License Utilize IP/Revenues Organize/invest
Do nothing No initial cost High risk of attack/lose IP value
UNLOCKING THE VALUE OF YOUR IP
• Situation – Seeking Funding/IPO
• Challenges – Must maximize $$s
• Action – Explore high return IP acquisition to boost valuation
• Results – Bought ~$2M of patents = valuation boost of additional $3-5M
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Small Co. CEO View – IP Boosts Value
Equalizer
UNLOCKING THE VALUE OF YOUR IP
• Average Application $10K
• Average Patent $75K
• Good Patent $150-200K
• Great Patent $250-$500K?
• Litigation class patent >$500K
• Portfolios are worth more than single patents
• Patents with Apps are worth more than patents alone
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How Much Are They Worth?
Getting the Max
UNLOCKING THE VALUE OF YOUR IP
CTO
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•Invent •Describe/protect our products •Innate Value of Invention •Perspective: I want to keep my patents and develop my own patents – no need to acquire
Example Option Pro Con
Divest Reinvest in relevant IP ‘Lose’ Patents
Develop More cool inventions Less resource on development
Do nothing No initial cost High risk of attack/lose IP value
UNLOCKING THE VALUE OF YOUR IP
CTO View to Defend Protects
Time
Revenues/Impact
Product business trajectory
Current product business
Business #1 e.g. Cameras
Business #2 e.g. Enterprise Printers
Business #3 e.g. Digital Frames
Types of defense: Aggressive Proactive Reactive
Source: Juldee, 2011
UNLOCKING THE VALUE OF YOUR IP
GC/Chief IP Counsel
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•Perspective: Follow business priorities and execute the plan – litigate, license, monetize, develop
Example Option Pro Con
Litigate Win for products Cost
License Utilize IP/Revenues Organize/invest
Do nothing No initial cost High risk of attack/lose IP value
Offensive Defensive
UNLOCKING THE VALUE OF YOUR IP
• Observability/method of detection
• Industry demand
• Industry actions/trends – who is suing whom
• Technology area
• Quality of patent; strength of claims
• Health of patents and apps (due diligence health check)
• Who is a licensee? What cross licensing if any?
• Expiration
• Work arounds
• Applicability (today and future)
What affects the value of your patents?
UNLOCKING THE VALUE OF YOUR IP 19
Value by Mix of Apps and Patents
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Low Moderate High Higher Highest
"Tested" Patents
Patents
Pre-grant Apps
Apps
UNLOCKING THE VALUE OF YOUR IP
How Hot or Cold?
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Mobile/Wireless Social Internet video E-Commerce Memory Analytics Manufacturing
UNLOCKING THE VALUE OF YOUR IP
Business Strategy Questions
• Do we intend to be offensive or defensive with our IP?
• Will we assert these patents against other companies?
• Do we need these patents strategically?
– Do they align to our future direction?
• How old are these patents and how close are they to expiration?
– What value remains – is it best to extract the maximum value now or later?
– What are the costs of maintenance?
• What return would we get if we were to sell the patents?
• What are the risks and downsides of selling?
• What does the cost benefit analysis indicate?
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UNLOCKING THE VALUE OF YOUR IP
My Business Needs
• Protecting My Products
• Repelling My Competition
• Enhancing the Value of My Business
• Optimize the return on my IP Assets – Identify, divest non-strategic assets; redeploy $$s
– Understand their business value and buyers’ needs
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UNLOCKING THE VALUE OF YOUR IP
• Example of Terms: • We are prepared to move forward with an offer of X$ on your complete Patent
portfolio, including U.S. Patents A, B, C, plus any pending U.S. applications, and any foreign patents and foreign applications, pending our final diligence and analysis.
• It is expected we will complete our final analysis by October 12th. The offer would also include either a license back or an adjustment in the offer price.
• Please respond to this offer with your acceptance by October 8, 2011. • This offer is contingent upon proof of ownership and authority to transfer all rights
to this patent along with favorable results of our diligence and analysis. This offer will be open until Monday, October 12, 2011.
• Your acceptance will be accepted from an authorized person to me via email or facsimile transmission to 650 468 0401.
• Closing date, exclusivity may be included
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What an IP Deal Offer Looks Like