unece april 2009 commercialization of ipr a business perspective jason bucha, compliance counsel...
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UNECE April 2009
Commercialization of IPR Commercialization of IPR A Business PerspectiveA Business Perspective
Jason Bucha, Compliance CounselJason Bucha, Compliance Counsel
April 2, 2009April 2, 2009
Dolby Laboratories, Inc.Dolby Laboratories, Inc.
Dolby Laboratories is the global leader in technologies Dolby Laboratories is the global leader in technologies that are essential elements in the best entertainment that are essential elements in the best entertainment experiences. Founded in 1965 and best known for high-experiences. Founded in 1965 and best known for high-quality audio and surround sound, Dolby creates quality audio and surround sound, Dolby creates innovations that enrich entertainment at the movies, at innovations that enrich entertainment at the movies, at home, or on the go. home, or on the go.
Over 670 licensed consumer electronics manufacturers Over 670 licensed consumer electronics manufacturers and software developers in 35 countriesand software developers in 35 countries
Over 3.4 Billion licensed products reported soldOver 3.4 Billion licensed products reported sold
2UNECE April 2009
The Importance of Innovation and IPR The Importance of Innovation and IPR Commercialization to Business SuccessCommercialization to Business Success
Stay competitiveStay competitive Better products and efficienciesBetter products and efficiencies
Fund research and developmentFund research and development
Company valuationCompany valuation
3UNECE April 2009
Broad Benefits of Innovation Broad Benefits of Innovation and IPR Commercializationand IPR Commercialization
Increased competitionIncreased competition Better consumer experiencesBetter consumer experiences
Increased jobs and spendingIncreased jobs and spending
Technology diffusionTechnology diffusion
General uplift of experience and capabilityGeneral uplift of experience and capability
4UNECE April 2009
IPR BUSINESS STRATEGYIPR BUSINESS STRATEGY
5UNECE April 2009
IPR GenerallyIPR Generally
Types of IPRTypes of IPR Patents, trademarks, copyrights, trade secrets, know-howPatents, trademarks, copyrights, trade secrets, know-how
Sources of IPRSources of IPR Internal research and developmentInternal research and development
Co-developmentCo-development
Acquisition from third partiesAcquisition from third parties
Licensing (In)Licensing (In)
6UNECE April 2009
IPR Business Strategy
Patent Portfolio StrategyPatent Portfolio Strategy
Barrier to competitorsBarrier to competitors
OffensiveOffensive Assertions against infringersAssertions against infringers
DefensiveDefensive Shield against third party IPR assertionsShield against third party IPR assertions
Cross-licensing optionCross-licensing option
Removal of threats by acquisition of underlying rightsRemoval of threats by acquisition of underlying rights
ConsiderationsConsiderations Key patents vs. Broad coverageKey patents vs. Broad coverage
TerritoriesTerritories
7UNECE April 2009
IPR Business Strategy
Differentiate your products and servicesDifferentiate your products and services
Develop goodwill that can be used in many waysDevelop goodwill that can be used in many ways
Relative ease of enforcementRelative ease of enforcement
Considerations:Considerations: Conduct searches prior to investmentConduct searches prior to investment
TerritoriesTerritories
8UNECE April 2009
IPR Business Strategy
Trademark Portfolio StrategyTrademark Portfolio Strategy
Internal Management of IPRInternal Management of IPR
Periodic internal auditsPeriodic internal audits
Invention disclosure policyInvention disclosure policy Education and awarenessEducation and awareness
Invention review committeeInvention review committee
Applications and registrationsApplications and registrations
For TMs: Education regarding proper useFor TMs: Education regarding proper use
Employment AgreementsEmployment Agreements
Non-Disclosure Agreements (NDAs)Non-Disclosure Agreements (NDAs)
9UNECE April 2009
IPR Business Strategy
Preparing for CommercializationPreparing for Commercialization
Market analysisMarket analysis FinancialFinancial
Market pull vs. Technology pushMarket pull vs. Technology push
Competitors’ IPRCompetitors’ IPR
Continual evaluation of innovation from the Continual evaluation of innovation from the perspective of commercializationperspective of commercialization
IPR valuation IPR valuation
10UNECE April 2009
IPR Business Strategy
IPR Commercialization StrategiesIPR Commercialization Strategies
““Do it yourself”Do it yourself” Consider outsourcing certain aspectsConsider outsourcing certain aspects
Joint Venture / Spin-OutJoint Venture / Spin-Out
Sale of IPRSale of IPR
LicensingLicensing
11UNECE April 2009
IPR Business Strategy
Licensing as a Business StrategyLicensing as a Business Strategy
BenefitsBenefits Sharing of riskSharing of risk
Less resource commitment Less resource commitment
Shorter time to marketShorter time to market
DrawbacksDrawbacks Loss of controlLoss of control
Dependent on licenseesDependent on licensees
Sharing of IPR value with Sharing of IPR value with licenseelicensee
12UNECE April 2009
Granting someone the right under your IPR to Granting someone the right under your IPR to make, use or sell a product, process or service in make, use or sell a product, process or service in return for payment or other consideration. return for payment or other consideration.
Licensing ConsiderationsLicensing Considerations
What is being licensed?What is being licensed?
Who should be licensed?Who should be licensed?
What should the scope of the license be so as to What should the scope of the license be so as to maximize value and achieve goals?maximize value and achieve goals? Geographic, field of use, exclusivity, sublicensing, termGeographic, field of use, exclusivity, sublicensing, term
What payment terms are most appropriate?What payment terms are most appropriate? Flat fee, royalties, minimums, milestones, combinationFlat fee, royalties, minimums, milestones, combination
Who will pay?Who will pay?
13UNECE April 2009
Licensing as a Business Strategy
Licensing ConsiderationsLicensing Considerations
What responsibilities will the company have to the What responsibilities will the company have to the licensee?licensee? Deliverables, support, maintenance, etc.Deliverables, support, maintenance, etc.
Standards (if applicable)Standards (if applicable)
Patent PoolsPatent Pools
14UNECE April 2009
Licensing as a Business Strategy
Administration of a Licensing ProgramAdministration of a Licensing Program
Research and DevelopmentResearch and Development
Sales and MarketingSales and Marketing
Licensee SupportLicensee Support
AccountingAccounting
LegalLegal
ComplianceCompliance
15UNECE April 2009
Licensing as a Business Strategy
The License AgreementThe License Agreement
There is no “Standard License Agreement”There is no “Standard License Agreement” Agreements must account for differences in:Agreements must account for differences in:
Licensing strategiesLicensing strategies Who is being licensed?Who is being licensed?
Risk toleranceRisk tolerance
Market positionMarket position
Territory and JurisdictionTerritory and Jurisdiction
16UNECE April 2009
The License Agreement – Key TermsThe License Agreement – Key Terms
License GrantLicense Grant
Grant BackGrant Back
Trademark TermsTrademark Terms
Marking RequirementsMarking Requirements
Payment TermsPayment Terms
Reporting ObligationsReporting Obligations
Audit RightsAudit Rights
ConfidentialityConfidentiality
PublicityPublicity
Notification of InfringementNotification of Infringement
Term of AgreementTerm of Agreement
TerminationTermination
BankruptcyBankruptcy
Continued…Continued…
17UNECE April 2009
The License Agreement
The License Agreement – Key TermsThe License Agreement – Key Terms
WarrantiesWarranties
IndemnificationIndemnification
Assignment RightsAssignment Rights
Notice RequirementsNotice Requirements
Governing LawGoverning Law
Dispute ResolutionDispute Resolution
18UNECE April 2009
The License Agreement
20Confidential Information