The value of patents the executives' perspective v3
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This document discusses perspectives on intellectual property (IP) from different stakeholders within a company. It provides an overview of how CEOs, CTOs, and general counsel view IP and consider options like monetizing, defending, or developing their patent portfolios. The CEO of a small company sees boosting valuation through IP acquisition, while a big company CEO focuses on aggressively protecting products. A CTO wants to keep and develop their own patents. General counsel executes business priorities around litigating, licensing, or monetizing patents. Ultimately, companies should optimize returns from their IP assets and divest non-strategic patents.
The value of patents the executives' perspective v3
- 1. UNLOCKING THE VALUE OF YOUR IPUNLOCKING THE VALUE OF YOUR The Value of Patents Perspectives of Business Executives Fas Mosleh Senior VP Kanzatec IP M&A 1
- 2. UNLOCKING THE VALUE OF YOUR IP Agenda • Introduction • The Stakeholders and their Views • Conclusions 2 • Patent strategy to •Strengthen the business and its core capabilities •Access to cash when needed •Enhance the value for investors
- 3. UNLOCKING THE VALUE OF YOUR IPUNLOCKING THE VALUE OF YOUR Introduction
- 4. UNLOCKING THE VALUE OF YOUR IP What Kanzatec Does – R&R 4 Patent Sales
- 5. UNLOCKING THE VALUE OF YOUR IP Big Deals 5 Nokia Sells 2,000 Patents Mosaid Technologies Will Share in Revenue Wrung From Wireless Know-How $4.5B
- 6. 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 6 CEO - Questions
- 7. UNLOCKING THE VALUE OF YOUR IPUNLOCKING THE VALUE OF YOUR CEO/Founder/COO
- 8. UNLOCKING THE VALUE OF YOUR IP • Questions • Need • Risk • Value • Actions 8 CxO Considerations
- 9. UNLOCKING THE VALUE OF YOUR IP Big Company CEO 9 •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
- 10. 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 10 Big Co. CEO View – Acquire IP to Protect IP Protect: Aggressively Proactively Reactively
- 11. UNLOCKING THE VALUE OF YOUR IP Patent Monetization Benefits 11 Monetization Save costs Sharpen Win focus High margin revenues Strategic alignment
- 12. UNLOCKING THE VALUE OF YOUR IP Small Company CEO 12 •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
- 13. 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 13 Small Co. CEO View – IP Boosts Value Equalizer
- 14. 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 14 How Much Are They Worth? Getting the Max
- 15. UNLOCKING THE VALUE OF YOUR IP CTO 15 •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
- 16. 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
- 17. UNLOCKING THE VALUE OF YOUR IP GC/Chief IP Counsel 17 •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
- 18. 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?
- 19. UNLOCKING THE VALUE OF YOUR IP 19 Value by Mix of Apps and Patents 0 1 2 3 4 5 6 7 8 9 Low Moderate High Higher Highest "Tested" Patents Patents Pre-grant Apps Apps
- 20. UNLOCKING THE VALUE OF YOUR IP How Hot or Cold? 20 Mobile/Wireless Social Internet video E-Commerce Memory Analytics Manufacturing
- 21. 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? 21
- 22. UNLOCKING THE VALUE OF YOUR IPUNLOCKING THE VALUE OF YOUR In Conclusion...
- 23. 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 23
- 24. UNLOCKING THE VALUE OF YOUR IPUNLOCKING THE VALUE OF YOUR Backup
- 25. 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 25 What an IP Deal Offer Looks Like