BEN Networking - Generating Revenue Through IP February 2012

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  • Email newsletters are still effective - Got to be interesting Great subject lines, WIN, FREE etc
  • 1 client = expert, 5 clients = national expert, 50 clients = “leading” it’s not about selling, its about letting people buy - no complicated contracts risk reversal tell, don’t sell 30 day trial 6 month minimum then month to month
  • Huw Davies: 0777 1790 112

Transcript

  • 1. BEN Networking: Generating Revenue from IP Bristol & Bath Science Park, 9 February 2012, 6-9pm in collaboration with:            
  • 2. Practicalities
    • phones
    • emergency exits
  • 3. Keep in touch!
  • 4. Upcoming BEN Networking Events Theme When Where What Technology Update: Robotics 8 th March 2012 6-9pm Bristol & Bath Science Park
    • Speaker from Bristol Robotics Laboratory
    • Making money out of robotics
    • Where is the technology heading?
    Raising Finance in Difficult Times 19 th April 2012 6-9pm Bristol & Bath Science Park
    • The current investment landscape
    • How to access the appropriate financing deal for your business
    • New ways of raising finance/investing in entrepreneurs
    Technology Update: Smart Buildings 3 rd May 2012 6-9pm Bristol & Bath Science Park
    • The state of the art for intelligent networks in building automation systems
    • Business opportunities
    • The future – emerging technology
    Venturefest Bristol 2012 Wednesday 7 th November 2012 All day TBA
    • Keynote speakers
    • Workshops
    • Innovation showcase
    • Pitching panel
  • 5. Generating Revenue from IP
  • 6. This Evening’s Programme 6:45-8:15 Speakers Introduction Alastair Watson BEN Matthew Howell Withers & Rogers Terence Cosgrove Revolymer Alex Hall VWV 7:15-8:30 Q & A 8:30-9:00 Networking
  • 7. Generating Revenue from IP February, 2012
  • 8. ® ™ ©
  • 9.
    • Generating Revenue From Intellectual Property
    • Bristol & Bath Enterprise Network
    • 9 February 2012
    • Matthew Howell
    • Partner
    • Withers & Rogers LLP
  • 10. Nortel Patents Sold for $4.5bn (June 2011) Google to Buy Motorola Mobility for $12.5 Billion to Gain Wireless Patents (August 2011) IBM collects $1.1bn in licensing fees (2009) Arm Holdings profits up over 40% (January 2012) Coke world's most valuable brand (October 2011) The Headlines
  • 11.
    • A matrix of legal rights established to protect the fruits of intellectual effort...
    • ... often a company's investment in Research and Development.
    • Balance the interests of the state and business by providing a limited monopoly in exchange for wider dissemination of innovation.
    What is Intellectual Property?
  • 12. Registered Trade Marks Patents Common Law Trade Marks Registered Designs Know How Utility Models Copyright/Database rights Unregistered Design Right Registered Rights Unregistered Rights Trade Secrets What is Intellectual Property?
  • 13.
    • Fortress
    • Monopoly in a Box
    • Licensing
    • Franchising
    • Sale
    • Patent Box
    IP Exploitation Models
  • 14. 1. The Fortress Model
    • Create it
    • Protect it
    • Take it to market yourself
    • Keep others out
  • 15.
    • In 1991 25% of all vacuum cleaners sold in the UK were made by Hoover
    • In 2001 more than half the vacuum cleaners in the UK were sold by Dyson
    • In 2001 Hoover’s market share was less than 10%
    • In 2010 Dyson’s market share was 40% and operating profits are £190m
    Example - Dyson
  • 16. Dyson DC 01
    • 19 April1979: Dyson’s first UK patent application filed
    • 17 June 1981: European patent application no. 0042723 “Vacuum Cleaning Appliance” filed
    • 21 August 1985: Dyson European patent no. 0042723 granted
    • 1993: Dyson DC 01 launched
    • “ The first vacuum cleaner not to lose suction”
    Example - Dyson Dyson DC 01
  • 17.
    • In 1998 Dyson sold 1.4m units worldwide, generating revenues of £190m
    • In 1999 Hoover launched the “Triple Vortex” vacuum cleaner to compete with Dyson products
    • Dyson instigated patent infringement proceedings against Hoover at the UK High Court and won
    • In the High Court judgement of 2000, Hoover was ordered to stop supplying the Triple Vortex, Dyson was awarded £4m damages
    Example - Dyson
  • 18.
    • DC01 also protected by registered design
    • Dyson trade mark registered
    • To date, Dyson has filed >1000 patent applications
    • 119 Community Design applications
    • 65 Community Trade Mark applications
    UK Trade Mark Registration No. 2000035 (Filed 31/10/94) UK Trade Mark Registration No. 2316407 (filed 21/11/2002) Example - Dyson UK Registered Design No. 2027539 UK Trade Mark Registration No. 2000035 (Filed 31/10/94) UK Trade Mark Registration No. 2316407 (filed 21/11/2002)
  • 19.
    • Getting the right route to market is critical
    • Keep innovating - what's right now might not be so good tomorrow
    • Patents give you options
    • Need rights on peripheral features to build walls
    Fortress Model - Advice
  • 20.
    • Build specific exploitation company around specific IP rights
    • Show some turnover
    • Sell company (private/IPO)
    • Walk away and pocket cash
    2. Monopoly in a Box
  • 21.
    • Classical Licensing Model
      • License invention to others
      • Collect royalties
      • Works well in some (different) industries
    3. Licensing
  • 22.
    • Est. 1990 (a JV of Acorn, Apple & VLSI)
    • RISC processors
    • Market value ~ £1.15bn
    Example - ARM
  • 23.
    • What IP was in place?
      • Proof of concept (Acorn Archimedes)
      • no patents
      • 12 Engineers in a barn (literally)
    Example - ARM
  • 24.
    • How was the IP used?
      • First "products" delivered to VLSI at the end of 1990
      • Established a reputation and invested in R&D
      • Expanded patent portfolio (1000+)
      • 50 million processors/year in 1998
      • 1 billionth processor shipped in 2001
      • 10 billionth processor shipped in 2007
    Example - ARM
  • 25. Licensing - Points to Note
    • Not just patents - any IP can be licensed
    • Different types of licence
      • - exclusive/sole/non-exclusive
    • Different ways of licensing
      • - e.g. by territory/technological field
    • Royalty rates/payments vary depending on type of licence, number/type/value of rights licensed, market, purpose of licence etc.
  • 26.
    • Extension of licensing
    • Franchisor licenses brand (usually trade mark), know how, get up in exchange for franchise fee and ongoing royalty
    • In exchange, franchisee benefits from reputation, knowledge and corporate image of franchise, but must adhere to standards, rules and guidelines established by franchisor
    4. Franchising
  • 27. 5. Sale
    • IP is property, and can be sold just like any other form of property, e.g. Nortel Patent Auction
    • Sell unwanted/redundant IP, e.g. patents, brands/trade marks
    • IP often a key part of sale of a business - strong IP portfolio can increase the value of the business
  • 28.
    • DSG is one of Europe's leading specialist electrical retailing groups
    • DSG owns the well known trade marks
    • and
    • As part of its IP review DSG reviewed:
    • - trade marks which they proposed to use but never launched
    • - trade marks which were no longer part of their strategy
    • Selling these registered trade marks generated money to spend on other more valuable brands
    Example
  • 29. IP Exploitation
    • Models not mutually exclusive
      • e.g. can use a fortress model in home market to keep out competitors, but licence in other territories to achieve market penetration
    • Different IP rights can be complementary
      • e.g. protect technology with patents whilst building and protecting brand with trade marks and designs
  • 30.
    • Tax break for holders of UK and European patents
    • Due to come into force in April 2013
    • Reduction in corporation tax to 10% for profits attributable to patents
    • Applies to profits from sale of patented products and to licensing income
    • Speak to your tax advisor!
    Patent Box
  • 31.
    • Thank you
    • Matthew Howell
    • Partner
    • Withers & Rogers LLP
    • [email_address]
  • 32. Getting a good commercial deal
    • Alex Hall, Senior Solicitor
    Lawyers & Parliamentary Agents
  • 33. Introduction
    • Firm of 51 partners, 200 lawyers and over 300 staff
    • Office in Bristol (Head Office) and London
    • Full service commercial law firm
    • Commercial team – frequently advising on existence, protection, exploitation and enforcement of intellectual property
  • 34. Generating Revenue from IP Getting a Good Commercial Deal
    • What rights do you think you have? Have you actually got them?
    • Importance of correctly documenting terms
    • How are you intending to exploit the rights? What are the key terms?
    • Enforcement as a means of maintaining and developing value
  • 35. What rights do you have? Do you actually have them?
    • Copyright, trade mark, design right, patent, know how, trade secret
    • Ownership
    • Protection
      • Rights that can’t be registered
      • Rights that can be registered
      • Confidentiality
  • 36. Documenting the terms
      • Memorandum of Understanding / Heads of Terms
      • Document the terms accurately in a binding agreement
      • Thinking of divorce when getting married
  • 37. Methods of exploitation and key documentation
    • Sale – Business Sale Agreement, Share Sale Agreement, Assignment
    • Classic Licence – Licence Agreement
    • Joint Development and Exploitation – Development Agreement
    • Joint Venture – Joint Venture Agreement
    • Franchise – Franchise Agreement
  • 38. Key terms
    • Rights – exactly what is being dealt with?
    • Exclusivity – is the right exclusive or non-exclusive?
    • Territory – is the right restricted to a territory?
    • Duration – what is the length of the contract? Are there renewal terms?
    • Breach – reduction in territory / termination / reduce rights
    • Payment – royalty / guaranteed payments / equity / mix
  • 39. Enforcement rights in contract
    • Knowing a right or contract is well enforced can deter third parties from infringing and increase IP value
    • Notification of infringement / providing assistance with actions / contribution to cost
    • Interest – how is it calculated?
    • Dispute Resolution – is there a procedure?
    • Termination – breach / material breach?
    • Governing law – English law and English jurisdiction?
  • 40. Case Study
    • Well know brand in the UK fashion industry:
      • number of outlets and concessions in UK, typically licensing model;
      • very experienced in negotiating;
      • wanted to expand internationally;
      • strong bargaining position.
  • 41. Case Study (Contd.)
    • Rights – trade marks (registered and unregistered);
    • Model – combination of classic licensing with joint venture;
    • Key terms – Exclusivity, guaranteed payments and royalties, termination;
    • Enforcement – rights now registered in China. Chinese firm to assist enforcement
  • 42. Alex Hall, Senior Solicitor
    • [email_address] 020 7665 0813
    Lawyers & Parliamentary Agents
  • 43.