Rodney D. Ryder Kochhar & Co Strategies in the creation of Intellectual Property Assets Rodney D. Ryder Kochhar & Co

Rodney D. Ryder Kochhar & Co Part I - <Define your goals> • Managing the knowledge revolution Part II - <Strategies>: Strategic Intellectual Property Development • Defining Strategic goals Part III: Harvesting Intellectual Property Assets Introduction - Structure

Rodney D. Ryder Kochhar & Co Managing Intellectual Property Define your goals

Rodney D. Ryder Kochhar & Co Managing Intellectual Property in the Organization What you want out of your IP will vary from business to business. It will depend on your companies position in the marketplace, the types of products or services that you sell and the philosophy of the management No one size fits all Raise questions, review results and develop a goal and a strategy based upon the answers to the questions

Rodney D. Ryder Kochhar & Co Three basic uses of Intellectual Property • Defensive: Creation and protection of Intellectual Property to improve market position • Income creating: With the need to increase profits, most large companies have come to realize that a defensive posture, while important, is not always sufficient. To obtain the maximum value from their assets, they need to develop licensing strategies that provide additional income • Strategic: Truly creative companies use IP as a business tool to leverage their entrance into a new product and geographic areas and as a bargaining chip in business deals

Rodney D. Ryder Kochhar & Co The changing value of Intellectual Property • Today revenues from licensing, litigation and settlement of US Patents are over $100 billion versus $3 billion in 1980 • In 2001, IBM received over $1.7 billion from patent licensing, up from $ 30 million in 1991 • A recent study found tangible assets currently to be about 25% of industrial companies’

Rodney D. Ryder Kochhar & Co Some basic questions [that need answers!] • Should you license within your core business? • Should you look for licensing outside of your core business? • How should you package your IP to maximize your licensing income? • Should a separate business unit be created to maximize the value of your IP?

Rodney D. Ryder Kochhar & Co Licensing Competitors of your core business • What is your company’s strategic goal: market share v. income? • How fast does technology change in your marketplace? • What is your profit margin and how does it compare to your competitors? • Is it useful [necessary] to have alternate sources for your product? • Have you maxed out your market share? • Is it likely that you will be able to discover infringements of your patents?

Rodney D. Ryder Kochhar & Co Licensing outside of your core business • Do you have technology that is useful in areas outside of your core business? • How do you find potential licensees? • How should you package your technology?

Rodney D. Ryder Kochhar & Co Strategic uses of Intellectual Property • Do you need technology from other competitors? • Do you want to set up a strategic partnership with any competitor? • Do you want to expand into other product lines or geographic areas?

Rodney D. Ryder Kochhar & Co <Strategies>: Strategic Intellectual Property Development Designing a system to achieve strategic goals

Rodney D. Ryder Kochhar & Co Consider setting up a separate business unit • Manage your intellectual property the way you would manage any other critical asset of your company • Set up a dedicated business unit who’s mission is to achieve the defensive, licensing and strategic goals set by the management • The business unit should have a mission statement indicating, inter alia, its income and strategic goals • The business unit should be run like any other business unit and should have a budget sufficient for it to reasonably achieve its mission • The business unit should interface with managers of the product lines to ensure that its activities do not conflict with the legitimate interests of the company’s core business

Rodney D. Ryder Kochhar & Co Strategic patenting • Patent issues should be taken into account before the decision is made to start an R&D programme • Examine the patent portfolio of competitors • How likely are you to obtain meaningful patent protection for your product line? • Should you be developing inventions to build a wall around other patents owned by your own company or your competitor? • Are you trying to develop solutions to problems that are likely to be faced in other industries? • Should certain inventions be developed for their licensing potential even though the company has decided to go another route?

Rodney D. Ryder Kochhar & Co The Team: Who should decide on IP issues The strategic and licensing goals as integral The R&D decisions should be made by a combination of engineers, product managers, licensing personnel and the IP department

Rodney D. Ryder Kochhar & Co Identifying patentable inventions • Don’t wait for inventions to percolate up to the IP department • Consider setting up an engineering team dedicated to identifying and documenting inventions • The IP department should meet with the engineers early and often,. The sooner an invention is identified and a patent application is filed the better

Rodney D. Ryder Kochhar & Co Identifying patentable inventions When a concrete embodiment has been developed: • Inventor’s disclosures tend to focus in on the specific application he or she was working on • Brainstorm with inventor to see what other product areas the idea [including those outside of your commercial space] can be used in • Consider ways that competitors can design around the invention and patent those alternatives

Rodney D. Ryder Kochhar & Co Harvesting Intellectual Property Assets

Rodney D. Ryder Kochhar & Co Build a database • Too many organisations with extensive patent portfolio have no idea of what they own • Make an investment to develop a searchable database with both bibliographic information and relevant information concerning: [a] field of the invention; [b] breadth of the claims; [c] commercial importance of the invention; [d] likely infringement; [e] basic v. improved patent; [f] problems solved by the invention; [g] sample drawing; [h] abstract of the patent

Rodney D. Ryder Kochhar & Co Short term strategies Discuss with development groups and ask them to identify areas of technical development where they believe they have developed important intellectual property: Technology developed early in a business cycle Technology which has become the industry standard Technology which gives you an important advantage over competitors Technology which has application outside of your core business area Once you have narrowed down the likely areas of importance, analyze the claims and identify the most important patents

Short term strategies

Discuss with development groups and ask them to identify areas of

technical development where they believe they have developed

important intellectual property:

Technology developed early in a business cycle

Technology which has become the industry standard

Technology which gives you an important advantage over competitors

Technology which has application outside of your core business area

Once you have narrowed down the likely areas of importance, analyze the claims and identify the most important patents

Rodney D. Ryder Kochhar & Co Intellectual Property: examining the rewards • Identify any known or suspected infringers • Identify any competitors in the business or technology space who are adversely affecting the business position • Evaluate the economic justification for licensing the technology and/or enforcing the patent[s] • Identify any emerging companies with technologies, product lines or market placement which you would like to acquire or partner with • Develop and carry out a carefully considered and well funded programme to achieve your goal

Rodney D. Ryder Kochhar & Co Any questions? ?

Rodney D. Ryder Kochhar & Co Technology, Media and Communications Rodney D. Ryder Partner Kochhar & Co [email_address]