Success is Based on Several Factors and Single
Corporations Will Not Own All of Them
IPR as Innovation becomes more
Currency distributed and patents become
between the partners in innovation
value chains and business
Innovation + Effectively managed IPR = Shareholder value
Intellectual Legally protectable
+ Property = limited monopoly
Need + Innovation =
Securing IPR = owning the business position
Patents Are a Currency of Negotiations
Suppliers Organisation Customers
Technology Patents = IT
Competitive edge can seldom be achieved with Patents…often a
must have, when certain size has been achieved
Better use of patents, may give temporary competitive edge
Better patents may give temporary competitive edge
Business with bio/drug patents are totally different games with different
Power is Achieved with Patents
This will lead a growing number of companies to focus on and excelling
only in the core activities and to outsource the rest – often management of
IPR and also parts of R&D.
Small companies will succed only
when being agile and owning their
IP may help them through mid size
disaster. Major problem with large
customers; ”unlimited liabilities”
IP till you die
Economies of scale Large corporations will direct
Control / liabilites ecosystems having strongest IP
Master of the ecosystem controlling and enabling companies
to ”serve” their needs
Increase shareholder value
Change the reality and communicate it effectively
Acquisitions Exit Company /Stock price
Buy the business before Sell the company with the Licensing profit P/E 4-5 *
you buy the company business you own (Nasdaq)
Increasing long term profitability and lowering risks
= increasing shareholder value
FINANCIAL USES OF PATENTS
% of companies declaring “very important” factor for raising capital in total responding companies
Venture Private Stock Securitisation Negotiating loans Obtaining
capital investors market public
European companies subsidies
All 18 21 11 6 9 8
<=250 employees 22 27 11 6 10 10
>250 employees 11 10 9 6 7 4
(174 companies) 7 5 8 8 7 7
>1960 and <=2000
(174 companies) 17 21 11 4 6 5
(128 companies) 31 38 13 6 14 13
No of companies responding
285 290 281 281 284 285
Convincing venture capitalists and private investors are the two most
important; these are more important for smaller companies than for larger ones;
The size factor seems to be less relevant than the age factor: younger
companies, founded after 2000, give far higher importance to patents for raising
funds than older ones
OECD-EPO-TOKYO SURVEY 2009
Decisive role of IPR became acknowledged but a
significant portion of its value still remains unextracted
Intellectual Former CTO of Microsoft founded Intellectual Venture and raised $300
Ventures was the million to start the business. Now they have 12,000 patents and $5 billion
first real one equity. And they are now returning profits to investors
Imperfect markets and information asymmetries keep patent valuations
Window of low.
opportunity Better understanding of patents will create more liquid markets and
increase prices. Increasing demand has also increased patent prices.
Intangible assets’ Accounting standards; Profit impact increasing; major share in profits;
values increase global, investors value patents more.
European Patent Licensing – new players
Financial Services companies treating IP as an alternative asset:
- IP Bewertungs AG / Deutsche Bank >euro 100m: acquire inventions, create
proofs of principle, marketing back-up – and then sell them on…..
-The IP Group: UK public company. Buys an option on university IP – Oxford,
chemistry lab; York, Southampton etc., builds spin-offs, creates IPO’s
- BUT: BTG - now concentrating on life sciences, merged with Protherics
A University Technology Transfer Office has carried out an IPO – Imperial
- brave and unique: 89 equity investments, IPO of Ceres Power
Stick licensing Friendly licensing Tech tranfer
You can get a lot farther It is nice to chat and plan, “NIH – Not Invented Here”
with a kind word and a but big bucks not easily still very strong
gun than a kind word achievable
alone. Al Capone Cf. Procter and Gamble
Very expensive+risky, “PFE - Proudly Found
litigation in the US 2.5 m. Elsewhere”
Best results achieved with
strategic objectives with Time consuming and
stronger patent portfolio frustrating process, but
compared to target money can be made here,
company. with solid IP
Totally different games
Stick Licensing / Enforcement Carrot licensing
– Step change? -- Step change?
– Validated? – Validated?
– Market need?
– Cost and performance?
– Tech transfer support?
– Legal clarity?
– Market ready, value chain complete?
– Know-how, proof of principle
– Tech support available?
PATENT BUSINESS TECH TRANSFER WITH PATENTS
Licensing and R&D partnerships / Innovation Capitalist
Joint development – universities, companies, Innovation capitalists having co-ownership /
co-inventorship of (parts of) IP, which may be give problems
Licensing for minimal money but medium term R&D support for university
Companies creating portfolios for adding business value for the purpose of using patents as
currency in M&A deals.
Professional organisations IEEE etc- political and time consuming - “essential patents”
Private industry – MPEG-2, MPEG-4, GPS, CDMA, 3-G
IP / Business Strategy – what to do with it?
Why not monetize these?
High Value Patents They are costing you $$$
0% 5% 50%
Patent Valuation Parameters
• Market driven - Reads on an interesting technology area
• e.g. 802.11x
• e.g. FPGAs
• e.g. 4 G
• Is likely to be used
• e.g. MPEG-2
– Key feature
• e.g. EPGs for digital cable
Design Feature Blocking
– Design Choice Choice
• e.g. Moto’s clamshell phone Use
Patent sales – patent quality effects
• Well written spec and • Poorly written spec and claim
claim moves value up moves value down
Questions, please ask!
Feedback and questions always welcome!!
Page 21 Antti Kosunen email@example.com +358 400 850 200
Adding Shareholder Value
IPR Business Advisor
+20 M&A / fund raising projects
+40 Licensing projects
Deals done in +40 countries
+10 patent litigations in the US, Finland
CEO of a stock market company
Technology entpreneurial mindset,
Started / sold / listed companies
Page 22 firstname.lastname@example.org +358 400 850 200