Intellectual Property Monetization How to make Ireland number 1?<br />Fred Logue<br />
+                        =<br />
Source: IDA Horizon 2020<br />
Obsessive Focus on FDI<br />Source: Barry (2007)<br />
Source: Barry (2004)<br />
Source: Barry (2004)<br />
1986-1992 Deregulation of European Air Travel Markets<br />
2005 Changes to US Tax Law<br />
1987 Financial Globalisation 	<br />
1987 Financial Globalisation 	<br />
Intellectual Property is the legal right to control the results of creativity and innovation<br />
There’s a $50 billion-plus market in IP rights and licensing<br />IzharArmony, Charles Rivers Ventures<br />><br />
Patent Holder <br />Tech Develop Co<br />Private Invest Fund<br />Litigation Fund <br />Pat Licensing Co<br />Regional Dev...
Source: Acacia<br />
Source: Acacia<br />
Our approach enables our client network to manage patent litigation risks and costs through collective defensive patent in...
Acacia Research’s subsidiaries partner with inventors and patent owners, license the patents to corporate users, and share...
As the global leader in the business of invention and owner of one of the world’s largest and fastest-growing patent portf...
Europe is Scratching its Head about IP	<br />
But…<br />
Indigenous Irish firms are extremely unsophisticated in their use of Intellectual Property<br />
For managers in FDI companies IP is (generally) something done in head office with little or no visibility here<br />
2009 US Patents vs Market Cap<br />
Monetization<br />Collaboration<br />Isolation<br />Denial<br />Source: OECD<br />
S 291A Taxes Consolidation Act 1997<br />Commitment included in the Government's Economic Recovery Plan "Building Ireland'...
Allowance of 80%of capital expenditure on specified intangible assets against income arising from activities consisting of...
Therefore 2.5% effective corporation tax rate possible on IP income<br />
Established a Dublin-based European headquarters to better serve European customers, expand its intellectual property netw...
Established in Ireland as a springboard for expansion into Europe<br />Purchase of 400 patent assets from BT by German Pat...
Transferred management of DTS’s global client licensing program to Ireland enhancing its ability to serve global customers...
How do we attract IP activities andmake sure know-how is transferredto both indigenous and foreign companies?<br />
Services innovation will represent a significant area of growth, as different sectors converge and new solutions are devel...
fred.logue@newmorningip.com <br />(01) 254 2340 l www.newmorningip.com l @newmorningip<br />
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LES 9 september 2011

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Talk given to the Irish branch of the Licensing Executives' Society. Talk covers how intellectual property dynamics intersect with Ireland's FDI strategy.

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  • The official history from the IDA’s Horizon 2020 strategyFoundation of education, tax, NSS and SFI infrastructureProgression from MFG to Internet and R&amp;D with some projections for the future.What about the secret history it’s worth looking back in time a little bit more
  • The story starts much further back in the 1950s and the lowering of global barriers to trade combined with preparations to enter the EEC.From the mis 50s we encouraged manufacturing and exports with a 0% tax on profitsProgressed to join EEC and through negotiations with EEC introduced 10% tax on all MFG extended to Software and IFSC. This tax finanlly expired in 2010Began to advance our education systemLate 80s Single market/Telecoms infrastructure and Labour market reform12.5% tax rate agreed with EU and phased in 2000-2003Today transition to “Knowledge Economy” SFI and incentives.
  • Note even in 1980 Ireland on par with UK and twice EU averageBig acceleration in late 1990s
  • Corporate tax rate below average in 1980’s Again massive increase in 1990-Even with low rate we are still taking in a comparable amount in terms of GDB compared with EU-15
  • Tony Ryan started GPA in 1975 and grew it to a multibillion industryFailed flotationInvented securitisation of aircraft leasing 1992-1996Bought by GECASNow $86 billion under management in Ireland with 1000 people directly employed 60% salaries &gt; 100KSource Finfacts and Pat O’Brien KPMGGPA created a pool of talent20% of worlds aircraft leased thru Ireland
  • Financial strategyThis time backed by the govt with special tax breaks and other incentives related to locating in the IFSCSlow start over four years but now a massive successExample that has been rolled out all over the world.Nothing like it existed before. E.g. you always had NY and london etc but the idea to locate a sophisticated FS centre in one of the poorest EU countries was considered to be a joke at the time.
  • Now number 6 in the world in toerms of assets under management and growing
  • So back to the official story and what of the future.The IDA has identifid several areas e.g. clean tech cloud innovation etc And all driven forward by the smart economy for the next deaced.
  • But what about this IP TradingThere is no other mention in the IDA strategy and no other instance of this rubric on the iP website.So what I would like to do today is to expand on this element of IDAs strategy for the decade, tell you a little about the industry and offer a strategy for using this industry to cross-polinate both our indigineous SME sector and FDI manufacturing sector.
  • Often hear that an IP right allows the owner to prevent someone using their IPOf course this is correct but the IP right is far richer that that.It’s a bit like saying a property right gives you the right to prevent someone coming onto your land or into your building but obviously property rights are far more that that.IP can be use a very effective tool to control the results of creativity and innovation. Preventing use is one thing but it also allows you to permit use, to move the results around in a safe and profitable way etc.
  • It’s a huge and growing market.It’s bigger that online video games, SaaS and online gambling
  • RPX takes advantage of high patent litigation costs. Companies subscribe and are granted a licence to a portfolio and the money is re-invested to buy furhter patents.Intel, MS are part of this.
  • Acacia outsources the monetization of patent portfolios. Most companies do not have the level of sophistication to do this. Even big ones.On the other hand they are seeing a lot of money going on paying licence fees and now want the account to be balance with income from their own portfoliosThis is a billion company with 50 employees
  • The hundred poind gorilla.This company changed the way people look at patent licensinf and inventionWant to create a market. Buying and developing.They have recently opened an office in Dublin
  • Ireland needs to up it’s came. (or somebody else will)
  • Take away. Don’t waste this opportunity
  • So back to the official story and what of the future.The IDA has identifid several areas e.g. clean tech cloud innovation etc And all driven forward by the smart economy for the next deaced.
  • LES 9 september 2011

    1. 1. Intellectual Property Monetization How to make Ireland number 1?<br />Fred Logue<br />
    2. 2.
    3. 3. + =<br />
    4. 4. Source: IDA Horizon 2020<br />
    5. 5. Obsessive Focus on FDI<br />Source: Barry (2007)<br />
    6. 6. Source: Barry (2004)<br />
    7. 7. Source: Barry (2004)<br />
    8. 8.
    9. 9. 1986-1992 Deregulation of European Air Travel Markets<br />
    10. 10. 2005 Changes to US Tax Law<br />
    11. 11.
    12. 12. 1987 Financial Globalisation <br />
    13. 13. 1987 Financial Globalisation <br />
    14. 14.
    15. 15.
    16. 16.
    17. 17. Intellectual Property is the legal right to control the results of creativity and innovation<br />
    18. 18. There’s a $50 billion-plus market in IP rights and licensing<br />IzharArmony, Charles Rivers Ventures<br />><br />
    19. 19.
    20. 20.
    21. 21. Patent Holder <br />Tech Develop Co<br />Private Invest Fund<br />Litigation Fund <br />Pat Licensing Co<br />Regional Devel Fund<br />Securitization Firm<br />Defensive Pool<br />Private Co<br />Public Co<br />Patent Holdings <br />(# of patents)<br />Very Small <br />(≈ 100)<br />Very Large (10k +)<br />Patent Monetization Landscape – Key Players<br />Offensive Patent Strategy<br />Acacia <br />PLC<br />Round<br /> Rock<br />Mobile Pat. Trust<br />Rembrandt<br />Arca<br />Lemmelson<br />Altitude<br />Acacia IP Fund<br />Tessera<br />Sisvel<br />IPcom<br />WiLAN<br />Katz<br />InterDigital<br />Juridica<br />Walker<br />Digital<br />Alset IP<br /> GPC<br />Techquity<br />MMI<br />Intellectual<br /> Ventures<br />Via<br />Turtle Bay <br />Rambus<br />Mosaid<br />Intertrust<br />Ignite IP<br />Papst<br />Alpha Patent Funds<br />Coller<br />Capital<br />Paradox Capital<br />Using Self-Generated Patents/Rights <br />Acquiring Patents/rights <br />IP Gest<br />Credit Suisse<br />Paul Capital<br />Deutsche Bank<br />RPX<br />OIN<br />AST<br />Defensive Patent Strategy<br />Source: Coller Capital; Brody Berman, PatentFreedom<br />Notes:<br />1 – Does not include operating companies or life science holders.<br />2 – This graph is for illustration purposes and is not drawn to scale.<br />21<br />
    22. 22. Source: Acacia<br />
    23. 23.
    24. 24. Source: Acacia<br />
    25. 25. Our approach enables our client network to manage patent litigation risks and costs through collective defensive patent initiatives, superior patent intelligence, and special advisory services.<br />
    26. 26. Acacia Research’s subsidiaries partner with inventors and patent owners, license the patents to corporate users, and share the revenue. Acacia controls over 160 patent portfolios covering technologies used in a wide variety of industries<br />
    27. 27. As the global leader in the business of invention and owner of one of the world’s largest and fastest-growing patent portfolios, we are creating an active market for invention that connects buyers, sellers, and inventors.<br />
    28. 28. Europe is Scratching its Head about IP <br />
    29. 29. But…<br />
    30. 30. Indigenous Irish firms are extremely unsophisticated in their use of Intellectual Property<br />
    31. 31. For managers in FDI companies IP is (generally) something done in head office with little or no visibility here<br />
    32. 32. 2009 US Patents vs Market Cap<br />
    33. 33.
    34. 34. Monetization<br />Collaboration<br />Isolation<br />Denial<br />Source: OECD<br />
    35. 35.
    36. 36.
    37. 37.
    38. 38. S 291A Taxes Consolidation Act 1997<br />Commitment included in the Government's Economic Recovery Plan "Building Ireland's Smart Economy"<br />Encouraging companies to locate the management and exploitation of their intellectual property in Ireland<br />With the potential to create high-quality employment in the process.<br />IP Exploitation Incentivised<br />Revenue Tax Briefing (July 2010)<br />
    39. 39. Allowance of 80%of capital expenditure on specified intangible assets against income arising from activities consisting of managing, developing or exploiting specified intangible assets<br />Definition of Specified Intangible asset includes most forms of Intellectual Property<br />
    40. 40. Therefore 2.5% effective corporation tax rate possible on IP income<br />
    41. 41. Established a Dublin-based European headquarters to better serve European customers, expand its intellectual property network and grow licensing business worldwide<br />
    42. 42. Established in Ireland as a springboard for expansion into Europe<br />Purchase of 400 patent assets from BT by German Patent fund<br />
    43. 43. Transferred management of DTS’s global client licensing program to Ireland enhancing its ability to serve global customers<br />
    44. 44.
    45. 45. How do we attract IP activities andmake sure know-how is transferredto both indigenous and foreign companies?<br />
    46. 46.
    47. 47.
    48. 48. Services innovation will represent a significant area of growth, as different sectors converge and new solutions are developed management. <br />This ‘servicisation’ of companies offering new solutions will be an increasing source of new employment to 2014 and beyond.<br />
    49. 49. fred.logue@newmorningip.com <br />(01) 254 2340 l www.newmorningip.com l @newmorningip<br />

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