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Creating Value from Intellectual Property:
Legal and Contractual Aspects
Rodney D. Ryder
Rodney D. Ryder

Scriboard

1
Creating Value from Intellectual Property:
Part II – General Intellectual Property and Legal Issues
• Law and ‘Competitive...
The Intellectual Property Management System
•

Identifying the Opportunity – the business and the role of IP [the
enabling...
Capturing and Harvesting Value
•

Property – penalises monopolies [in general]; liberal in granting
‘legal monopolies to e...
‘Five Factors’: the legal touchstone
•

The Merits;

•

Public Legitimacy;

•

Strategic Position;

•

Resources;

•

Acce...
Level One – Defend Position
•

Ensure that IP is identified and protected

•

Create processes for IP generation

•

Creat...
Level Two – Manage Costs
•

Relate the IP portfolio to the business [the test of relevance]

•

Create an Effective Screen...
Level Three – Capture Value
•

Define the Value to be obtained from IP

•

Develop the Strategy to Capture Value in terms ...
Level Four – Synthesize Opportunities
•

Understanding the Relationship between Invention and Innovation

•

Managing IP R...
Level Five – Shape the Future
•

Define the Context – the comparative position, market share,
supporting R&D programmes

•...
Compliance as ‘Strategic Strength’
•

Comply with all laws – Start with ethics and start at the top;

•

Understand duties...
The Licensing Agreement: Defining and Strengthening
Relationships
•

Elements of a valid contract [as a legal instrument c...
Understanding the ‘Intangible Edge’
•

Capture the value of Intellectual Capital – Who owns the Idea?

•

Intellectual Pro...
Owning and Protecting the Brand: the Franchisor –
Franchisee Partnership
•

Corporate Reputation, Brands, Trademarks and D...
The Franchise Ecosystem - I
•

Preamble

•

Interpretations and Definitions

•

Scope and specifications

•

Terms of paym...
The Franchise Ecosystem - II
•

Warranty

•

Indemnification

•

Intellectual Property

•

Termination

•

Confidentiality...
Examining
Issues] - I

the

Franchise

Relationship

[Contractual

•

Is the license exclusive, i.e. granted to only one p...
Examining
Issues] - II

the

Franchise

Relationship

[Contractual

•

Who pays for prosecution and maintenance of any IP ...
Examining the
Issues] - III

Franchise

Relationship

[Contractual

•

Does the license contain a clause which allows for ...
Examining the
Issues] - IV

Franchise

Relationship

[Contractual

•

If sub-licensing is permitted what payment does the ...
Examining
Issues] - V

the

Franchise

Relationship

[Contractual

•

Does the licensor agree to provide essential “know-h...
Any questions?

Rodney D. Ryder

Scriboard

22
Legal Services

Technology, Media and Communications
Technology, Media and Communications

Structuring the Franchise Agree...
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Scriboard® - Creating Value from Intellectual Property [India]

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Scriboard® - Creating Value from Intellectual Property [India]

  1. 1. Creating Value from Intellectual Property: Legal and Contractual Aspects Rodney D. Ryder Rodney D. Ryder Scriboard 1
  2. 2. Creating Value from Intellectual Property: Part II – General Intellectual Property and Legal Issues • Law and ‘Competitive Advantage’ • Compliance as ‘Strategic Strength’ • The ‘Intangible Edge’ Part II – The IP Agreement: Defining and Strengthening Relationships • Best Practices • The IP Agreement Rodney D. Ryder Scriboard 2
  3. 3. The Intellectual Property Management System • Identifying the Opportunity – the business and the role of IP [the enabling role of IP] • Invent – Create an Invention – Ideate and Harvest • Screening – Pick and Choose among Inventions • The ‘Decision’ – to file or not • ‘Make’ [or buy] – the Facebook Strategy [create internally, buy pre-existing IP, commission an external source] Rodney D. Ryder Scriboard 3
  4. 4. Capturing and Harvesting Value • Property – penalises monopolies [in general]; liberal in granting ‘legal monopolies to encourage innovation and development’; • Value Capture – the methodology – [a] ‘productize’ the patent; [b] ‘monetize’ the patent; [c] ‘litigate’ the patent; [d] ‘positioning’ – use the patent for competitive blocking • Legal capabilities – specialised legal capabilities [resources and skills] allows us to spot opportunities, take initiatives and defend against legal actions Rodney D. Ryder Scriboard 4
  5. 5. ‘Five Factors’: the legal touchstone • The Merits; • Public Legitimacy; • Strategic Position; • Resources; • Access Rodney D. Ryder Scriboard 5
  6. 6. Level One – Defend Position • Ensure that IP is identified and protected • Create processes for IP generation • Create processes for enforcing IP [including litigation] • Create educational programmes regarding IP and the link to business value • Best practices – [a] auditing what you own; [b] Obtaining and Maintaining IP; [c] Building IP Awareness; [d] Defending the IP Portfolio Rodney D. Ryder Scriboard 6
  7. 7. Level Two – Manage Costs • Relate the IP portfolio to the business [the test of relevance] • Create an Effective Screening Criteria • Manage the Portfolio in a Cost Conscious Manner • Decisions – ‘make versus buy’ Rodney D. Ryder Scriboard 7
  8. 8. Level Three – Capture Value • Define the Value to be obtained from IP • Develop the Strategy to Capture Value in terms of – [a] arenas – where will the organization be active? [products, markets, segments, geographic areas, core technologies]; [b] vehicles – how will it get there? [internal development, joint ventures, licensing/franchising, acquisitions]; [c] differentiators – how will returns accrue? [lowest costs, premium pricing]; [d] stages – in what sequence the organization act? How fast? [e] success measurement – how will a victory be measured? [image, price, styling, product reliability] • Organize to Capture Value • Develop Metrics for IP reporting Rodney D. Ryder Scriboard 8
  9. 9. Level Four – Synthesize Opportunities • Understanding the Relationship between Invention and Innovation • Managing IP Risks and Trade-Off – [a] innovation risk [technology risk, alternative/disruptive technology risk, adoption risk, execution risk, market risk, infringement risk]; [b] ‘environmental risk’ [judicial risk; legislative risk; regulatory risk]; [c] intrinsic patent risk [validity risk, enforceability risk, scope risk, design-around risk] Rodney D. Ryder Scriboard 9
  10. 10. Level Five – Shape the Future • Define the Context – the comparative position, market share, supporting R&D programmes • Influence the future [strategic alliances, joint ventures and/or collaboration, marketing, public relations] Rodney D. Ryder Scriboard 10
  11. 11. Compliance as ‘Strategic Strength’ • Comply with all laws – Start with ethics and start at the top; • Understand duties and the exposure to risk; • Implement appropriate controls and processes; • Prevent fraud; • Compete hard but fairly; • Convert constraints into opportunities; • Educate all members and distribute written policies • Be prepared to deal with compliance failures Rodney D. Ryder Scriboard 11
  12. 12. The Licensing Agreement: Defining and Strengthening Relationships • Elements of a valid contract [as a legal instrument chosen to define and govern the parties’ rights and obligations] • Contracting Authority • Define and Strengthen Relationships [meeting of minds, don’t omit critical facts, don’t make promises you can’t keep, act in good faith and deal fairly with others, put agreements in writing, when you don’t understand it, don’t sign it] • Contracts permit the allocation of risk and reward Rodney D. Ryder Scriboard 12
  13. 13. Understanding the ‘Intangible Edge’ • Capture the value of Intellectual Capital – Who owns the Idea? • Intellectual Property and Employee Incentives • Choosing the Best Protection – Patents, Copyright, Designs, Trademarks and/or Trade Secrets] • Intellectual Property Questions – What is distinctive about our product or service? Do we have any ‘secret ingredients’ in our supply chain or final product? Brand protection – names, colours or sounds? Original Text or graphics, training handbooks? Rodney D. Ryder Scriboard 13
  14. 14. Owning and Protecting the Brand: the Franchisor – Franchisee Partnership • Corporate Reputation, Brands, Trademarks and Domain Names • Brands and the importance of Trust • Managing Product/Service Liability Risk [Product Defects, Implement a Product Safety Programme] • Consider Apologising for Mistakes Rodney D. Ryder Scriboard 14
  15. 15. The Franchise Ecosystem - I • Preamble • Interpretations and Definitions • Scope and specifications • Terms of payment • Taxes and duties • Force majeure • Defaults and liquidated damages • Audits Rodney D. Ryder Scriboard 15
  16. 16. The Franchise Ecosystem - II • Warranty • Indemnification • Intellectual Property • Termination • Confidentiality • Survival • Applicable laws • Effective date • Notices • Signatures Rodney D. Ryder Scriboard 16
  17. 17. Examining Issues] - I the Franchise Relationship [Contractual • Is the license exclusive, i.e. granted to only one person, or nonexclusive? • Can the licensee sub-license? • Are there any limitations to the license e.g., geographic or territorial?, minimum sales, minimum production requirement etc? • What is the amount, frequency, and form of payment, e.g. either lump sum or by way of royalty, or both, or other payment schedule? Rodney D. Ryder Scriboard 17
  18. 18. Examining Issues] - II the Franchise Relationship [Contractual • Who pays for prosecution and maintenance of any IP (patents, trade marks, designs)? • How are any developments, modifications or improvements to be protected and who owns them? In whose name will the applications be made in? • Are there specific clauses relating to co-operation of licensor in matters relating to the IP such as infringement? • Who pays for any matters such as preparation of the license, recordal of licensee, etc? Rodney D. Ryder Scriboard 18
  19. 19. Examining the Issues] - III Franchise Relationship [Contractual • Does the license contain a clause which allows for the license to be cancelled if the IP is not being used? • What is the term of license? • Is there a right to renew? • What are the conditions of termination? • When are royalty or other payments due? Rodney D. Ryder Scriboard 19
  20. 20. Examining the Issues] - IV Franchise Relationship [Contractual • If sub-licensing is permitted what payment does the licensor receive? • What information is the licensee committed to providing to the licensor? • What happens if the IP under which the license is granted is refused, infringed, opposed, revoked or other? • Is copyright a consideration? • Does the licensee agree not to challenge the validity of the patent? Rodney D. Ryder Scriboard 20
  21. 21. Examining Issues] - V the Franchise Relationship [Contractual • Does the licensor agree to provide essential “know-how”? • What provisions for any “hardware”, should the license be terminated? • How will any disputes be resolved? • What happens in the event of death of one of the parties? Rodney D. Ryder Scriboard 21
  22. 22. Any questions? Rodney D. Ryder Scriboard 22
  23. 23. Legal Services Technology, Media and Communications Technology, Media and Communications Structuring the Franchise Agreement: Legal and Contractual Aspects Rodney D. Ryder Scriboard rodney@scriboard.com

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