The document discusses the importance of intellectual property (IP) valuation and strategy. It notes that IP value is created through both internal and external contexts, and is influenced by organizational models, processes, structures, and culture. Effective IP management requires sophisticated processes for tracking IP through its lifecycle. An integrated approach is needed to help organizations strategically leverage their IP assets.

1. IP=
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4.  Where and how is IP value created?
 Focus on wider context – internal/external
 Importance of organisational models
processes/structures/culture
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5. 2
IP+IC = $
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6. Intellectual Capital
Human capital
Organisational Customer
capital capital
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7. IP
Human capital
IP
Organisational Customer
IP
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8. Customer
Human Structural
capital
Know-
How
+ ‘Business Models’
Legally Enforceable
Intellectual Property
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9. Innovation in business models...
 Henry Ford
 Toyota
 Apple OS
 Wal-Mart
 Microsoft OS
 McKinsey
 Nintendo
 iTunes
 Printers/ink
 Google
 Low cost
 Linux
airlines
 Amazon
 EBay
 McDonalds
...where does the value come from?

10. Visionary
Strategy requires
Organisational Capital
Integrated
Profit Centre
Cost Control
Defensive

11. Complexity of issues....
No
INTEGRATE
Yes
Yes No
Are competitors better
Opportunity to catch up?
placed to better exploit
opportunity?
Yes
Yes
Are resources availbale to No JV/ALLIANCE
No
Are critical assets available In-
build them?
House?
Yes
Yes
Does commercialisation No
Can need for specific assets
No OUT-LICENCE
require specific
be created?
CONTRACT
complimentary assets?
Yes
Yes
No
Is protection a competitive Is adequate IP Protection No
STORE
issue?? available?
Yes
No
Meets/Creates Market
Innovation STORE
need?
COMMERCIALISATION DECISION PROCESS
© 1998 Patrick H. Sullivan www.duncanhartconsulting.com

12. Sophisticated processes....
critical to strategy execution....

13. and data collection/management....
CFO’s IP Accounting and Valuation Data
INTERNAL IP MANAGEMENT
Terms
Source Market
Product/Product- Customer/Licensee Revenue/Offered
Documents Definition
IP Life Cycle
Line Identified Projections
Generated Analysis
R&D director
Market Definition; an important
Research work
assigns
determination of market value is the
program and Yes Likely Possible Possible
research
determination of primary and alternative
budget
project
markets where the IP may bring benefits. The
Researchers Actual versus
larger the defined markets become, the more
Yes Likely Possible Possible
status reports planned results
robust the value examination will be, and
consequently, the total value expected to be
Technical
Inventor
extracted from that IP.
disclosures;
submits request
Product or Product-Line Attributes: one
competitive Yes Yes Yes Likely
to patent
layer below the market analysis is the
research; budgets
committee
identification of specific product lines and/or
and ROI estimate
products impacted by the IP. In addition to
Patent the definition of potential markets and sub
markets, this information allows the refinement
committee Meeting minutes,
of market research so that actual quantities
committee
ranks and Yes Yes Yes Likely
and values per unit can be assembled.
approves/denie member notes
Customer/Licensee Identifiers: purchases
s funding
and sales lend themselves at the edification of
Validity research,
potential users of the IP. This information can
Inventor meets
prior analysis,
provide significant data that further support
with IP Likely Likely Yes Possible
inventor/assignee
the determination of the IP's value.
Counsel
report
Previous Estimates of Revenues: as part of
the justification provided by innovators and
Manufacturing
Inventor meets
product commercialisation decisions, innovation
type, cost
with
life cycle will often generate preliminary
projections, Yes Yes Yes Yes
development
estimates of value. Although the studies may
market/product
team not be current, the methodologies and the data
analysis
sources used by R&D, patent committees and
licensing personnel will provide meaningful
Licensing
IP licensing
assistance to the CFO staff as they prepare
strategies,
team meets
their IP value analysis.
triage/rank Yes Yes Yes Yes
with R&D and
targets, revenue
marketing staff
forecasts

14. Organisational forms - integration
Helps integrate IP into Corporate
strategies, coaches Board and CEO in IP
value creation CEO
HR
Confidentiality,trade secrets,restraint,'inventor' management/incentives
Marketing
Supports valuation and compliance functions - settlement - Brand/TM strategy and enforcement
licensing/sale structure, risk profile
CFO
Advises on deals, structure,JV assists set up and
Project/portfolio management of IP projects
Manager
IP protection,development
CTO/Engineering/R&D
General Counsel
New capabilities required of General Counsel - Interaction with Executive Team
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15. External ‘cultural’ infrastructure....
 Limited liability company
 Stock exchange
 Insurance
 Contract law and enforceability
 Modern management techniques
 New business models
 Marketing techniques
 Information technologies
 HR management
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16.  China – innovation is not enough
 Needham – 1930s
 Moveable type
 Stirrup
 Grafting
 Paper
 Canal technologies
 Compass
 Gunpowder etc
.....BUT NO INDUSTRIAL REVOLUTION.
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17. 2
IP+IC = $
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18. IP=
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CONSULTING