The document discusses patent valuation and identifies key issues:
1) The role of patent valuation across strategic planning, M&A, and litigation
2) Challenges in identifying patent values given accounting treatment of intangibles
3) Methods for establishing patent values including cost, investment, blocking, and monopoly values using qualitative analysis and real options approaches like the Black-Scholes model.
MintKit Growth Index: A Benchmark of the Stock Market for Sprightly Growth at...MintKit Institute
The ideal of investment lies in a robust strategy for high growth at low risk. Granted, a perfect solution could never emerge in an imperfect world such as ours. Even so, certain approaches toward the objective make more sense than others.
By received wisdom, the leading benchmarks of the stock market are cogent and meaningful portraits of the action on the bourse. Sadly, though, the reality differs greatly from the mirage.
For starters, the renowned indexes track the stocks in the prime of their lives rather than the entirety of their lifespans. In the process, the yardsticks gloss over the fact that death is the way of life for all companies along with their equities. The outcome is a grossly distorted picture of the payoff for the entire throng of shareholders over the long range.
Even in the near term, the traditional benchmarks have little or no bearing on the mass of participants. For instance, many an index monitors a group of stocks according to their market caps. While this approach may befit a profile of the bourse as a whole over the short run, the unbalanced scheme has scant relevance to the thoughtful investor who is most unlikely to load up their portfolios according to the market caps of the stocks at hand.
For these and other reasons, the traditional benchmarks are unsuitable as beacons for the investing public. Instead, a worthwhile index should address the true concerns of serious investors in areas ranging from pertinent metrics to workable strategies.
An example of a fruitful scheme involves the equal weighting of stocks within a benchmark. The benefits lie in conceptual elegance as well as practical relevance for the participants. Another drawcard is the tendency of uniform weighting to deliver higher returns compared to the labored scheme based on market caps.
In seeking a trusty path, a basic step is to canvass the timeworn benchmarks in multiplex areas ranging from conceptual soundness and logical rigor to common sense and pragmatic import. The wholesome assay then leads to guidelines for designing trenchant beacons suited to investors in tending their private portfolios. The enhanced framework is showcased by the MintKit Growth Index: a model benchmark geared toward promising stocks poised for zesty growth at modest risk.
MintKit Growth Index: A Benchmark of the Stock Market for Sprightly Growth at...MintKit Institute
The ideal of investment lies in a robust strategy for high growth at low risk. Granted, a perfect solution could never emerge in an imperfect world such as ours. Even so, certain approaches toward the objective make more sense than others.
By received wisdom, the leading benchmarks of the stock market are cogent and meaningful portraits of the action on the bourse. Sadly, though, the reality differs greatly from the mirage.
For starters, the renowned indexes track the stocks in the prime of their lives rather than the entirety of their lifespans. In the process, the yardsticks gloss over the fact that death is the way of life for all companies along with their equities. The outcome is a grossly distorted picture of the payoff for the entire throng of shareholders over the long range.
Even in the near term, the traditional benchmarks have little or no bearing on the mass of participants. For instance, many an index monitors a group of stocks according to their market caps. While this approach may befit a profile of the bourse as a whole over the short run, the unbalanced scheme has scant relevance to the thoughtful investor who is most unlikely to load up their portfolios according to the market caps of the stocks at hand.
For these and other reasons, the traditional benchmarks are unsuitable as beacons for the investing public. Instead, a worthwhile index should address the true concerns of serious investors in areas ranging from pertinent metrics to workable strategies.
An example of a fruitful scheme involves the equal weighting of stocks within a benchmark. The benefits lie in conceptual elegance as well as practical relevance for the participants. Another drawcard is the tendency of uniform weighting to deliver higher returns compared to the labored scheme based on market caps.
In seeking a trusty path, a basic step is to canvass the timeworn benchmarks in multiplex areas ranging from conceptual soundness and logical rigor to common sense and pragmatic import. The wholesome assay then leads to guidelines for designing trenchant beacons suited to investors in tending their private portfolios. The enhanced framework is showcased by the MintKit Growth Index: a model benchmark geared toward promising stocks poised for zesty growth at modest risk.
This presentation deals with the different methods of measuring brand equity, focusing on the method adopted by Interbrand, one of the most famous business agencies in the world.
Current and popular methods to value a corporate brand, although traditionally deemed as being adequate or “passable” for financial reporting purposes (hint: relief-from-royalty method to value trademarks), are far less than sufficient when it comes to measuring the full value of this intangible asset.
The Residual Contribution Method for valuing corporate brands is designed to minimize the high level of irrelevance, subjectivity, as well as lack of practicality that are inherent in the existing population of models, by systematically exploring the relation between a business enterprise, its underlying key intangible assets, goodwill, and ultimately, corporate brand value.
The valuation of a corporate brand, which can be viewed in many cases as one of the most valuable assets held by a corporation, is a function of thoroughly identifying, isolating, and quantifying the economic value of that complex array of intangible asset forces that make up a business enterprise.
Generics Threats And Opportunities: Mounting an Effective Defense Strategy ...Eularis
After years of relatively easy blockbuster profits, worldwide respect and investment, and loyal customer bases, branded pharmaceutical companies are in trouble, increasingly vulnerable to the threats posed by the competition.
And who is that competition? It’s not other branded companies any more. Generics have emerged as the primary challenger to pharmaceutical industry success, offering a public hungry for medications and reduced costs exactly what they want and need. Generics have exploded in the last decades, and are poised for even bigger growth.
The situation is grim. It can seem like pharmaceutical companies have no recourse in the face of the lower prices and operating costs of the generics industry, and fortunes will only continue to fade.
But options do exist for pharmaceutical companies to mount an effective defense strategy against the threats posed by generics.
In this report, we examine some of these defensive strategies. We analyze the environment for pharmaceuticals today, as well as the generic industry as a whole.
We describe the pros and cons of legal defensive strategies, as well as opportunities to expand the revenue-generating product life cycle into reformulations and over-the-counter medications.
We look at pricing strategies, as well as company organizational changes as part of an integrated defense strategy.
And to help companies make tough decisions about the best defense, we examine powerful analytics techniques and case studies.
When do drug patents expire and when can generic drugs launch?thinkBiotech
From DrugPatentWatch.com - When do drug patents expire, and when can generic drugs launch? An overview of patents, non-patent regulatory exclusivities, and specific US and EU factors influencing generic drug launch.
Brands are an important asset that generates value either for customers or for shareholders. That value generates inflows of cash flow> There are different methods and this is a compact and efficient method>
This presentation deals with the different methods of measuring brand equity, focusing on the method adopted by Interbrand, one of the most famous business agencies in the world.
Current and popular methods to value a corporate brand, although traditionally deemed as being adequate or “passable” for financial reporting purposes (hint: relief-from-royalty method to value trademarks), are far less than sufficient when it comes to measuring the full value of this intangible asset.
The Residual Contribution Method for valuing corporate brands is designed to minimize the high level of irrelevance, subjectivity, as well as lack of practicality that are inherent in the existing population of models, by systematically exploring the relation between a business enterprise, its underlying key intangible assets, goodwill, and ultimately, corporate brand value.
The valuation of a corporate brand, which can be viewed in many cases as one of the most valuable assets held by a corporation, is a function of thoroughly identifying, isolating, and quantifying the economic value of that complex array of intangible asset forces that make up a business enterprise.
Generics Threats And Opportunities: Mounting an Effective Defense Strategy ...Eularis
After years of relatively easy blockbuster profits, worldwide respect and investment, and loyal customer bases, branded pharmaceutical companies are in trouble, increasingly vulnerable to the threats posed by the competition.
And who is that competition? It’s not other branded companies any more. Generics have emerged as the primary challenger to pharmaceutical industry success, offering a public hungry for medications and reduced costs exactly what they want and need. Generics have exploded in the last decades, and are poised for even bigger growth.
The situation is grim. It can seem like pharmaceutical companies have no recourse in the face of the lower prices and operating costs of the generics industry, and fortunes will only continue to fade.
But options do exist for pharmaceutical companies to mount an effective defense strategy against the threats posed by generics.
In this report, we examine some of these defensive strategies. We analyze the environment for pharmaceuticals today, as well as the generic industry as a whole.
We describe the pros and cons of legal defensive strategies, as well as opportunities to expand the revenue-generating product life cycle into reformulations and over-the-counter medications.
We look at pricing strategies, as well as company organizational changes as part of an integrated defense strategy.
And to help companies make tough decisions about the best defense, we examine powerful analytics techniques and case studies.
When do drug patents expire and when can generic drugs launch?thinkBiotech
From DrugPatentWatch.com - When do drug patents expire, and when can generic drugs launch? An overview of patents, non-patent regulatory exclusivities, and specific US and EU factors influencing generic drug launch.
Brands are an important asset that generates value either for customers or for shareholders. That value generates inflows of cash flow> There are different methods and this is a compact and efficient method>
You Need Defensive Patents but You Don't Have Any. Now What? A Case StudyErik Oliver
The setting is familiar: a large corporate asserter uses its patents against a smaller, high-growth company with no patents. Companies like Qualcomm, IBM, Nokia, and Microsoft regularly assert their patents. This case study describes how one of our clients included patent buying into their patent strategy to successfully defended against a corporate assertion by acquiring patents in the open market.
Patent Quality Isn't the Question. Patent Value Is the Question.Erik Oliver
Why is patent value a better metric to use to set patent strategy? What sources of patent value can be identified for high technology companies? We review how patents are used and how they can be valued based upon their use.
Finding Your Way From Patent Value to Return-On-Investment. A Patent Strategy...Erik Oliver
Our client’s executive team needed to better understand the investment and expected risk reduction return from their patent portfolio. We helped them build a financial model and direct their patent strategy using an approach where we identified and maximized patent value.
2016 Patent Market Report: Patent Prices and Key Diligence DataErik Oliver
In this publication from IPWatchdog the ROL Group team takes a look at what patent buyers and sellers should expect from the current market. We offer comprehensive pricing analysis to determine whether your estimations for patents are in the ballpark.
An expected value analysis to determine the value of purchasing particular patents for defensive use in anticipation of expected litigation from a a competitor. We look at the value of individual patents as well as a portfolio of patents and examine at what point purchasing further patents is of no value.
Similar to Patent Values in the Evolving IP Market (20)
LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
Have you ever heard that user-generated content or video testimonials can take your brand to the next level? We will explore how you can effectively use video testimonials to leverage and boost your sales, content strategy, and increase your CRM data.🤯
We will dig deeper into:
1. How to capture video testimonials that convert from your audience 🎥
2. How to leverage your testimonials to boost your sales 💲
3. How you can capture more CRM data to understand your audience better through video testimonials. 📊
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challengesHolger Mueller
Holger Mueller of Constellation Research shares his key takeaways from SAP's Sapphire confernece, held in Orlando, June 3rd till 5th 2024, in the Orange Convention Center.
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
Recruiting in the Digital Age: A Social Media MasterclassLuanWise
In this masterclass, presented at the Global HR Summit on 5th June 2024, Luan Wise explored the essential features of social media platforms that support talent acquisition, including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok.
Premium MEAN Stack Development Solutions for Modern BusinessesSynapseIndia
Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
Know more: https://www.synapseindia.com/technology/mean-stack-development-company.html
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
Improving profitability for small businessBen Wann
In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
Good afternoon…For this section of the briefing there are four major topic areas I would like to cover: No. 1 is the question of what patent values are and what role does a “patent valuation” appraisal play in your companies and/or your practices No. 2 then drills down into the key step of actually identifying the patents from an analysis of a company’s public financial information Third, I’ll touch on another critical component of a valuation analysis, and that is the determination of royalty rates, with particular attention to the due diligence surrounding business transactions involving patents, and finally… In fourth place I’ll talk a little bit about the valuation of patents in a litigation environment
At first glance, it seems clear that everyone involved in business and patent law would have an intuitive understanding of what is meant by “patent value”. However, some may emphasize value from a technical perspective, others may be thinking of the validity and legal value of a patent, while financial folks will clearly be thinking about the economic value of a patent. Technical value and legal value actually have very specific goals and, although they may be necessary components of an evaluation of a patent portfolio, are substantially subjective and not enough to be the basis of financial decision making. The economic value of a patent, which is the sense of value we want to talk about today, is meant to be a somewhat objective value, the current value of the economic profit that a patent can generate during its statutory life span if put into practice commercially. Obviously, if patent values where that simple, you wouldn’t have paid good money to listen today…right? Let’s leave the nitty-gritty of how a patent’s economic value is calculated for later, and get a sense first of how much patents are typically worth. [Ray has already talked about the values reached in the recent auctions…but] in most, if not all, studies of patent values around the world, the most striking and common finding seems to be the fact that valuable patents are the minority, and that most are not worth very much. For instance, around the turn of the century, the 21 st century that is, a survey of patent value studies found that, in the USA and Germany (specifically) the top 10% of patents represented over 80% of the value. What’s more, For US universities in particular, the top 10% of institutions represented over 90% of patent values. If we picture a bell-curve distribution, like the one teachers use to bump-up grades, patent values are really not distributed in a nice normal symmetric way, rather, their distribution is skewed to one side, so that most of the value is concentrated in a few very valuable patents, and tapers off toward most patents having lesser values.
A more recent study by the European Union in 2005 found that for Germany, Spain, France, Italy, the Netherlands, and the United Kingdom, the same concentration applies. In the UK for example, more than 50% (53%) of patents are worth less than 1 million Euros (just under $1.4 million USD), another 25% are worth between 1 and 3 million euro (1.4 – 4.2), and only 10% are worth more than 100 million Euros (136 milion dollars). This is all the more remarkable if you consider how much pharmaceutical R&D costs, billions, how many drugs don’t pan-out, and how important pharmaceutical patents are generally considered to be.
Now, patents are generally recognized as a business asset, and many characteristics of a patent are paralleled by other relatively intangible assets (like financial assets in particular promises-claims) , a big problem is that patent values cannot be observed directly, we can’t look them up on the wall street journal like stocks and bonds. It requires a specialized study. But, even if it can be easily observed, the value of a company's patent portfolio plays an important role is many decision making functions: Strategy, where to invest in the future, what to acquire, what to spin off. Throughout the planning and m&a process, an idea of the value of what the company owns, what it can acquire, what it can sell in terms of businesses. Even outside of biotech, where patents are sometimes the only product of a company, how can one advise a company on how much to pay for an acquisition…not only do we have to do the due diligence to check on what the target actually owns, and how valid it may be,…in the end the deal is closed based on an amount of money. And after a transaction, there’s the financial reporting requirements, and with FASB 141, 142, 144 you don’t want to overestimate the value of patents that have been acquired based on what the seller though about them, and then deal with disclosing impairment charges. SO…patent values play a central role in linking patenting activity into business strategy and transactions.
Now, on to the second topic area…identifying patents for valuation… The first obstacle to determine the value of patents is the reality of GAAP: internally generated intangibles, like patents, are recorded as expenses (although there are special rules for R&D in process) and are not recorded as assets on the balance sheet. Even if we were to get all the expense related to a company’s patents, conventional accounting practice would only be recording their historical cost. A key economic principle is that historical cost is not economic value. You need to account for inflation, market changes, technical obsolescence, new applications, waste (excessive cost) to reflect the current value of the potential profit obtainable from the patent but, there’s more…Even if the patent is not practiced, it may well have a “blocking value” by keeping the competition from improving their products or methods.... The situation is, of course a little more complicated by the fact that, since at least 2001, acquired IP is now recorded at their allocated acquisition value, so company’s that grow by M&As have more itemized intangible value in their books, than company’s that develop their own technology. So…no all of the value of patents is reflected or reported in company financials, and even when they are reported, they may still not be the core technologies of a company, nor implemented. (this is still going to be true once FASB 157 comes into effect at the end of this year). One of the most striking things about this is that, according to some studies the overwhelming majority of the S&P500’s market value has to be attributed to intangibles (trademarks & patents mainly), in other words the book-to-market multiples are historically very high, not because stocks are overvalued, but because intangibles are not recorded in the books!
What to do then, to identify patent values. One step is to take time to analyze patent quality from an economic or financial perspective, to check which patents are actually relevant to the company’s current business, to the future strategy, and which support the company’s competitive position better. We typically have to segregate core and peripheral patents, to concentrate the valuation only on the core (the concentrated distribution is also present intra-company to some extent), and strategically, doing this also helps identify some patents that are non-core and can be monetized in some way (although this is a very difficult task). There is, of course an economic and financial aspect to the potential infringement of a patent portfolio, as long as the company can afford to enforce its rights of course… __________________________________ Anecdotes: C&A had car model by car model patents, very specific,…with limited use in a way because no one else would be manufacturing the same model/year and, contractually, if reassigned, the IP would travel with the contract to the new manufacturer. So only broader (eg, technique manufacturing processes) would have real economic value, or when coupled with trademarks (invisitec, acro-edge) etc. Others, motorola, malden mills metro one
AS far as quality indicators, which have a role in defining patent value, its important to review references back/forth and their assignements as they are good indicators of the market place where the invention or method can sell and, therefore, where it can be valued.
Now before getting bogged down in details, a valuation has to have clearly defined the concept of value that is going to be used, what is usually called the “std of value” There are many variations of standards but two stand out as central ones, what the IRS considers Fair market value, and what the FASB considers Fair Value. = definitions= The first one is obviously a “hypothetical” value, and it emphasizes full information on both sides…this can be very important in M&As and it’s the basis for tax purposes of course…The FASB definition implies a specific transaction, and will consider the synergies of the acquired and existing patent portfolios, and this is the basis for financial reporting. In a specific transaction however, buyer and seller may operate from a different point of view and knowledge about the patent, and value it very differently…
So…depending on the particular purpose of the analysis, the stage of the management process where it is used, and the destination of the result (CEO, IRS or SEC), the actual amount of value may reflect different considerations, building on cost, value if acquired, the value of reserving a technology for exclusive use, the value of blocking competitors, the value of first-to-market advantages, the value if licensed (actual license or opportunity cost). In any case, it is important that patents have economic value even if not in commercial use. All of the preceding considerations boil down to possibility of applying conventional asset-valuation methods cost / market / income which use a discounted cash flow approach to value. But, it’s important to recognize that there are many situations when those conventional methods may not be sufficient, particularly when: It is not yet commercialized When most of the investment expense has not happened, and is still being decided When the litigation value is important, or strategic blocking When the cost of maintaining the patents is a consideration (You don’t want to let a key patent lapse for “cost cutting”’s sake and then have a need for it…
The latest approach to those situations is to adapt the valuation of stock options to value patents. This approach seems to be more advanced in Europe than in the US, and there are opposing points of view about some key questions, but the general direction of valuation practice is that its use is more likely to be insightful than the traditional methods. This approach treats a patent not strictly as a financial asset, but as an intellectual property right.
IN this approach, a key concept about patent values is this:… Thus patent values can be expected to be higher in new technology industry segments, such as biotech, nanotech, and much less in stodgy traditional industries, which seems to underlie the valuation multiples of publicly traded companies in these industries, higher multiples for “growth” sticks, and lower ones for “value” companies. Another conclusion in these new methodologies is that patents seldom are worthless, until they approach the end of their lives, there is still a probability that the NPV of the implementation/litigation will be higher than the NPV of the investment that is still needed… In the downloadable materials I included some sample applications of this analysis, but here we just need to turn to two last areas to remark: Setting royalty rates Values in Litigation RRates, what is new in this area is the possibility of applying the real options approach to determine the proper rates fro a transaction, or even for transfer pricing. Briefly, we can use the same approach to value a license balancing the probability that, if the rate is too high, the licensee and the license will fail, and if its too low the licensor loses a lot of value. In litigation, the latest methods cannot be used, at least not until there is sufficient recognition of them. Valuation of patent infringement damages still maintains the use of the conventional discounted cash flow analysis, but sometimes the calculations of a reasonable royalty are greatly exaggerated, as in the recent Lucent Technologies et al. v. Gateway Inc. et al., (MP3 audio patent) decision of the district court for California’s southern district, which ordered Microsoft to pay $1.5 billion in damages based on a reasonable (sic) royalty of 0.5% of the value of the computers which had Windows installed! This is much more than those partial patents would reasonably be worth in the market ($1 to $3 milion) So a good valuation in litigation is worth, literally, billions !!! Thanks