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IP CommunicationIntellectualAssets, CorpApril 16, 2008
Increase Value with IP Communication
David McFeeters-KroneIntellectual Assets, CorpIP Strategy - Licensing - Tech Scouting
dmk@intelassets.com
IP CommunicationIntellectualAssets, CorpApril 16, 2008
Ground Rules & Caveats
• Patents are just part of the equation.• Communication is one part of IP
strategy• Dave is not a lawyer.
IP CommunicationIntellectualAssets, CorpApril 16, 2008
“Intellectual Property lies at the center of the modern company's economic success or failure”
- Lester Thurow
IP CommunicationIntellectualAssets, CorpApril 16, 2008
IP is Intangible Value
• Patents, trademarks, copyrights• Trade secrets
– Know how– Secrets– any work product not publicly known
IP CommunicationIntellectualAssets, CorpApril 16, 2008
Why have an IP Strategy?
Source Les Nouvelles 3/2006
QuickTime™ and aTIFF (LZW) decompressor
are needed to see this picture.
IP CommunicationIntellectualAssets, CorpApril 16, 2008
Benefits of the IP Strategy
• Legal– Freedom to operate– Cross licensing
• Market– Competitive advantage– Premiums
• R&D– Focus– Acceleration
• Finance– Clear explanation– Value preparation– Revenue (maybe?)
O - Offensive
X - Defensive
- Market InnovatorPatents, Trade Secrets
$ - Assertion
IP CommunicationIntellectualAssets, CorpApril 16, 2008
IP Strategy Components
• Internal– IP Audit– Patent / Trade Secret / Copyright / TM policies– Education
• External– Competitive Intelligence– Communication
• IP Council• Continual Review
IP CommunicationIntellectualAssets, CorpApril 16, 2008
Communication to Stakeholders
• We understand the value of our IP• We have an IP generation engine• We know how to capture and protect IP• We have a sustainable
competitive advantage
IP CommunicationIntellectualAssets, CorpApril 16, 2008
Who Cares?
Your stakeholders• Investors• Customers• Partners• Employees
IP CommunicationIntellectualAssets, CorpApril 16, 2008
WSJ coverage 1992- 2007
IP Stories in the WSJ 1992-2007
0
50
100
150
200
250
300
350
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year
# of IP Stories
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
IP Stories / 1000
Over 2.5x stories
Over 4.7x %
IP CommunicationIntellectualAssets, CorpApril 16, 2008
Investors Care
• The company has greater legal protection– Freedom to operate– Counter claims (cross license)
• There is greater market potential– Competitive advantage
• They see your concentrated efforts in R&D– Tangible output from R&D
IP CommunicationIntellectualAssets, CorpApril 16, 2008
‘Take aways’ for Investors
• Link IP to revenues• Reduce risk with
– More tangible assets, less volatility– Understanding of the IP strategy– Confidence in IP management
IP CommunicationIntellectualAssets, CorpApril 16, 2008
Potential Value of IP
• Intangibles listed at 80% of firm’s value
• Average poorly communicated
20 20
80
114
0
20
40
60
80
100
120
140
160
Reported Potential
Tangible Intangible
100
134
IP CommunicationIntellectualAssets, CorpApril 16, 2008
Esterline
• Specialized manufacturing company serving principally aerospace and defense markets.
• “Although we hold a number of patents …, we do not believe that our operations are dependent on our patents …. In general, we rely on technical superiority, continual product improvement, exclusive product features, superior lead-time, on-time delivery performance, quality and customer relationships to maintain competitive advantage. “
IP CommunicationIntellectualAssets, CorpApril 16, 2008
HP (circa 2004)
• Excellent 10-K– Importance of patents– Number of patents and trend– Even a small breakdown by industry– Comments on licensing
• Don’t Walk the walk
IP CommunicationIntellectualAssets, CorpApril 16, 2008
3M
• Poster child for innovation• R&D called out (including expense)
– Reorg of R&D includes # of personnel• Patents, ™, licenses including their
value• Just a taste of patent detail.
IP CommunicationIntellectualAssets, CorpApril 16, 2008
Value of Harmony
IP Communication
BusinessCommunication
• Aligned communications are additive
IP CommunicationIntellectualAssets, CorpApril 16, 2008
IP Communication Plan
• Section in Annual Report• PR Focused on IP
– About the IP of Company– Distilled into About Company
• White papers• Raise the level of discourse with
stakeholders (including reporters)
IP CommunicationIntellectualAssets, CorpApril 16, 2008
IP is Tangible Value
Processes, Know how
Formulas
Designs, Inventions
Public
Logos, Brands
Written Works, Recordings
Patent
Patent
Patent
™©
Partnerships, Contracts
Secret
TS
TS
TS
IP CommunicationIntellectualAssets, CorpApril 16, 2008
State your IP Value
• Clear space• Competitive advantage• Efficiency
IP CommunicationIntellectualAssets, CorpApril 16, 2008
CI: Themescape
• •••••
••••
•
••
•
•
Clear Space
IP CommunicationIntellectualAssets, CorpApril 16, 2008
CI: Citation analysis
Competitive Advantage
IP CommunicationIntellectualAssets, CorpApril 16, 2008
IP Communication1. Relate its direct impact on your revenue2. Relate your IP position in the market3. Outline strategy (capture, alignment, etc)4. Reveal the IP business advantage5. Basic legal issues
IP CommunicationIntellectualAssets, CorpApril 16, 2008
Summary
• IP is a significant part of firm value• If you are not in control of your IP,
then it is out of control.• A clearly communicated IP strategy
will increase firm value
IP CommunicationIntellectualAssets, CorpApril 16, 2008
Thank You
David McFeeters-KroneIntellectual Assets, Corp
IP Strategy - Licensing - Tech Scoutingdmk@intelassets.com
(503) 493-0477
Increase Value with IP Communication
IP CommunicationIntellectualAssets, CorpApril 16, 2008
Customers Care
• It can simplify purchasing decisions• Offers security and confidence • Offers competitive differentiation• Customer can better defend decision
IP CommunicationIntellectualAssets, CorpApril 16, 2008
Partners Care
• More reason to do business with you• Potential barriers to exit• Channel partners can leverage your
IP
IP CommunicationIntellectualAssets, CorpApril 16, 2008
BASF
• R&D: Because of the high degree of complexity and uncertainty involved in chemical and biological research, there is a risk that projects might be discontinued or that developed products will not receive approval for marketing. We lessen this risk through our global Know-how Verbund, our collaboration with our partners and customers as well as our innovation process whereby efficiency, chances of success and general conditions of research projects are continuously reviewed.
• Patent risks: The Global Intellectual Property department of BASF SE, together with the appropriate units of the U.S.-based BASF Corporation and BASF Coatings, Munster, Germany monitors all the intellectual property rights of BASF. At the same time, we aim to avoid patent and licensing disputes as far as possible through our extensive clearance research.
IP CommunicationIntellectualAssets, CorpApril 16, 2008
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