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......... MICROSOFT WORKSHOP ON
“STRATEGIC MANAGEMENT OF INTELLECTUAL PROPERTY (IP) ASSETS: HOW
YOU CAN MONETIZE IP ASSETS”23 JUNE 2006
PRE-WORKSHOP SESSION: INTELLECTUAL PROPERTY LAB
22 JUNE 2006
OVERVIEWThe measure of competitiveness among enterprises will increasingly be driven by an enterprise’s ability to innovate, create and exploit new types of economic assets built from knowledge capital. Intellectual property (IP) which is a key by-product of innovation is a critical component of an enterprise’s knowledge capital. A key aspect of innovation management is the legal protection of ideas through IP rights management and legal enforcement.
Enterprises with an exploitable portfolio of IP assets are better positioned for market dominance. In this shift towards the knowledge-based economy, enterprises with a strong portfolio of IP assets have a much greater chance of securing profitability. IP asset management is about designing a structured framework at the enterprise level to manage IP assets in a manner that enables the enterprise to extract commercial value of its IP assets particularly its IP rights. New strategies, tools and techniques have evolved to allow IP assets to be exploited optimally for revenue generation and to build shareholder value.
This 1-day intensive program on “Strategic Management of Intellectual Property (IP) Assets: How You Can Monetize IP Assets” which is preceded by a 1-day IP Lab session, is part of Microsoft’s Strategic IP Initiative in the Asia-Pacific region. This Program provides an intensive management-oriented guide on key aspects of IP asset management, a key practice area that will increasingly impact the business performance of enterprises and nations. Aimed at industry players, this Program seeks to share insights on the following issues:
How IP assets can be leveraged as a tool for competitive advantage for enterprises and nations;
Identification of key economic, legal & business issues in the design, development and management of strategic IP policy at the both the corporate and national levels; and
Outline key legal & business risk management principles that organizations should adopt as part of their IP asset management policy
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.........PRE-WORKSHOP CONSULTATIONINTELLECTUAL PROPERTY LABS
22 JUNE 2006
PROGRAM OBJECTIVES
The IP Lab is designed as a session in small groups of 3-5 to review the organization’s IP strategy in a business or transactional context focusing on how IP can be leveraged as a tool for competitive advantage. The facilitators will review the participants’ specific business model and corporate strategy needs with a view to helping the participants structure their business transactions in a manner that will fully exploit IP. Issues covered will typically include:
Understanding the types of IP an organization has How the organization can structure deals with IP as a value driver IP commercialization strategies and tactics suited for the organization Licensing terms and conditions Integration with overall business strategies Development of a customized strategic IP plans for the organization
FACILITATORS
Zaid HamzahDirector for Intellectual Property, Legal & Corporate AffairsMicrosoft Asia Pacific
David LenPartnerAbdul Raman Saad & Associates (“ARSA”) www.arsa.com.my Kuala LumpurMalaysia
Teddy KalawPartnerKalaw SY Vida Selva & Campos www.philippinelaw.ph ManilaPhilippines
TARGET AUDIENCE
Business executives, software developers & industry players involved in the creation, management and protection of IP
Government officials and policy makers responsible for the creation, management and exploitation of IP assets (copyrights, patents, etc) in IT, biotechnology and other high technology industry)
Researchers & academics involved in research projects
2
......... “STRATEGIC MANAGEMENT OF INTELLECTUAL PROPERTY ASSETS: HOW
YOU CAN MONETIZE IP ASSETS”23 JUNE 2006
PROGRAM OBJECTIVES
Intellectual property is a key value driver that can enhance an enterprise’s competitiveness. This Program seeks to provide a practical guide on how to develop IP asset management strategies for greater value extraction.
Specific objectives of this Program are:
1 To equip participants with the knowledge and skills to: Understand the IP eco-system How to carry out IP audits How to develop an IP management strategy How to commercialize IP assets including the development of
strategies and techniques for IP commercialization
2 Learn from industry best practices on IP value creation
TRAINERS Zaid HamzahDirector for Intellectual Property, Legal & Corporate AffairsMicrosoft Asia Pacific
David LenPartnerAbdul Raman Saad & Associates (“ARSA”) www.arsa.com.my Kuala LumpurMalaysia
Teddy KalawPartnerKalaw SY Vida Selva & Campos www.philippinelaw.ph ManilaPhilippines
TARGET AUDIENCE
Business executives, software developers & industry players involved in the creation, management and protection of IP
Government officials and policy makers responsible for the creation, management and exploitation of IP assets (copyrights, patents, etc) in IT, biotechnology and other high technology industry)
Researchers & academics involved in research projects
3
......... PROGRAM
8.30 am Registration
9.00 am Chairperson’s opening address
9.15 am Strategies for Intellectual Capital Creation, Management and Exploitation
Nature of the IP eco-system – understanding the linkage between IP and innovation
Challenges for industry and governments in the Knowledge Economy Emergence of IP industry as a strategic sector - IP as a value driver How IP promote competitiveness - leveraging intellectual capital
(focus on Intellectual Property) for competitive advantage & corporate growth
Strategies & tactics for intellectual capital building, management & commercialization
Understanding policies related to IP and the legal framework IP as one key business driver - IP strategy and the overall corporate
strategy
10.00 am IP Fundamentals Copyright, Trade Mark, Patent, Trade Secrets How to protect your IP & develop the most appropriate protection
strategies for your organization How to ensure you don’t violate the IP of others Litigation issues in IP – managing risks proactively How to protect your IP in government –commissioned work International aspects of IP management Understanding international IP treaties
10.45 am Morning Refreshment
11.00 am Understanding Software & Business Method Patents What are software and business method patents Why is software patent so controversial How to develop a software patent strategy – offensive, defensive
mode International aspects of software patenting Case studies: Amazon 1-click system Understand software patent processes Walk through of US software patents (Amazon 1-click system,
Microsoft Patent Number 6,999,083 (spectator experience for networked gaming)
4
.........11.30 am Auditing IP Assets & IP Due Diligence Why IP audit needs to be conducted How to conduct an IP Audit Legal, business and technology issues in IP audits Maintaining an IP Portfolio in your organization IP due diligence in mergers and acquisitions
12.00 pm IP Valuation & Financing How to value your IP assets 3 approaches: cost, income, market) IP Collateralization, securitization and capitalization: Business and
legal challenges Role of financial institutions in IP commercialization How start up can raise money using IP
12.30 pm Legal Issues & Documentation in IP-related Transactions Structuring deals and documentation structure Understanding the legal process in IP-driven transactions IP Indemnity issues Types of legal documentation in IP-related transactions Walk-through IP clauses in basic legal documents such as licensing
agreement, assignment agreement, registered user agreement, software development agreement, web-hosting agreement, linking agreement, end-user agreement, turnkey agreement
1 pm – 2 pm Lunch
2.00 pm Intellectual Asset Management as part of Corporate Strategy
IP strategy as part of corporate strategy How to develop a corporate IP policies IP and brand value creation Business and legal framework for IP commercialization Patent strategy as one key element in the overall IP strategy Offensive versus defensive IP strategies Understanding digital rights management
2.30 pm Developing Strategic Approaches for Intellectual Property Exploitation
Leveraging intellectual capital (focus on Intellectual Property) for competitive advantage – business models and IP-driven revenue generation
Strategies & tactics for IP commercialization Understanding IP revenue generation models: packaged software
fee, software development fee, ASP subscription fee Developing a digital asset management programs at the corporate
levels Business and legal framework for IP commercialization
5
......... IP commercialization strategies and its integration with overall corporate
3.15 pm Structuring Issues and Channel Management in IP Commercialization
Understanding deal and document structure in IP-driven transactions Role of financial institutions in IP commercialization What VCs and other funders look out for in IP-driven transactions How to manage your channel partners locally and overseas Managing cross-border issues in IP commercialization Case studies in IT and biotechnology
4.00 pm Afternoon Refreshment
4.15 pm I Strategies and Techniques for IP Commercialization
IP valuation & its business and legal challenges How to develop an IP commercialization strategy Techniques for IP Commercialization: Licensing, assignment Business and legal challenges in IP commercialization Managing the legal process and documentation Case studies
II Practical Steps in IP Commercialization
Walk through of issues listed in the Manual at Annex AHow IP fits into the overall business planning (See checklist at Annex B)
5 pm-6 pm Breakout Tracks for IP Labs(small groups’ review)
Track 1 IP Lab on “How to Develop IP Strategy”Facilitator: Zaid Hamzah
Tips for developing strategic IP plans Auditing of IP assets and managing IP portfolio Integrating IP strategy with overall business strategy Developing patent strategies Mapping R&D to market demands Managing legal risk issues in documentation
Track 2 IP Lab on “Strategies and Techniques for IP Commercialisation”Facilitator: David Len
How your organization can develop an IP commercialization strategy IP and product commercialization strategies for your organization Ownership issues and accountabilities
6
......... IP & revenue generation Risk assessment and mitigation plans Metrics to measure performance of commercialization program
Track 3 IP Lab on “Implementing IP Strategies in the Local Market”Facilitator: Teddy Kalaw
IP protection in the local market Branding strategy for your IP/products IP development and productization & portfolio management Marketing and sales issue & other operational aspects Managing your distribution channel in the local market Legal issues and documentation in your distribution channel in the local
market
7
.........
Annex A
IP COMMERCIALIZATIONCHECKLIST OF ISSUES
Developing the Strategic Plan Overview of IP commercialization program Broad strategy & action plan IP commercialization & economic development action plan Vehicle to execute program
Intellectual Property Review Conduct of IP audit Creation of IP portfolio IP valuation Ownership issues & accountability plans
IP commercialization strategy Development of IP commercialisation strategy Identification of suitable markets
Product or service description Market research & comparison Proprietary rights Identification of market leaders Identification of niche areas
Product commercialization strategy Development of product commercialisation strategy Matching product with identified market
Development Plans Review current status Development plans Development timetable Development risks
Operations Overview of operations Scope of operations Ongoing operations
Financial strategy & plans Financial assumptions Financial forecasts Quantification of all capital requirements
8
......... Financial risks Exit strategies
Acquiring funding and financing Acquiring funding and financing Valuation of business Methods of acquiring funding and financing Conventional loan / conventional collaterals Issues in IP funding and financing
Licensing Structure Licensing Structure Assignment of IP Acquisition of IP
Determination Of Fees Royalties Licensing Fees
Commercialization Structure Joint venture Partnership Affiliate Brokerage Infomediary Advertising
Documentation StructureKey elements of documentationNegotiation of Agreements:
(i) License(ii) Assignment(iii) Distribution(iv) Franchise(v) Material Transfer(vi) Consultancy(vii) Manufacturing(viii) Outsourcing
Marketing and sales Market analysis Marketing strategy Sales strategy Pricing of products
Management Company organization Management team Board of directors Management compensation
Competition Competition in national market Competition in international market
9
......... Forms of anti-competitive commercialisation
Performance reviews / post-mortem Review of IP portfolio Review of market acceptance Conducting ongoing trials
Group Review and Strategic Planning
Review Strategic Planning templates
Group Presentation Strategic Plans for IP Commercialization Operational Programs Execution Roadmap
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......... ANNEX B
BUSINESS PLANNING CHECKLIST
This checklist is designed to help aid budding entrepreneurs develop a business plan____________________________________________________________________
A. DESCRIPTION OF THE BUSINESS CONCEPT
1. What is the business concept and the opportunity? Any proof of concept in the marketplace?
2. What problem will the product or service solve?3. What are the primary benefits to the customers or clients?4. Does the concept create substantial customer value?5. Does the concept reduce/eliminate substantial cost?6. Does the concept reduce complexity?7. Does the concept deliver convenience?8. What are the cost savings?9. Any productivity gains?10. How does the product/service improve on or replace current offerings if any?11. What is the business model? Is the business model viable?12. What business activity will the venture undertake? 13. Why now? 14. What is unique about this venture?15. Is there a working model or prototype? 16. Is the business model economically justifiable?17. What stage of development is the venture in? How long has the venture been
running?18. What companies does the business resemble? How have they fare in their
markets? Any basis to compare?
B. TARGET MARKET
1. What is the target market? Who are the customers? If there are early adopters, who are they?
2. What is the size and value of the target market? What has been the growth rate for this industry space?
3. Describe market segmentation, if any
4. What is the “psycho-graphics” of the market – ready for the product and services?
5. What is likely to be adoption rate of the venture’s technologies, products and services?
6. Does the venture have a marketing target list?
7. Any present market share?
8. What is the roll-out strategy of its products and services?
C. PATH TO PROFITABILITY
1. What are the revenue streams?
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.........2. How long will it take from the current stage of development to bring this to market?
3. What is the average time to market the product and services - from initial pre-sales to deployment?
4. What are the specific plans of action to achieve profitability? Time frame?5. What level of profits is expected?6. How will the first sale happen? Who will be the first customer(s)? 7. What is the proof that can/has been offered that the target customers value
the venture’s product or service?
D. MARKET POTENTIAL
1. Is there a large market opportunity? What is the global potential? 2. What is the expected growth of the target market? What is the future
potential?
3. What are the economics of the market? What is the potential to expand?
4. What will the pricing position be relative to the industry? 5. Is the venture focused on its target market?6. Is the venture familiar with and interested in the given market space?7. Are there any legal, structural or cultural issues or impediments that might
affect the delivery of the product and services?
8. What is the venture’s growth plan?
9. Can the business “scale up”? Is the business capable of going for “volumes” particularly on a global basis? Any limitations on scaling up?
10. Timing?
E. OVERALL OPPORTUNITY
1. Is the business opportunity both highly attractive and clearly realistic? 2. What are the risks and rewards in this venture? 3. What comparisons are there to past success stories that indicate this venture
will succeed?
4. Has the venture gone out to the market already to test its ideas? What is the proof of demand?
F. ASSESSMENT OF COMPETITIVE ADVANTAGE
1. What special knowledge or technology does the venture possess and how will this knowledge be protected?
2. Is the business defensible from competitors? Price-wise? Strategy?3. Who are the competitors?4. Number?5. Where do they operate?6. What stage of development are they at?7. What is their market share?8. What strategic advantage do they have relative to this venture?9. How distinctive/ different is the idea?10. What factors could cause this venture to stop/ reconsider the idea?11. Can this venture be a market leader? 12. Is this business going to be around and a real world winner in 5 years?
12
.........G. DESCRIPTION OF BUSINESS STRATEGY
1. What is the business strategy for the venture?2. What does the venture need to do very well in order to win in this market?3. What is the venture’s growth strategy? Can the venture cope with sudden
surges? How scalable is their business?4. Any vulnerability factors?5. Any plans for overseas expansion? In what form? When?
H.
IMPLEMENTATION PLAN
1. Does the venture understand and have they addressed the implementation strategy?
2. How is the business model going to be implemented?
3. Does the venture have customer marketing, sales and support team?
4. What is the venture’s marketing plans? Any impediments?
5. Has the venture addressed the service and support issue?
6. Have the venture identified all the resources needed? 7. What are the company’s employment plans?
I. PROJECT FINANCIALS
1. What are the business projections?
2. Are the financial projections sound? Do the market and financial projections demonstrate that the venture understands its business?
3. What is the “unit cost” for the revenue generated?
4. How long is the sales cycle? Does it vary with type of clientele?
5. Able to cope with sudden surges in demand? Is the business “scalable”?
6. Do they have the following :
Quarterly financial projections for two years and annual projections up to Year 5, including Pro Forma cash flow and budget analysis;
Breakeven analysis.
J. MANAGEMENT TEAM BEHIND VENTURE
1. Management Team Who are the directors & members of the advisory committee?
Indicate their industry/startup experience Details of those running the business Previous entrepreneurial experience Previous work experience Qualifications
13
......... Any advisors who add strategic value? How many employees? Recruitment plans?
2. Is the team of sufficient breadth, balance and quality to make its ideas happen? Are there high quality team members involved?
3. Are the team members dedicated to the venture and their roles in the group?
4. Does the venture have the necessary communications skills to present a compelling proposition to its partners and targeted market?
5. Does the venture have a clear plan for spending the investment money it receives?
K.
STRATEGIC BUSINESS PARTNERS
1. Does the venture have the right partners to fill capability / asset gaps?2. What relationships lie in place to help drive this business forward?3. Are the strategic partners dedicated to the venture and their roles in the
group?4. Can the company add synergistic value to the investor’s group of companies?
L. FINANCING PARTNERS
1. Information on existing financial partners if any2. How will these partners help the business in future?3. Does the venture already have funding that adds strategic value? 4. Any IPO experience?
M. OTHER ISSUES OF INTEREST TO INVESTORS
1. What is the investment to date?2. How much funding is required?3. How will this funding be used? 4. What is the timing/phasing of expected growth in relation to the timing for
further investment?5. What is the amount of up-front capital investment required if any? 6. What is the expected time and amount of pay-off to investors?
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