ip strategy melbourne university ip master class 2009

DUNCAN HART

CONSULTING

IP=

Where and how is IP value created?

Focus on wider context – internal/external

Importance of organisational models

processes/structures/culture

www.duncanhartconsulting.com

IP+IC = $2


Human capital

Customer capital

Organisational capital


Intellectual Capital

Human capital

CustomerOrganisational

IP

IP

IP


Legally Enforceable Intellectual Property

Know-How

Human capital

Structural

Customer


+ ‘Business Models’

iTunes

Google

Linux

Amazon

EBay

Henry Ford

Toyota

Wal-Mart

McDonalds

Apple OS

Microsoft OS

Innovation in business models...

Nintendo

Printers/ink

Low cost

airlines

McKinsey

...where does the value come from?

Visionary

Integrated

Profit Centre

Cost Control

Defensive

Strategy requires

Organisational Capital

Are competitors better

placed to better exploit

opportunity?

Are critical assets available In-

House?

Does commercialisation

require specific

complimentary assets?

Is protection a competitive

issue??

InnovationMeets/Creates Market

need?

Opportunity to catch up?

Are resources availbale to

build them?

Can need for specific assets

be created?

Is adequate IP Protection

available?

© 1998 Patrick H. Sullivan

STORE

STORE

Yes

No

No

No

No

No

No

Yes

Yes

Yes

Yes

Yes

Yes

Yes

COMMERCIALISATION DECISION PROCESS

No

No

No

Yes

INTEGRATE

JV/ALLIANCE

OUT-LICENCE

CONTRACT


Complexity of issues....

Sophisticated processes....

critical to strategy execution....

Market Definition; an important determination of market value is the determination of primary and alternative markets where the IP may bring benefits. The larger the defined markets become, the more robust the value examination will be, and consequently, the total value expected to be extracted from that IP.Product or Product-Line Attributes: one layer below the market analysis is the identification of specific product lines and/or products impacted by the IP. In addition to the definition of potential markets and sub markets, this information allows the refinement of market research so that actual quantities and values per unit can be assembled.Customer/Licensee Identifiers: purchases and sales lend themselves at the edification of potential users of the IP. This information can provide significant data that further support the determination of the IP's value.Previous Estimates of Revenues: as part of the justification provided by innovators and product commercialisation decisions, innovation life cycle will often generate preliminary estimates of value. Although the studies may not be current, the methodologies and the data sources used by R&D, patent committees and licensing personnel will provide meaningful assistance to the CFO staff as they prepare their IP value analysis.

Terms

and data collection/management....INTERNAL IP MANAGEMENT CFO’s IP Accounting and Valuation Data

IP Life Cycle

Source

Documents

Generated

Market

Definition

Analysis

Product/Product-

Line

Customer/Licensee

Identified

Revenue/Offered

Projections

R&D director

assigns

research

project

Research work

program and

budget

Yes Likely Possible Possible

Researchers

status reports

Actual versus

planned resultsYes Likely Possible Possible

Inventor

submits request

to patent

committee

Technical

disclosures;

competitive

research; budgets

and ROI estimate

Yes Yes Yes Likely

Patent

committee

ranks and

approves/denie

s funding

Meeting minutes,

committee

member notes

Yes Yes Yes Likely

Inventor meets

with IP

Counsel

Validity research,

prior analysis,

inventor/assignee

report

Likely Likely Yes Possible

Inventor meets

with

development

team

Manufacturing

type, cost

projections,

market/product

analysis

Yes Yes Yes Yes

IP licensing

team meets

with R&D and

marketing staff

Licensing

strategies,

triage/rank

targets, revenue

forecasts

Yes Yes Yes Yes

General Counsel

Project/portfolio

Manager

CFO

CEO

New capabilities required of General Counsel - Interaction with Executive Team

HR

Helps integrate IP into Corporate

strategies, coaches Board and CEO in IP

value creation

Brand/TM strategy and enforcementSupports valuation and compliance functions - settlement -

licensing/sale structure, risk profile

IP protection,development

CTO/Engineering/R&D

Advises on deals, structure,JV assists set up and

management of IP projects

Marketing

Confidentiality,trade secrets,restraint,'inventor' management/incentives


Organisational forms - integration


Limited liability company

Stock exchange

Insurance

Contract law and enforceability

Modern management techniques

New business models

Marketing techniques

Information technologies

HR management

External ‘cultural’ infrastructure....


China – innovation is not enough

Needham – 1930s

Moveable type

Stirrup

Grafting

Paper

Canal technologies

Compass

Gunpowder etc

.....BUT NO INDUSTRIAL REVOLUTION.

IP+IC = $2


DUNCAN HART

CONSULTING

IP=