utilizing ip to access funding
DESCRIPTION
Exploiting IP Through Licensing IP can be more than just a protection of your ideas. It can be used to leverage unique non-equity funding alternatives. This lunch will explore whether your IP portfolio could be licensed to add cash to your business. The discussion will also touch on the advantages and pitfalls of licensing as well as the various kinds of licensing possibilities. www.thecapitalnetwork.orgTRANSCRIPT
Nutter McClennen & Fish LLP Seaport West 155 Seaport Boulevard Boston, Massachusetts 02210 Telephone 617.439.2000
www.nutter.com
TCN Expert Lunch: Maximizing Value Through IP
June18, 2013
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IP Is A Potential Asset
• Knowledge & Understanding Needed to Realize Its True Potential
• IP Has Many Uses – Build Value, Attract Investment, Protect Revenue Stream, Build Revenue Stream
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PATENTS: WHAT THEY ARE AND WHAT THEY ARE NOT
• Right to exclude others • NOT a right to use your own patented
invention • A’s patented invention may be an
improvement that is dominated by B’s earlier patent • A’s use/sale of its own patented
invention may result in suit by B
Case Study #1
• Start-Up With No IP Strategy
• Single Patent Application for a Gen 1 Product
• Narrow Claims
• Failed to Keep Patent Family Alive
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Case Study #1 (Continued)
• Unprepared for Investor Due Diligence • Couldn’t articulate patent strategy
• Freedom-to-Operate Issues Uncovered • Reactive (Not Proactive) vis-à-vis Third Party Patents
• Result: No Funding Nutter McClennen & Fish LLP • www.nutter.com 5
Case Study #2
• Second Patent Application for Gen 2 • Broader Disclosure
• Goal: Raise money to Develop and Market Product
• Relying on IP to Build Value – attract investment, achieve exclusivity
• Learned that IP Needs Focus Nutter McClennen & Fish LLP • www.nutter.com 6
Case Study #2 (Continued)
• Intense Due Diligence • Gained Understanding of Marketplace • Increased Knowledge of Patent Process, Prior Art, and Use of Claim Strategies • Able to Articulate Expected Patent Coverage
• FTO Looked Clean • Aware of Relevant 3d party Patents and able to Explain Path to Market
• Result: Successful Fundraising Nutter McClennen & Fish LLP • www.nutter.com 7
Surprise!
• Product Fails
• Original Strategy of Successful Product Marketing is Untenable
• All Investment at Risk
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New Strategy
• Monetize the IP Portfolio
• IP Portfolio Comprises Multiple Patents • Claims Specific to Intended Product • Broader Claims • Applications Still Pending
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Executing The New Strategy
• Aware of Competitor’s Proposed Product Launch • Market Knowledge Pays Off!
• Build Case for Patent Infringement
• File Continuation With Claims Targeting Competitor's Product • Adds Another Picket to the Fence
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Success!
• Aggressively Approach Competitor
• Explain and Demonstrate Infringement
• Result: Sale of Company Assets for Good ROI, without Litigation
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Takeaways
• Initial Lack of (or Poor) Strategy Created Risk, Facilitated Failure • Don’t Rely on a Single Application
• Increased Sophistication Enabled Aggressive IP Portfolio Development
• Knowledge of Competition Created Opportunity
• Flexibility & Focus Enabled Success Nutter McClennen & Fish LLP • www.nutter.com 12
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What Is An IP Strategy?
An IP Strategy is the playbook that describes how intellectual property will support the business
The IP Strategy Should Identify: • Offensive uses of IP – How will you create barriers to
entry that keep competitors behind you • Defensive uses of IP – How will you keep control of
the important aspects of your business • IP liabilities – How will you avoid the potholes
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Why Do You Need An IP Strategy?
• Align IP with Business Goals • Competitive Advantage • Attract Funding • Revenue Source
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How Do You Develop an IP Strategy?
Identify Business and Technology Goals
Evaluate Your Existing IP Portfolio
Know the Competition
Strengthen Your IP Portfolio
Track Your IP Portfolio
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Identify Goals
• Identify both business and technology goals for company
• Identify key players (competitors, partners, customers)
• Identify technology direction (within company and industry)
• Determine offensive goals (asserting IP against others; revenue generation), defensive goals (using IP as a shield), and market purpose (e.g., to demonstrate company innovation, gain funding, etc.)
• Align the goals, industry and technology information, and portfolio use goals.
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Evaluate Your IP Portfolio
Review patent portfolio (asset/liability approach)
Inventory IP Assets
• Identify them – What are they?
• What do they cover? Do they support the story?
• Does the company have clear title to them? – If not, they can go from Assets to Liabilities.
Inventors IP Liabilities
• Third party rights that you might not be aware of
• Third party rights you might be aware of
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Evaluate Your IP Portfolio (cont.)
Assess Freedom to Operate:
Conduct regular searches
Review all Prior Art
Identify potential problems
Review and assess validity
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Strengthen Your IP Portfolio
Multiple Patents: don’t rely on a single patent
Multiple Claim Types: cover paper, bench top, and commercial embodiments, as well as methods of manufacturing and methods of using
Keep patent families alive
Cover competitor products/systems
Cover Any Design Arounds
Consider foreign protection
Consider other forms of IP (trademarks, trade secrets, copyright, agreements)
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Track Your IP Portfolio Over Time
Regularly Update and Check Your Progress Against Your IP Plan
One good way is an IP Review Committee • Meet regularly, once a month to once a quarter
• Review business model – any changes? New products?
• Push contributors for Invention Disclosures for key new technologies/product differentiators
• Select which invention disclosures warrant, from IP and budget perspectives, patent application filings and which should remain secret
• Track competitors – any new products? Patents?
• Identify Licensing or Partner/Consultant issues
• Include Marking/Sales as well as CTO/Engineering Committee
IP Strategy: Track Your Portfolio
Regularly Update and Check Your Progress Against Your IP Plan • Make sure your plan stays up to date
• Is your business model changing?
• Does your product roadmap have a new turn?
• Are you achieving your goals?
• Are you generating the data you need to create the right IP assets?
• Are your patent applications progressing?
• Has the PTO put a crimp in your plans?
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THANK YOU