Recent developments in IP commercialization â How can ... - agepi
Recent developments in IP commercialization â How can ... - agepi
Recent developments in IP commercialization â How can ... - agepi
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W<strong>IP</strong>O – AGEPI SME workshop – November 2012<br />
<strong>Recent</strong> <strong>developments</strong> <strong>in</strong> <strong>IP</strong><br />
<strong>commercialization</strong> –<br />
<strong>How</strong> <strong>can</strong> SME’s make money on their<br />
patents?<br />
Ari Manoach
On the Agenda...<br />
• Introduction<br />
• Last decade’s <strong>IP</strong> monetization milestones and recent deals<br />
• Apple vs. Samsung<br />
• US patents value compared to other PTO’s<br />
• Value and tim<strong>in</strong>g – case studies<br />
• Different monetization models<br />
• SME’s take home tips<br />
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Iconn Technology Ventures<br />
• HQ <strong>in</strong> Tel-Aviv, Israel. Ma<strong>in</strong> activity <strong>in</strong> the US.<br />
• Grow<strong>in</strong>g activity <strong>in</strong> Europe and the Far East<br />
• <strong>IP</strong> Commercialization on behalf of tech companies,<br />
<strong>in</strong>vestors, f<strong>in</strong>ancial <strong>in</strong>stitutions.<br />
• Court nom<strong>in</strong>ation for sale of <strong>IP</strong> of companies <strong>in</strong><br />
liquidation or reorganization.<br />
• Focus on patent portfolios.<br />
• Some other non tangible assets - trademarks, source<br />
code, tax shelter, customer base, etc.<br />
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Technology areas<br />
• Hottest: Telecommunications, mobile telephony,<br />
Internet<br />
• Active: Software, digital pr<strong>in</strong>t<strong>in</strong>g, video.<br />
• Plus: Energy, chemistry, electronics, automotive,<br />
aerospace, display, computer peripherals, IT,<br />
HLS, ATE, PFC and more.<br />
• Life Sciences:<br />
Medical devices<br />
Biotechnology.<br />
• Futuristic: Cleantech<br />
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A decade of patents<br />
monetization<br />
MercExchange<br />
vs. eBay<br />
Global<br />
recession and<br />
patents wars<br />
Mega<br />
portfolios<br />
sales<br />
Intellectual<br />
Ventures<br />
NTP vs.<br />
RIM<br />
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<strong>Recent</strong> mega deals<br />
• Nortel 6,000 patents and applications sale for<br />
$4.5B to Rockstar, 7/2011<br />
• Motorola Mobility sale to Google for $12.5B –<br />
1,700 patents and 7,000 apps, 8/2011<br />
• AOL $1.056B patents sale to Microsoft, 800<br />
patents, 6/12<br />
• Microsoft sale to Facebook of 650 patents for<br />
$550M.<br />
• InterDigital sale of 1,700 assets to Intel for $375M<br />
• Cisco NDS $5B 3/12<br />
• Kodak’s failed 1,100 patents sale, 2012<br />
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Is there a price per patent?<br />
• Measur<strong>in</strong>g:<br />
• A sale price?<br />
• Revenue stream?<br />
• Market cap?<br />
• Deduct<strong>in</strong>g the value of a license back?<br />
• And what about pend<strong>in</strong>g applications?<br />
• A rule of thumb for big portfolios<br />
• Price tag image.<br />
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Apple vs. Samsung<br />
• 50 lawsuits <strong>in</strong> 10 countries<br />
• A US court rul<strong>in</strong>g <strong>in</strong> August 2012:<br />
• Jury <strong>in</strong>structions<br />
• $1.05B <strong>in</strong> damages<br />
• Design patents – shape of iPhone, similar icons<br />
• Willful <strong>in</strong>fr<strong>in</strong>gement and <strong>in</strong>junction claims to be decided<br />
• To be appealed<br />
• Importance: Lessons learnt for patents monetization.<br />
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Apple vs. Samsung<br />
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USPTO value; towards EPO<br />
and other jurisdictions<br />
US<br />
assertion<br />
ROW<br />
Large<br />
damages<br />
Europe and<br />
Far East<br />
markets<br />
Willful<br />
<strong>in</strong>fr<strong>in</strong>gement<br />
Global R&D<br />
and<br />
manufactur<strong>in</strong>g<br />
Capital<br />
markets<br />
Cost of<br />
litigation<br />
ITC<br />
NPE’s<br />
<strong>in</strong>junctions<br />
Active market<br />
First court<br />
cases by<br />
PLC’s<br />
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Where does an <strong>in</strong>vention’s value<br />
reside?<br />
L<strong>in</strong>k to video.<br />
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Case Study: C vs. C<br />
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Case study – C vs. C<br />
• Three <strong>in</strong>ventors found a Start Up company, raise $15M.<br />
ma<strong>in</strong> direction fails.<br />
• One US patent + <strong>in</strong>ternational applications<br />
• Payment to VC funds + additional f<strong>in</strong>anc<strong>in</strong>g<br />
• Settlement payment by two large telecom companies.<br />
• A series of victories versus the market leader:<br />
• Three court rul<strong>in</strong>gs >$70M<br />
• Reexam<strong>in</strong>ation<br />
• Appeal<br />
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Case study – Alvarion patent<br />
sale<br />
• A wireless Israeli start up turns market leader.<br />
• Company valuation surpasses $1B.<br />
• Company deteriorates to market cap of $28M.<br />
• October 2012 sale of 150 4G patents for $19M.<br />
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Are you <strong>in</strong> for a quick buck or<br />
the jackpot?<br />
1. A quick sale?<br />
• Analyz<strong>in</strong>g the value<br />
• L<strong>in</strong><strong>in</strong>g up buyers – PE’s and NPE’s<br />
• Is there a multiplier?<br />
2. An assertion campaign<br />
• Specific jurisdictions<br />
• Choos<strong>in</strong>g the best cont<strong>in</strong>gent law firm<br />
• F<strong>in</strong>anc<strong>in</strong>g the process<br />
• Partner<strong>in</strong>g with a licens<strong>in</strong>g company<br />
3. Hybrid deals – cash + backend<br />
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Patent buyers – different models<br />
• Patent licens<strong>in</strong>g companies<br />
• Defense-side aggregators<br />
• Old-new entrants: practic<strong>in</strong>g entities<br />
• Consortia:<br />
• Defense-side<br />
• Offense-side<br />
• Public auctions / onl<strong>in</strong>e exchanges<br />
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SME’s: Tips for the road<br />
• Current focus on US patents.<br />
• Value to ma<strong>in</strong> markets per technology field<br />
• Ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g the portfolio <strong>in</strong>clud<strong>in</strong>g pend<strong>in</strong>g applications<br />
• Slic<strong>in</strong>g the portfolio versus sell<strong>in</strong>g it as a whole.<br />
• License back.<br />
• Choose the best tim<strong>in</strong>g<br />
• Seek<strong>in</strong>g a diamond <strong>in</strong> a haystack<br />
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Cross border <strong>IP</strong> sale<br />
Opportunities:<br />
• Better value<br />
• Real competition<br />
• Logistically easy<br />
• Small country<br />
advantage<br />
Challenges:<br />
• Government<br />
limitations<br />
• Different legal<br />
sett<strong>in</strong>gs<br />
• Customer-base as a<br />
local asset<br />
• Tax considerations<br />
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Summary<br />
• A decade of active patents monetization <strong>in</strong> a volatile<br />
market<br />
• There is value to volume but probably no price-perpatent<br />
• Th<strong>in</strong>k global: an opportunity for SME’s from small<br />
countries<br />
• Value may be found <strong>in</strong> non-trivial directions<br />
• Smart ma<strong>in</strong>tenance of patent portfolios<br />
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Thank You !<br />
ari@iconn.biz
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