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Getting Your Intellectual Property Investor ReadyA Presentation to TTI2001 – 27 September 2001
Malcolm McBratney, Partner – Technology Group
Outline
• Investor Readiness
• Introduction to IP
• IP Investor Readiness
The Business Growth Cycle
• Idea investor ready
• Once investor ready:
• Venture capital
refinement of idea
testing of idea, applications,
certification if necessary
• Public offering (and listing) - realisation
Are you investor Ready?
What is Investor Ready?
• Innovation secured - intellectual property
• Management competence and integrity
• Sound business plan
• Knowledge of market, good position
• Risk and returns accurately portrayed
• Ease of investor exit
Risks to Becoming Investor-Ready
Risks to innovation becoming “investor-ready”
• Alternative innovative developments
• Poor licensing arrangements
• Over-estimation of market
• Ineffective management
• Lack of investor confidence
Summary - The 8Ps
1. People
2. Perseverance
3. Product
4. Patents
5. Projections
6. Prospects (of commercialisation)7. (Risk) Profile
8. Passion
What is intellectual property?
What is intellectual property?
• Patents
• Designs
• Trade marks
• Copyright
• Trade secrets
• Databases
Patents
Patents:
• Protect inventions
• Standard – 20 years
• Innovation – 8 years
• Monopoly right
• Country by country
Designs
Designs:
• Protect features of shape and form
• 16 years
• Difficult to enforce
Trade marks
• Company names, brand names & logos
• A business name is not enough!
• Trade marks
• Look before you leap
• Domain name registration
Trade Marks (cont…)
• Two preconditions
• capacity to distinguish
• not deceptively similar
• Perpetual protection
• Renewal each 10 years
• ‘Use as a trade mark’
• Registration not mandatory
Trade Marks
• Trade Marks Act
• proprietary rights
• any sign:
• letter
• word
• name
• signature
• numeral
• device
• brand
• heading
• label
• ticket
• shape
• any aspect of packaging
• colour
• sound
• scent
Business Names
• Administrative
• No proprietary right
• Remove for non use
• Offence to not register
• Will look at similar names
Company Names
• Administrative
• No proprietary right
• No need to use
• Will not register exact company name but otherwise will
• No proprietary right
Domain Names
Copyright
Copyright
• Protects literary and artistic works, sound, TV, radio, film, photos etc
• Protects expression, not ideas
• Generally lasts for the life of the author plus 50 years
Trade Secrets
Trade Secrets:
• Must be kept confidential
• Have unlimited duration
• Are not property
• Can suffer from leakage
IP Due Diligence
Why do you need to do IP due diligence?
• Investor - venture capitalist
- private
• Float
• Commercialisation
• Trade sale
Key Issues
What are the key issues?
• ownership
• encumbrances
• validity
• claims
Process What is the process?
• Establish a chain of title
• Identify and fix gaps
• ongoing management
Ownership
• Employees
• Consultants & contractors
• Disclosures to outsiders
• Development records
• IP policies
Identification
• Each individual IP asset must be mapped
• Chain of title
• Creator/inventor
• Employer
• Assignees
• Licensees
• Encumbrances
Inventor Employer Purchaser
Licence 1 Licence 2
Chain of Title
Assignment
Charge
Inventor Employer Purchaser
Licence 1 Licence 2
Assignment
Charge
Inventor Employer Purchaser
Licence 1 Licence 2
Assignment
Charge
Inventor Employer Purchaser
Licence 1 Licence 2
Assignment
Charge
Management
• Database:
• Registrations
• Dealings
• Correspondence
• Physical / electronic compilation required
• The database must be easy to use & review
• Renewal reminder system
Conclusion
• Be prepared
• Identify and fix problems before 3rd party due diligence
• Maximise value
• Leave enough time
• IP is a valuable asset - it should be managed as such