The value of patents the executives' perspective v3

UNLOCKING THE VALUE OF YOUR IP UNLOCKING THE VALUE OF YOUR

The Value of Patents Perspectives of Business Executives

Fas Mosleh Senior VP

Kanzatec IP M&A

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UNLOCKING THE VALUE OF YOUR IP

Agenda

• Introduction

• The Stakeholders and their Views

• Conclusions

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• Patent strategy to •Strengthen the business and its core capabilities •Access to cash when needed

•Enhance the value for investors


Introduction


What Kanzatec Does – R&R

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Patent Sales


Big Deals

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Nokia Sells 2,000 Patents Mosaid Technologies Will Share in Revenue Wrung From Wireless Know-How

$4.5B


• Why invest?

• How much will it cost?

• What do I get from it?

• Small vs. large business

– Resources to leverage patents to keep out competition

– Need to protect or defend from competitors

• The NPE question

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CEO - Questions


CEO/Founder/COO


• Questions

• Need

• Risk

• Value

• Actions

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CxO Considerations


Big Company CEO

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•Protect my products •Prevent competitive incursion •Use Legal Team to battle •Perspective: I have the resources and want to be the market leader

Example Option Pro Con

Litigate Win for products Cost

License Utilize IP/Revenues Organize/invest

Do nothing No initial cost High risk of attack/lose IP value


• Situation – Entering new market

• Challenges – Very contentious space

• Action

– Proactively protect by buying patents

• Results

– Bought $5M worth patents to protect

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Big Co. CEO View – Acquire IP to Protect

IP

Protect: Aggressively Proactively Reactively


Patent Monetization Benefits

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Monetization

Save costs

Sharpen Win focus

High margin

revenues

Strategic alignment


Small Company CEO

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•Few resources •Optimize value from Patents/IP •Raise funds •Let NPEs go after Competition •Perspective: Can I use my patents to expand my resources? I want to survive/exit/IPO






• Situation – Seeking Funding/IPO

• Challenges – Must maximize $$s

• Action – Explore high return IP acquisition to boost valuation

• Results – Bought ~$2M of patents = valuation boost of additional $3-5M

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Small Co. CEO View – IP Boosts Value

Equalizer


• Average Application $10K

• Average Patent $75K

• Good Patent $150-200K

• Great Patent $250-$500K?

• Litigation class patent >$500K

• Portfolios are worth more than single patents

• Patents with Apps are worth more than patents alone

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How Much Are They Worth?

Getting the Max


CTO

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•Invent •Describe/protect our products •Innate Value of Invention •Perspective: I want to keep my patents and develop my own patents – no need to acquire


Divest Reinvest in relevant IP ‘Lose’ Patents

Develop More cool inventions Less resource on development



CTO View to Defend Protects

Time

Revenues/Impact

Product business trajectory

Current product business

Business #1 e.g. Cameras

Business #2 e.g. Enterprise Printers

Business #3 e.g. Digital Frames

Types of defense: Aggressive Proactive Reactive

Source: Juldee, 2011


GC/Chief IP Counsel

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•Perspective: Follow business priorities and execute the plan – litigate, license, monetize, develop





Offensive Defensive


• Observability/method of detection

• Industry demand

• Industry actions/trends – who is suing whom

• Technology area

• Quality of patent; strength of claims

• Health of patents and apps (due diligence health check)

• Who is a licensee? What cross licensing if any?

• Expiration

• Work arounds

• Applicability (today and future)

What affects the value of your patents?

UNLOCKING THE VALUE OF YOUR IP 19

Value by Mix of Apps and Patents

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1

2

3

4

5

6

7

8

9

Low Moderate High Higher Highest

"Tested" Patents

Patents

Pre-grant Apps

Apps


How Hot or Cold?

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Mobile/Wireless Social Internet video E-Commerce Memory Analytics Manufacturing


Business Strategy Questions

• Do we intend to be offensive or defensive with our IP?

• Will we assert these patents against other companies?

• Do we need these patents strategically?

– Do they align to our future direction?

• How old are these patents and how close are they to expiration?

– What value remains – is it best to extract the maximum value now or later?

– What are the costs of maintenance?

• What return would we get if we were to sell the patents?

• What are the risks and downsides of selling?

• What does the cost benefit analysis indicate?

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In Conclusion...


My Business Needs

• Protecting My Products

• Repelling My Competition

• Enhancing the Value of My Business

• Optimize the return on my IP Assets – Identify, divest non-strategic assets; redeploy $$s

– Understand their business value and buyers’ needs

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Backup


• Example of Terms: • We are prepared to move forward with an offer of X$ on your complete Patent

portfolio, including U.S. Patents A, B, C, plus any pending U.S. applications, and any foreign patents and foreign applications, pending our final diligence and analysis.

• It is expected we will complete our final analysis by October 12th. The offer would also include either a license back or an adjustment in the offer price.

• Please respond to this offer with your acceptance by October 8, 2011. • This offer is contingent upon proof of ownership and authority to transfer all rights

to this patent along with favorable results of our diligence and analysis. This offer will be open until Monday, October 12, 2011.

• Your acceptance will be accepted from an authorized person to me via email or facsimile transmission to 650 468 0401.

• Closing date, exclusivity may be included

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What an IP Deal Offer Looks Like

Date post:	16-Jul-2015
Category:	Business
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