The Unitary Patent Court: The EU's changing landscape

Building A Strategy
To Identify Valuable
IP
 Building A Strategy To Identify Valuable IP
The accurate valuation of a portfolio and
licensing to effectively monetize IP is a
high priority in the IP world. By identifying
IP, measures can be taken to protect it
from exploitation by third parties. “Failure
to protect it, and to do so early, may put
your business at risk” 4 Therefore, without
identifying your IP, you could be giving
away your most valuable asset.
However, the task of identifying IP in early
stages can be hard, when attempting to
forecast revenue.
A company’s IP can be safeguarded via
a range of methods, each of these are fit
with their own strengths and durations:
patents, trademarks, copyright, trade
secrets etc. A combination of these tools
may be needed. As well as strengthening
a company’s competitive standing and
financial performance, IP can stand as
a major plus in the eyes of investors
especially when monetary value is
calculated.
In his report Marcus Holgersson found
that larger firms were seen to have not
only an increase in patenting levels
but also in more selective and strategic
international patenting in accordance
with market activity. For example Sweden
was noted to have felt a strategic shift
in internationalization as it lodged less
national patents moved to apply more on
an international level.
2
Even though the Nordic region is not
recognized as the EU’s nucleus for IPR,
market analysts maintain that the “…
region quietly and effectively converts
creation into cash, while attracting far less
attention than it deserves.”
Ahead of the 2017 Nordic IPR summit,
Legal IQ examines the subject of
identifying valuable IP.
IP alignment with the business
In regards to where IP strategies tend to
succeed or fail, Peter Berg, Chief IP Counsel
at Draexlmaier Group said: “It’s important
to see whether the IP strategy is well
anchored within the company, so it really
supports the corporate strategy. If that’s
the case, then, secondly, it’s important that
all the resources are [in place] to make
it work, in terms of the budget, staffing,
competences, and partners out in the
world.
He adds that even with these aspects
in place, there’s no guarantee that the
strategy will succeed. Sometimes, being
quicker than competition is important,
but also ensuring that there is enough
focus. For example, if your strategy is too
complex or the context in the company
requires too many elements at the same
time, you can still fail.
 Building A Strategy To Identify Valuable IP
IP strategies should be at the heart of any
business strategy and internal innovation
should be nurtured in order to generate
more intellectual property that may be of
value. This may be a driving consideration
in hiring, project selection or acquisition
activities so to produce the most valuable
portfolio with the least resources. The
identification of IP or source of IP that
could be of value should be synchronised
with the R&D process so risks and
opportunities can be pinpointed early.
This synchronisation acts as a needed
source of intelligence to bolster R&D and
M&A strategies as well as due diligence
agility.
Also, the IP department may be able to
influence processes if required so that the Consider controlling the risk the IP assets
value creating handling of IP is secured on are exposed to.
a daily basis.
IP Audits
An IP audit is a useful exercise to spot
any valuable assets within the company
that aren’t being utilised to their
maximum potential. This can be used as
a springboard for your IP strategy. “On
occasions, companies are unaware of
the wealth of assets they possess in the
form of information, creative ideas and
know-how and may, therefore, not take
adequate steps to protect them.”2
These audits should not just been seen as
the usage of valuation tools to pinpoint
the equity behind assets on balance
sheets, but they should be used to
uncover assets that are not accounted for.
Patentable items need to be identified
and protected early to avoid losing the
invention to competitors. Also, ideas
behind these innovations should not
be shared with others before filing an
application as to not forfeit meeting the
criteria of the item being considered as
new and viable for IP protection. 2
IP audits are also used to pinpoint
company property that is not being
utilised properly. 2
3
 Building A Strategy To Identify Valuable IP
Areas to be considered:
• Assets formed by the firm
• Assets acquired without express licensing
• Items under licensing or contracts
Valuing a portfolio that has hundreds
of items can be daunting. Fully
understanding your portfolio and where
the value is stands as the first step in
building an effective IP strategy. This
is very important for companies with
substantial portfolios such as technology
firms. (6) It could also be productive to
look at planned portfolios to identify
where areas of growth may be in regards
to business opportunities.
There are tools to assist with identifying
valuable patents based on citations.
These may give 100- 200 patents to look
at in a portfolio of 1000, but there is no
guarantee to find the golden nuggets
by this method. However, Peter Berg
reminds that big data analytics tools have
improved in recent times and will continue
to do so as the industry progresses.
Peter notes that indices of commercial
value can be aspects such as licensing
programmes or ongoing litigations. To
increase the number of known and used
valuable patents, firms need to construct
a strong internal network to their sales,
marketing, purchasing departments
to match the IP world and the product
4
“whether
It’s important to see
the IP strategy
is well anchored within
the company, so it really
supports the corporate
strategy
Peter Berg, Chief P Counsel at
Draexlmaier Group
and technology world. This awareness
stretches to include those products
and technologies that are owned by
competitors or market peers.
Valuable IP telling signs
Peter notes that any signs of conflict
can act as a key telling sign for value.
For example, if competitors are already
reacting to your company’s IP oppositions,
litigations, warning letters this may be a
telling sign of value. Perhaps customers
who ask with regard to certain patents.
These all are clear signs of commercial
interest by third parties.
He reminds it’s important to question:
“The value of IP also depends on the
profitability of a market and the leverage
IP has in that market, the higher the
 Building A Strategy To Identify Valuable IP
profitability and innovation speed
the higher the leverage of the IP and
the potential to create value by better
utilizing IP. Furthermore, the ease to
detect the unauthorized use of IP within
that industry also boosts value.”
In a recent article, Joseph G. Hadzima, Jr.,
senior lecturer at the MIT Sloan School of
Management notes that patents that are
part of a large group can be a flag to mark
value as the holder has dedicated a lot
of investment towards the future of this
technology. (7) Some disagree with this
projection that it is an indication of value
but in fact only marks a lot of sunk costs.
In spotting valuable IP, firms need to
determine the quality of the underlying
invention, evaluate how robust the patent
is/should be and then areas where value
can be obtained.
On the subject of managing the risks and
expectations of the IP group alongside
the core business at Polpharma, In a
previous article Agnieszka Deeg-Tyburska
General Counsel Polpharma Group
explained : “Well, basically a generic
company is making the business of
5
having as many products and portfolios
as possible and there are many ways of
getting there. So one way is obviously to
have the R&D department to work on the
products that are already not in breach
of the patent or are not connected with
any IP actions. Or you might take a more
aggressive approach to see: what are the
weaker patents? Where are the potential
chances? And how [can you] approach
them? “So I think it’s quite important for a
general counsel to look from the broader
prospective and to see, what is the
opportunity? Where is the risk? And, how
to manage opportunity against the risk?
and vice versa.”
In regards to the automotive industry,
Peter notes that a strong value chain
promote innovation and facilitates
sharing of IP. In comparison to other
industries it is relatively stable due to a
limited number of new players entering
or leaving the market during recent years.
However, Peter adds: “We might have
more disruptive times ahead, e-mobility,
connectivity, or autonomous driving could
potentially have an impact on the value
chain and the role IP will play.”
 11th 12th April
2017 - UK

The 14th Nordic IPR forum looks to address the burning

questions faced by the region.

The event’s discussion tables will be led by senior

decision makers across the industry.

4 Reasons to Attend
Assess the significant benefits of aligning Licensing Strategies with the Strategic Interests of the
Product Business with Thomas Steffen- Senior Director IP Portfolio Management, Philips Intel

Discover how you can increase the success rate of your IP valuation to better identify the
potential value in your technology and knowledge using examples from Ruth Donners- Director
of Licensing, DSM

Learn how to implement strategic alignment within your own organization from the success of
Philips’ Arian Duijvestijn- Head of Intellectual Property, Philips Lighting

Discuss the key strategies to ensure that you are able to find the diamond in the rough and
better predict the future with regards to your IP portfolio under the guidance of Peter Berg- Chief
IP Counsel, Draexlmaier

Download
the Agenda

www.nordicipr.com
Call: +44 (0)207 036 1300 Email: enquire@iqpc.co.uk
 Resources
1. http://www.nordicinnovation.org/Global/_Publications/Reports/2005/
The Unitary Patent Court: The EU's changing landscape
Intellectual%20Property%20Rights%20and%20Nordic%20SMEs%20-%20
a%20study%20of%20IPR%20practices%20in%20the%20IT%20and%20biotech%
20sectors.pdf
2. http://www.wipo.int/export/sites/www/sme/en/activities/meetings/singapore_03/
singapore_bijlani_9.pdf
3. http://www.wipo.int/sme/en/documents/branding_fulltext.html
4. http://www.wipo.int/edocs/lexdocs/laws/en/au/au335en.pdf
5. https://hbr.org/2000/01/discovering-new-value-in-intellectual-property
6. https://www.chipworks.com/sites/default/files/press-releases/Twelve%20
tips%20for%20identifying%20and%20developing%20patents%20of%20value%20%20
Managing%20Intellectual%20Property.pdf
7. http://www.forbes.com/sites/forbesleadershipforum/2013/06/25/how-to-tell-what-
patents-are-worth/#4da2dcf76ac7
8. https://www.innography.com/blog/post/tips-for-identifying-seminal-patents
9. http://www.worldipreview.com/contributed-article/chipworks-finding-a-needle-in-a-
haystack
10. http://www.wipo.int/export/sites/www/sme/en/activities/meetings/singapore_03/
singapore_bijlani_9.pdf
11. http://www.nature.com/bioent/2005/050101/full/bioent842.html