perspective

gfd

the new economy of intellectual assets

Patents, designs and other means of protection of intangible assets are more relevant to our economy than ever. In a world of intensified global competition, the protection offered by intellectual property (IP) rights is an increasingly important means to the acquisition and retention of sustainable competitive advantage.

Today, machines, materials, drugs, and even crops, are conceived and developed in one part of the world and made in another. As the physical means of production are ever more separated from the authors of technological content, licence fees for IP rights become the connectors between different players in a globalized economy. Licence fee payments in the OECD countries alone amount to hundreds of billion Euros per year.

The importance of intellectual property as an asset and a business tool has increased concomittantly. The art and science of linking IP policy into the traditional framework of business strategy is only beginning to develop. Our goal is to help business leaders of technology-focused enterprises to stay ahead of the field.

Our approach ideally takes three steps:

strategy

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business models

Although technology has intrinsic value, tangible weighty commercial value most likely flows from the individual products or processes enabled by that technology.

Different products lend themselves to IP protection in different ways. A new pharmaceutical „target“ as a tool for drug development may attract the attention of large pharma companies for a few years and command significant licence fees. The promise of hundreds of millions in revenues and fees over a decade or more, however, lies in the drug developed from that target.

The science of both products is closely related. The patenting and corporate development strategies employed to capture their respective value, however, are vastly different.

dependency and opportunity

Technology investment may be threatened by claims of ownership and dependency from third party IP holders.

The consequences of the threat of patent dependency can take different forms, from insecurity about the likelihood or cost of litigation to eroded margins or failed commercial projects. Awareness of the IP landscape surrounding one’s technology, and familiarity of ways to counter third-party-claims, contributes greatly to decision-making and successful IP strategic planning.

Likewise, knowledge of the IP landscape facilitates the recognition of business opportunities. Analysis of the scope of third-parties’ rights, and their extent in terms of territory and time, can help to realize previously uncharted opportunities.

rhythm and pacing

Patenting has its own timeline and rhythm, set by the irremovable time terms of the patent system. A technology development plan adapted to this rhythm optimises value. Important resources are wasted when patent strategy is planned after the invention is finished. Moreover, it is from this technology plan that financing and corporate structure evolves, to the benefit of key stakeholders.

corporate development

Fledgling technology companies often find financing and structuring much harder to tackle than the scientific or engineering problems at the core of their business.

A coherent IP policy that demonstrates tangible value in granted IP rights and which retains downstream development opportunities is instrumental in asserting the commercial opportunity to the financial world, facilitating funding.

corporate structure, risk shields and taxation

Corporate structures can be adapted to specific legal environments and situations to shield valuable IP from short-term business risks. The transfer of IP rights from individuals to corporate structures can have vastly different consequences depending on the sequence of steps conducted.

execution

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business models

Alignment of the IP portfolio and the business model can be achieved by different means.
Our first step is to analyze how the current IP fits within its intended function in the corporate plan. It is surprising to see how often corporations spend scarce resources on patents that fail to focus on their proprietor’s essential business proposal. We offer an objective perspective of how to focus IP effort on the core strategy.

Furthermore, the corporate strategy may be revisited. The strength and competencies of the corporation are contrasted with the environmental analysis offered by traditional strategic analysis. Additionally, an IP lens is added that takes into account the dimension of prosecution, enforcement and evasion of IP rights, and the translation of such rights into commercial relationsships on the Business Development level.

dependency and opportunity

The cornerstone of any strategic planning is information. To navigate the landscape of intellectual property rights, one’s own and one’s competitors’, a map must be drawn.

No technology is alone. It will inevitably build on the inventions of others. Some of those may be in the public domain, others will be protected. When a technology, product or process falls under the scope of third party's IP rights, it is said to be dependent.

An important part of strategic planning of one’s IP and corporate policy is an analysis of dependencies. Dependency issues impact differently depending on which countries they affect and how long the corresponding patents will last. Furthermore, IP rights may be attacked or evaded by working around them.

Similarly, the chart of IP rights can be employed to seek unclaimed opportunities.

Depending on the planning needs, the map can be drawn to different degrees of detail. Sailing the seas of the technology trade without a map, however, is tantamount to entrusting the fate of one’s business to luck.

rhythm and pacing

The alignment of the corporate development and technology development planning with the terms and deadlines of the patenting system necesitates involvement on the operational level.

We offer our assistance by coaching operative mamagers in different functions that must work together to achieve alignment. We may also become directly involved in managing processes directly related to the IP effort.

corporate development

Cohesion and alignment of stakeholders, boards and shareholders with different backgrounds is facilitated by a common understanding of core issues. Appreciating the structure and value of a patent portfolio is one such issue.

We can facilitate your stakeholders’ understanding and appreciation of your IP portfolio by expertises of classic economic valuation techniques. We work together with certified accountants who attest to the validity of our valuations.

We can work together with your own experts or our trusted collaborators from reputable and well-known legal consulting firms to advise on issues of ownership transfer, holding structures, risk shields, taxation and licence and competition law to find a structure suited for your business size, growth expectations and ownership structure.