Extracting Value from intangibles Flashcards
From managerial perspective what are IP’s?
Tools to achieve companies goals and generate value for stakeholders
What is the value of a company?
For investors?
Market value?
The worth of its business. Reflects the ability to generate income.
Generate income as future dividends from shares.
Market value: the price of
the shares X total number of shares.
What type of Assets are:
Land, properties, plants, equipment, stocks of goods
Tangible
What type of Assets are:
HR, Brands, patents, copyrights, designs, goodwill
Intangibles
Goodwill
The difference of buying a to build business than buying a working business.
I the gab between what can be measured in value and the perceived value of the company.
Drivers of intangibles increasing trend
Scare physical resources
Explotations of brands
Innovation /new tech
Exploration of information
How has been the behaviour of the two type of assets during time?
How is its share in the different business sectors?
Intangibles increases.
Tangibles decreases.
Intagibles are critical for:
Healthcare
Hight tech
Tangibles are critical for:
Consumer
Manufacturing
3 ways of extracting direct revenues from IP’s
- Use
- Sell -out
- Licence - out
How are we extracting revenue here…
Patent-protected inventions depreciate more slowly than non-patented inventions.
Branded products keep a premium price even when the imitation is complete
Use
Patent to have premium price and deal with imitation and avoid price fixing.
How are we extracting revenue here…
Give the IP to a third party in exchange of a payment.
Sell out
Draw back: is hard due to paper only. No certain future profit.
How are we extracting revenue here…
Private contracts the owner/assignee and a future user
Examples of agreements:
Payments: fixed fee + royalty
Exclusivity rights:
* exclusive use: one licensee
* non-exclusive: many Duration/ geographical scope: Obligation to use: royalties, effectively commercialized
License-out
Why is that the 99% of the license revenue in US is coming only from 40% of patents holders?
- Not interest in licensing.
- Finding licensors is difficult and requires resources
- IP strategy not directed at price premium/ revenues but protection.
- €12,000 in the USA
- €8,000 in Japan
- €6,890 in Europe with Unitary patent member countries (currently 17 countries)
- €9,750 in Europe, via EPO for 4 countries.
The costs of patenting
Exclusivity rights are very effective to prevent imitation, due to inventing around and violations.
False
Other uses of IPs
- HAMPER / DETER ENTRANCE OF OTHERS
- SIGNAL
- NEGOTIATE
Patent fence around their key inventions
- Hamper / deter entrance
Sometimes technological areas become so dense of patents and pre-existing
rights that it is difficult for a company to understand if and where it has freedom to operate.
Patent thickness
Startups use patents to show their value to potential acquirers
To make their R&D effort visible to the investors and
in balance-sheets (Tax benefits)
You can use IPs to get a loan
Signal
In consumers electronics each company needs to own its share of patents to _____ its space / prevent suits.
Negotiate
IP strategies
- Closed
- Semi-Closed
- Open
Monopoly as priority.
Litigation a la orden del dia.
Closed
Monopoly shared between more than one brand. The share could be done in many ways.
Semi open
Patent only to have the moral rights. Everyone can use it and you get benefits from their developments or uses.
You protect with:
Complementary assets
Lock in of customers
Lead Time
Open
The company knows that every innovation advantage is
temporary, but keeps always one step ahead of competitors
Lead time
