understanding the need to protect & develop ip
TRANSCRIPT
Understanding the need to protect and develop IP
Presented by: Jim Asher, Head of Valuation, Coller IP
Outline• Key elements of IP strategy for business and how to
develop a strong commercial position • Understanding the IP competition minefield• How IP is helping small business to finance growth and
the role of IP valuation
Intangible Assets and company value
Intangible Assets may be larger part of company value thanBalance Sheet assets
BS Asset value
Intangible Assets
Company value
Intangible assetsLegal
underpinningPeople-based
assetsRoutes to
market
Key questions for business…
• What Intangible Assets do you own?• Are they significant to your business?• Does your business own them?• How well are they protected?
– international protection?• What is their value?
Competition
• Who are your competitors?• Do you know what they are doing?
– What IP do they have?– Where is it protected?
• Freedom to Operate– …in the light of 3rd party IP
• Understand the risks you are exposed to!
IP Myths
• USA and Europe lead the world!– The picture is changing rapidly– USA patent environment is in chaos– China is a leading player in patent filings– Other Asian companies are rapidly adopting IP
strategies
IP Myths
• You can’t enforce IP in China!– China is changing rapidly – Patents can be enforced in China– You need to understand the system and work
within its rules
IP Myths
• There is no point filing for a patent if you cannot afford litigation!– Litigation is expensive and uncertain…but– IP should be used primarily to underpin
commercial negotiations– If you don’t have IP, you may increase your risk of
being litigated against– If you have a good case, IP insurance can be
obtained
$£€IP: routes to Finance
• R&D tax credits can help finance SME’s at the development stage
• Asset finance with pension funds• Software asset financing • Investors look for IP in targets for investment…in a successful company, intangibles determine value
R&D Tax Credits
Do these apply to your business?• Limited company, liable for corporation tax• Invested in innovation or development activity that
requires significant expertise and solves an industry or sector wide problem
• Invested in staffing (employees and contractors), software, consumable items, prototypes and materials
R&D Tax Credits
• The average claim for SMEs is £46,000• They encourage innovation in business• You could get up to 26% of qualifying costs back• Unlike other tax reliefs, UK government actively
wants you to claim them…• …only 4% of qualifying business currently claim!
Asset Financing
• Banks don’t normally lend against intangible assets
• There are some specialist intangible asset finance products– e.g. Lombard Asset Financing of Software
Pension fund financing
• Owner/director businesses– SIPP or SSAS pension scheme
• IP can be used as security for a loan or in a purchase/leaseback arrangement– Registered trade marks– Patents– Software
• IP is independently valuedwww.pensionledfunding.com
What value does IP have?
• IP provides exclusive rights– Maintains a premium price– Supports a market share
• Value of IP is in the additional profit it can protect
Similar to property valuation…
• Property can be bought, sold or leased– IP can be bought, sold or licensed
• Value of property is demand led– value may be hidden– if no-one wants to buy, value drops
• Cost to build ≠ Value
Valuation methods
• Cost-based – What would it cost to replace the future
capability of an asset?• Market-based
– Are there similar transactions in the market to provide comparators?
• Future income– What additional profits/cash will the IP
generate in the future?
…plus experience and independence
• Businesses• Investors• Lenders• Lawyers & Accountants• Insolvency Practitioners• HMRC
– Taxable events– Transfer pricing
Who wants to know…?
Summary• IP strategy is a key part of developing a strong
commercial position – identifying key intangible assets, securing ownership and protection.
• IP is a lever to stay ahead of the competition, but do you know who is competing where and what they have?
• IP can help small business to finance growth• IP valuation is used to secure finance, in commercial
negotiations, M&A, restructuring and litigation
Contact details:
Jim Asher
www.collerip.com
…making the intangible valuable