I’ve always been a fan of science fiction; books, films, graphic novels – you name it. The possibilities when it comes to technology are endless in these imaginary worlds. I’ve often wondered why modern life is so slow to catch up to the ideas proposed by science fiction writers. Look at Bladerunner, for instance, that film (based on the essay by Philip K Dick) is set just six years in the future in 2019. How likely is it that Earth will have colonies on other planets or androids in six year’s time?  It seems unlikely.

Occasionally, however, there are steps forward in technology that sound just as remarkable as science fiction. I’ve discussed 3D printing in this magazine before but I felt it was time to revisit the subject due to some amazing advances over the last year, not just for retail but for medicine, manufacturing and other industries. In fact the idea of 3D printing has evolved into 4D printing.

Carlos Olguin is working on this in his role as the director of the Bio/Nano/ Programmable Matter Group at software giant Autodesk. He be lieves that in the not too distant future consumers will be able to buy a chair from Ikea and then watch it assemble itself. The same technology is also being used to research cancer fighting nano-robots that are implanted in the body to find and destroy cancerous cells. Suddenly Bladerunner is sounding more and more plausible.

3D printing is the process of making a three-dimensional solid object of virtually any shape from a digital model. The technology, which has been around for years, is used to make scale models and is increasingly being used to make consumer products. Companies such as Nokia, Disney and London-based start-up MakieLab – who sell 3D printed, customisable dolls – all offer 3D printed items.

The solid object is achieved using an additive process, where successive layers of material are laid down in different shapes.  A materials printer usually performs 3D printing processes using digital technology.  Since the start of the twenty-first century there has been a large growth in the sales of these machines, and their price has dropped substantially.  In January this year Nokia released design files that will let owners use 3D printers to make their own cases for its Lumia phones. Files containing mechanical drawings, case measurements and recommended materials were released by the phone maker so customers could create a custom-designed case for the flagship Lumia 820 handset. The project made Nokia one of t he first big electronics firms to seriously back 3D printing.

John Kneeland, one of Nokia’s community managers, revealed the Finnish phone maker’s decision to release the 3D drawings.  “Nokia’s 3D printing community project is a simple concept with exciting potential,” he says.  “Our Lumia 820 has a removable shell that users can replace with Nokia-made shells in different colors, special ruggedized shells with extra shock and dust protection, and shells that add wireless charging capabilit ies found in the high-end Lumia 920 to the mid-range 820. But in addition to that, we are going to release 3D templates, case specs, recommended materials and best practices – everything someone versed in 3D printing needs to print their own custom Lumia 820 case. We refer to these files and documents collectively as a 3D-printing Development Kit, or 3DK for short.”

Speaking about the potential of 3D printing Kneeland adds: “When I first saw 3D printing in action, I felt how I imagine people felt when they saw the very first steam engines. The earliest examples of steam engines were incredibly expensive, finicky, and quite limited in what they could actually do. Every great invention starts out as but a faint shadow of what it will become.  Today we can print cases made of only one or two materials, and the machines are limited in what they can make, but that itself is incredibly exciting-and the future even more so.  “My own view is that the hype is justified, and that 3D printing is indeed A very big deal. I don’t think it’s an exaggeration to call it the sequel to the Industrial Revolution. However, it’s going to take somewhat longer to arrive than some people anticipate, and that may disappoint people. For now, it’s a bleeding-edge technology for bleeding-edge early adopters-which is exactly where Nokia is aiming its 3D printing community efforts.”

Some of those disappointed people have already taken up the cause of the slightly more controversial side of 3D printing on-line. Defcad, operated by Defense Distributed, is a makeshift site is more about the creative use of the technology. But you can that hosts mostly firearms-related 3D files. The site’s founder, Cody Wilson, says Defcad was started in response to MakerBot’s decision to remove 3D gun files from its catalogue. He believes Defcad represents true freedom of information and says they won’t bow to copyright laws.

Jackie Maguire, CEO, Coller IP, observes: “When it comes to protecting intellectual property and 3D printing there are quite a variety of different things to consider. The 3D printers themselves and software behind that. the design templates and operating systems and the materials that are used.

“People using personal 3D printers at home might be reproducing designs of products that are protected by registered 3D trademarks. Some perfume and whisky bottles, for example, have 3D trademarks.  Jean Paul Gautier’s perfume bottles are very characteristic - and the coke bottle; you recognise it as soon as you see it.   Recently there was a case in China brought by Chivas Whisky because their distinctive whisky bottle was being reproduced. The bottle has a registered 3D trademark so the case was brought to court for infringement and damages were paid.”

“In relation to 3D printing it’s not only the label they put on the bottle it’s the shape of the bottle itself. Before consumers buy access to a 3D design – a template off the shelf to produce at home – they are going to need to check that they are not infringing designs and copyrights.

This could be difficult to police, however. The end user could request “infringement free template”s, or whoever sells the template may have to provide assurance that they will not infringe other people’s rights.   The right to sell on to other people would need to be obtained through a licence.

“3D printing is certainly exciting,” she continues. “It bring customisation to a whole new level. but protecting intellectual property may require a different approach. There is a debate in IP world generally between control or open source. I think for the 3D printing revolution to take place there will have to be a paradigm shift in peoples’ ability to gain access information. The internet shifted the way the world works and legally we have accommodated that. There is no reason why 3D printing cannot takeoff, but in compliance with the law.

“Of course, when it comes to the internet. the illegal download of music and films is still ongoing. These sites are gaining great cash value through infringement. There is great commercial potential in 3D printing and the end user gets flexibility of use and choice of what they can have. They can design their own furniture or kitchen gadgets and decide on the colour and size they want to have.

“When you are looking at consumer goods it’s not too difficult to imagine a complete step change in the way that goods are sold. 3D printed products are not as neat and tidy at the moment as they could be. But it’s not beyond the imagination to think of a home having its own 3D printer. It is even possible to print cheese and chocolate now. At the moment 3D printing is more about the creative use of the technology that would someday be able to make you a sandwich. Still a way to go yet, but not out of reach.”

Disney have already started to use 3D printing as part of their toy manufacturing process. Printed Optics is a new approach to creating custom optical elements for interactive devices using 3D printing. A Disney spokesperson explains: “Printed Optics is part of our long term vision for the production of interactive devices that are 3D printed in their entirety. Future devices will be fabricated on demand with user-specific form and functionality.  Printed Optics explores the possibilities for this vision afforded by today’s 3D printing technology.”

London-based, MakieLab, have taken the process a few steps further and offer fully 3D printed, customisable dolls called Makies, through they transactional website. That site launched in alpha in May 2012, the company raised $1 .4 million from early-stage investors in June that year, and in March 2013 MakieLab released an iPad app called Makies Doll Factory to help people make and order Makies from their tablet.

Granted there are problems to be ironed out when it comes to 3D printing. Control or open source, copyright infringement, the decline in manufacturing and design jobs that could potentially come about. Yet for multi-channel retailers 3D printing could offer a level of instant consumer service never seen before. Imagine not having to wait for delivery when you buy an item online. Imagine just being able to print it at home. It is still some way off, but with the price and size of 3D printers falling, it may not be long before we have one on our desktop sitting alongside our PC.

Published in Retail Systems April-May 2013

Interest in securing value from intangible assets through strategic management of intellectual property has grown considerably in recent years. This is partly because of the growing awareness that typically, up to 80% of most companies’ value* now evolves directly from intangible assets, including intellectual property (IP) – and also because of the rapidly increasing threat from counterfeiting.

The threat to the financial services industry – as well as businesses more generally – from continuing economic uncertainty and increased regulation makes consideration of the strategic use of intangible assets imperative. Some firms are starting to realise that IP is a way to differentiate themselves in this sector and that intangible assets can play a major role in raising funds and finance.

The number of patent application filings in the financial services sector in the US from fiscal years 2002 to 2010 increased from 7,400 in 2002 to 17,231 in 2010 while the number of insurance patents has increased by over twenty times from a rate of around 15 in 2002 to 332 in 2012.**

However, because it can be challenging to manage intangible assets effectively in a business, including determining who is responsible for them, intangible assets are often misunderstood and therefore undervalued on the balance sheet.

Intangible assets can be considered in three main groups.Intellectual Property means protection of your products, services and brand by patents, trademarks, copyright, designs and trade secrets. Intellectual Assets (IA) relate to the people-based assets of a company, including key skills, know-how and processes; the way your people do business. And finally, Intellectual Capital (IC) encompasses the other intangible assets of a company, including relationships, branding, reputation and contracts which provide the route to market (see diagram).

As with other assets, IP can be valued, bought, sold or leased. Many companies have significant intangible assets not currently recorded on their balance sheets. These can include trade marks, domain names, websites, order books, customer lists, copyright in training materials, software, and patents. In many cases these are tradable commodities with an associated cash value. In addition, intangible assets can allow (in certain circumstances) for the trustees of a pension fund to purchase and lease back an asset from the company releasing cash to the company and providing a return for the pension fund. It is possibly a strategy, too, for retirement, since patents can (in certain circumstances) continue to provide licensing revenue.

Many organisations are struggling to secure capital to invest in the growth of the business and many pension funds are struggling to make good returns on their investments so using IP can be a good solution. This option is still not widely realised.

As Clifton Asset Management says,

“Around 40 per cent of the UK’s SME owners have funds in pension schemes which could be immediately deployed through IP and pension-led funding. This would create an estimated cash injection of £100 billion into the UK’s SME economy.”

Some companies may use IP-based pension-led funding as their only source of business finance while others find that it works well alongside traditional lending options. Organisations such as Clifton Asset Management work closely with bank advisors to encourage them to add pension-led funding to their portfolio. Such companies can help organisations comply with HMRC rules on utilising an independent IP valuation in order to arrange a lease with a pension fund.

To quote Clifton Asset Management’s sister company, Morgan Lloyd, “Investment in Intellectual Property can create an alternative type of business funding whilst creating a safe haven for tax efficient growth. By transferring Intellectual Property into a SIPP, it is protected from creditors and competitors and the client’s pension fund also receives a substantial investment return for the usage of the Intellectual Property.”

In order to use IP assets as collateral to obtain finance, organisations need to be able to prove they have a cash value which is lasting and with a realisable market value. All this depends on a properly established valuation. While it may seem obvious that organisations selling or acquiring a company or portfolio, or those wanting to use IP as part of a pension fund should establish what intangible assets exist, whether they are live and valid, their value, and whether they are fully protected in all jurisdictions, unfortunately this does not always happen as well as it could.

Even if the assets have been included on a balance sheet, IP is often not valued accurately enough, in part because it is not always straightforward to do so. Identifying the intangible assets usually involves carrying out an audit to identify them and working out which of them are of significant value. A number of different approaches are used to measure value. Examples include the cost approach, the market approach, the income approach, or a combination of each.

Following an audit, IP specialists will undertake a landscaping exercise in order to understand the intangible assets that are of value. This includes assessing the company’s position vis a vis existing or potential competitors, as well as identifying possible opportunities for further exploiting any IP.

Not all IP assets are appropriate for raising funds, and a valuation and assessment process may reveal that it would be better to use IP assets deemed as not core to the business to raise cash, for example by selling them.

The monetary value of the assets will depend on how securely the assets have been protected. It is important therefore that protection is as robust as possible.

Business Action To Stop Counterfeiting and Piracy (BASCAP)***claims that the total global economic value of counterfeit and pirated products is as much as $650 billion every year, with international trade accounting for more than half of counterfeiting and piracy estimated at $285 billion to $360 billion.

Research from The Intellectual Property Crime Group (IPCG) has revealed that 40% of businesses surveyed took no practical action such as trade mark registration or employee training to ensure their IP and that of others is protected.

**** It is important to consider the protection of all relevant trade marks, which can of course include words, logos, sounds, colours, gestures, brand names and slogans—in fact, any distinctive feature which can be represented on paper and which can distinguish the goods or services of one business from those of another. They can even consist of 3D shapes.

Patents that protect the functionality of new inventions – including processes or devices – can add real value.

In addition, copyright, registered designs, database rights, and trade secrets can also play an important role in protecting intangible assets.

Intellectual Property is a powerful, flexible and effective business asset, and like other assets it needs to be understood, protected, and reviewed regularly. It needs to be used judiciously – using it as a financial vehicle for example may not be right for all organisations depending on their circumstances. But applied appropriately, the outcome can be highly beneficial to all parties.

*Figure quoted in ‘Making the Intangible Tangible’, a report prepared by PWC for the Australian Copyright Council

**Source: United States Patent and Trademark Office

*** Source: Estimating the Global Economic and Social impacts of Counterfeiting and Piracy – A Report commissioned by Business Action to Stop Counterfeiting and Piracy (BASCAP) February 2011

****Source: IP Crime Group 2008/9 Crime Report -http://www.ipo.gov.uk/ipcreport08.pdf

Click for full articles published by Global Banking & Finance Review

In today’s knowledge based economy, typically 80% of a company’s value can be derived from its intangible assets. It is not surprising that organizations are increasingly dependent on the ability of their management teams to harness and convert these assets effectively into sources of revenue – and in some cases to insure against their loss.

Most people would agree that the late 1980’s to early 1990’s were the springboard for the ‘knowledge-based economy’ and the trend that has followed shows no signs of reversing. As the value of many physical assets declined, conversely the value of intangible assets grew – and with this trend, an understanding that it was not only possible, but vitally important, to put a real monetary value on those intangibles.

Where the value lies

There are three areas that contribute to most of the value of today’s businesses:

• Intellectual Property – providing legal protection
• Intellectual Assets – deriving from the people in the business
• Wider Intellectual Capital – providing the channels for realizing value

Successful businesses protect and manage all three areas.

When intangible assets are not effectively and consistently safeguarded and their risks managed, they become less valuable, and this can lead to an undermining of competitive advantage. Unfortunately, many businesses still fail to recognize this fact. It is not just security and risk management practitioners who have had no training about intangible assets but often c-suites (senior executives), boards, and stakeholders have little insight into the specific risks posed to company value.

Whoever takes responsibility for an organization’s assets, whether the accountability is explicit or not, it is essential that the management, development, acquisition and utilization of intangible assets becomes aligned with the core business strategy, security strategies, and risk management strategies, rather than being considered solely as intellectual property based legal processes. This required shift in best practice runs parallel to the inclusion of ‘return on security investment’ (ROSI) concepts in the security-risk management equation. A good understanding of an organization’s assets is essential for managing, amongst other things:

• Business continuity, contingency, organizational resilience planning
• Sustained market share and competitive advantage
• Intangible asset threats, disputes, risks and challenges, and responses
• Mergers, acquisitions, new ventures
• Venture capital investments
• Early Stage Companies
• Corporate activities, eg university research partnerships

Intangible Assets have amongst other benefits, the advantage of providing:

• competitive edge
• licensing revenue from non-core markets
• a convincing story for investors
• collateral for financing
• collateral for counter-defense
• a mechanism for gaining tax benefits

However, given the global volume of intangible asset intensive/driven companies, when security challenges and risks materialize, the contributory value of the (intangible) assets can quickly drop to zero. That’s especially true if safeguards, due diligence, asset monitoring, and risk management practices are either not in place or are ineffective. Threats to intangible assets can materialize instantaneously and simultaneously, and spread through an enterprise to produce long lasting and even permanent adverse economic affects to a company’s competitive advantage, R&D, reputation and relationship capital.

When providing independent valuations for a wide range of purposes including M&A, Director Disputes, Restructuring, IPO’s etc, we frequently encounter a number of common issues that act to reduce intangible asset value. These include:

• IP Ownership issues such as poor chain of title;
• Lack of technical relevance such as claim coverage of patents;
• Geographic constraints;
• Brand impairment;
• Careless licensing;
• Disclosure prior to protection/registration;

Many of these issues could be mitigated by early due diligence and appropriate IP management.

The characterization of the problem is not solely related to intellectual property, such as patents, trademarks, copyrights, and trade secrets. When 80% of a company’s value and sources of revenue can evolve directly from intangible assets, of which IP is just one, it’s prudent to assume that a number of adversaries are also seeking the know-how, in other words intellectual, structural, and relationship capital (intangible assets) that underlie and/or are by-products of any and all IP.

So it follows that if key employees leave, perhaps because they are unhappy about a possible change in the company’s structure, there is a risk that their knowledge may leave with them. Written materials, customer contact lists and bespoke materials can also form part of the intangible assets at risk. Ideas and inventions may be fundamental to the company but the wider intellectual capital is often the key to driving growth, profitability and access to markets. If these ‘crown jewels’ of a company are allowed to dissipate, in today’s knowledgebased economy the risk is great indeed. Many countries are now in the early stages of a second generation of citizens who possess the capability to create large scale manufacturing facilities to produce the various products and/or services that with some frequency emanate from infringed, stolen, misappropriated or simply copied intangible assets and IP.

Being prepared

Initially, managing risk associated with intellectual assets may seem a daunting task if this has not previously been fully  addressed. But unless the risks can at least be scoped out, then it is a challenge to procure assurances, such as insurance, to mitigate the key risks. There are two sides to the equation. On the one hand it is important to secure the ownership and enforcement of the Intangible Assets of your organization in order to protect your market share. However, this has to be managed in parallel with the need to preempt any threats of enforcement of rights from third parties who may own assets that can be asserted against your organization.

This means:

• knowing and understanding what you have and why it is valuable,
• knowing who the Intangible Asset competitors are, and
• what they have that could impact on your organization’s value.

The Intangible Asset competition is not necessarily the same as the commercial or market competition and can be previously unknown to the organization. There are a number of patent holders who do not manufacture or distribute goods, yet will assert their rights when an organization becomes sufficiently successful to make a challenge worthwhile. Some of these so called Non-Practicing Entities are aggressively seeking damages arising from the infringement of intellectual property rights – others may be prepared to sell or partner to gain benefit.

We have helped many clients understand where their assets sit on the IP landscape – which is a first and effective step in knowing the Intangible Asset competition and the threats that should be managed and those that might necessitate insurance. Others include an assessment of key personnel and IP terms in contracts relating to employees, suppliers, clients and partners.

Further actions to be taken

So how should managers enhance their understanding of the need to minimize the risks to intangible assets? Clearly, if an IP professional is part of the company, the senior management team can work closely with that individual, or perhaps take advice from a specialist external IP specialist. In either case, the following steps need to be taken:

• identify the full range of intangible assets owned by the organization;
• identify the intangible assets that represent high value
• identify and mitigate for gaps (disconnects) between
  • IPRs and products/services
  • computer/IT security
  • competitive intelligence and data mining
  • economic/industrial espionage
  • recruitment and covenants
  • commercial (supplier, client, partner) contracts and functions
  • R&D agreements and functions
• ensure that there are no value limiters as illustrated above
• align the company’s intangible assets with (its) core business and
• strategic planning initiatives, in other words
  • utilize intangibles commensurate with their value
  • functionality cycles, and
  • articulate and position intangibles to render the company more attractive to trade and investment opportunities.
• and then seek protection via further registration and/or acquisition of IP and/or as appropriate invest in assurances such as insurance policies

Conclusion

The intangible asset based economy in which we’re in the midst, albeit in its early stages of development, shows no signs of reversing.  In most situations, the consequences of intangible asset losses are that value/competitive advantage is undermined, and that impact on reputation is increasingly immediate and frequently irreversible. Once lost, compromised, or undermined, the value, revenue, competitive advantages and strategic positioning of key assets and a company’s reputation are extraordinarily costly to regain and seldom, if ever, fully recoverable in a timely manner.

This makes it all the more important that senior managers engage with IP Specialists who lend their expertise to ensuring a company’s intangible assets are consistently and effectively safeguarded and positioned; so that together they realize the economic and competitive advantage benefits which companies are generally capable of delivering.

A pdf of the article in IP Risk Management and Insurance can be downloaded here

The article together with other useful information on IP Risk Management and Insurance is also published on ipriskandinsurance.com

The MAS website www.mymas.org provides details of the support that MAS makes available for patent searching, IP strategy and advice and IP review audits.

Coller IP looks forward to working with existing and new clients making good use of the funding available for innovation and product development via the MAS network.

The decision by the Australian courts to make plain packaging for tobacco products compulsory came into force on 1 December 2012, and it has reawakened interest in the world of intellectual property and packaging. The consequences of the move – Australia is the only country in the world so far to have passed and enacted legislation – are being monitored by governments around the world, not least by EU authorities; and a similar law has been proposed for the UK, where a government consultation closed in August 2012.

One argument against such a law is that generic packaging would make it harder to prevent smuggled and counterfeit products entering a market, and that the restriction of valuable corporate brands by any government would risk placing it in breach of legal obligations relating to intellectual property rights and international trade.

Mark of success

The fight against counterfeiting today includes placement of security devices, overt and covert, in and on product packaging for many goods, including foods and alcohol, the imaging supplies industry, and high value sports shoes.  The counterfeit market in the UK is estimated to be worth around $21.6 billion each year – US$663.5 billion globally according to the Anti-Counterfeiting Group UK – and the packaging industry has a big role to play in the fight against it.

Understanding how Intellectual Property Tools can protect intellectual property is vital for those involved in packaging.  There are a number of intellectual property rights to consider.

Trademarks are words, logos, and devices – that is, distinctive features that can be represented graphically and can distinguish goods or services of one business from those of another.  They can include logos, sounds, colours, gestures, brand names, and slogans.  They can even consist of the shape of goods or their packaging.

In order to register a trade mark in the UK it must be possible to define it in writing. In addition, it must be distinctive for the goods and services you use it for.  In the UK, look-alike and ‘copycat’ packaging in theory fall foul of the Trade Marks Act, under which it is prohibited to use branding which, without a good reason, exploits the distinctive character and reputation of well-known registered trademarks.  They differ from counterfeits by exactly copying the brand-owner’s trademarks. Once confined to luxury products, they are now increasingly targeting day-to-day items.

Many look-alike manufacturers argue that shoppers can easily tell the products apart and so it can be difficult to bring a case for passing off or infringement. The challenge is being addressed to some extent through training of prosecutors by the CPS and Intellectual Property Office to build successful cases against counterfeiters.

Patents protect the functionality of new, unique inventions on a country-by-country basis through national patent offices, though there are some regional systems for filing, such as the World Intellectual Property Organization (WIPO) or the European Patent Office (EPO). A patent protects the inventor’s right to its exclusive use. For an invention to be patented, the patent office will need to establish that it is really new and not obvious, that it involves a real invention and that it is capable of industrial application.

Registering a design gives the creator additional legal protection and protects the overall visual appearance of a product in the geographical area in which it is registered. In order for it to be registerable, a design must be both original, and have ‘individual character’.

Picking up the pace

We identified around 15,000 patent families relating to aspects of food packaging that have been filed over the past 20 years. This is a buoyant area of patenting, and the rate of filing has been steadily increasing during this period. Major patent holders from this analysis include: Tetra Laval Holdings (438 patent families), Cryovac (335), Du Pont (210), Nestec SA (181), and Kraft Foods Global (169). Other players in this patent landscape include Procter & Gamble, Sonoco and Fina Technology.

Patenting portfolios cover many areas of packaging technology. For example, the 2011 Annual Report for Graphic Packaging Corp states the company’s portfolio consists of patents relating to packaging machinery, manufacturing methods, structural carton designs, microwave packaging technology, barrier protection packaging, multi-wall packaging and manufacturing methods. Patents are supported by trademarks – for example, Z-Flute (Graphic Packaging) for laminated folding cartons and Cryovac QuickRip for plastics bags for food products.

Intellectual property including copyright, are powerful business assets for those involved in packaging, and like other assets they need to be looked after, protected and applied effectively. Ignoring these issues is like leaving the office unlocked when you leave – an unnecessary risk to the business.

Click here or below to listen to the recording.

“Managing Intangible Asset Value and Risk” provides an overview of how the value of IP has grown in the market place over the past 10 years. It tells the story of Coller IP’s development and looks at how IP is becoming a prominent asset class even though it may still be under-represented on many companies’ balance sheets. Like other assets, IP can be valued and the webinar discussed how the right intangible assets have added major value to businesses – and the importance of having a good IP strategy in place for today and tomorrow.

“”A journey of a thousand miles begins with a single step” is the famous statement of Lao-tzu, The Way of Lao-tzu, Chinese philosopher (604 BC – 531 BC).   In my experience, all enjoyable journeys start with a first step. There is nothing more satisfying than building up a new business or tackling and overcoming a market failure.  It is good to be able to make a difference, no matter how small.”

It was that first step into Jim Asher’s office in Accentus Plc some ten years ago that led to the development of Coller IP’s alternative and full IP business service that exists today.  At the time, Jim had been the IP director at Accentus plc, a technology commercialisation arm of AEA Technology and he had management responsibility for some 4000 patents and for servicing the IP needs of six or so technology spin out companies at varying stages of commercial development.

I had held several business development director and operational roles and had some 15 years technology transfer experience, working with business managers whose challenge it was to take new technologies and services to market. I had observed how business managers had found it difficult to sustain a business – how quickly even the most intelligent of managers could be outsmarted and leapfrogged by competitors. I had also had some challenging conversations myself with some excellent attorneys who didn’t wish or have the time to converse in the everyday language of the commercial businessman.

Over several cups of coffee, it rapidly became clear that our combined experience could usefully be deployed to overcome a number of challenges that we believed existed at that time:

• Business managers knew very little IP but needed help to monetise its benefits.
• The IP system was (and still is) a complex mystery for those who are not steeped in it.
• Patent attorneys were speaking a different language as far as many business managers were concerned.
• Very few business managers understood why and how the costs associated with IP management were incurred and the overall investment required to take new technologies to market (and few attorneys were able to advise them).

We felt that a more strategic approach to IP was required in a language that business managers and investors could understand. This was not then widely available from IP professionals and so Jim and I set out to provide a programme of workshops that we could test in the marketplace.

Within six months, our fledgling consultancy, backed by the much-needed advice from qualified attorneys and analysts became established. IP Solutions was on the map.  In a previous role, I had run a number of government-funded programmes, which were designed to communicate new ideas to different market sectors; so when an opportunity came up to communicate important IP issues to the motor sports industry we capitalised on that experience and grabbed the opportunity by the horns.

Running this outreach programme reinforced our beliefs that the challenges for a greater strategic management of IP could be met and that better communication of IP issues in business was possible. We were delighted when the survey of those taking part in the programme showed how much they appreciated our approach.

It was this programme, which was funded by the then progressive East of England Development Agency, together with a number of acquired clients associated with operations and spinouts from the body corporate that convinced us to take the business forward as a stand-alone entity. Our vision – which is still relevant today – was for IP to be recognised as a tradable asset. Our aim is for IP to be an item on board room agendas.

The market need and desire for greater commercial and strategic IP services became evident and Jim and I were in the process of discussing an MBO when serendipity struck! AEA Technology Plc decided to sell off some of its non-core assets and during the discussions that followed, we met our current shareholder, Jeremy Coller.  Excited by discovering that we all shared a common vision (for IP to be recognised as a tradable asset) we investigated the options for realising our goals.

We were aware of the requirements and traditions of providing patent and trade mark services and we debated the pros and cons of developing an alternative offering within such an established sector. We were also aware of the expectations for return on private equity investments. But nothing ventured – nothing gained!

By pooling our interdisciplinary expertise in investment and IP management and commercialisation, we set about investigating the requirements for strategic management and monetization of both large and seedling IP portfolios.  In the early days we named the company Coller IP Capital Ltd. Experience soon taught us that the financial management of high-level investments needed to be from within the City investment teams where Financial Services Authority requirements could be met. However, strategic IP management and monetisation needed technical, legal and commercial expertise, careful due diligence and detailed execution – something that could be provided by Coller IP Management Ltd. As all successful businesses should do, we focused the two functions appropriately and accordingly and the first crossroads in our journey had been navigated.

It wasn’t without scepticism, however. As new kids on the block we faced some opposition – established firms challenged our status – often resistant to change or progress.  Our patent and trade mark attorneys provide a firm foundation for Coller IP, not only in governing the prosecution and maintenance of the IP portfolios under our care, but also in the strategic protection of the value in the wider range of intangible assets that we consider for our clients. We are all scientists and engineers by training, but the combination of patent and trade mark attorney skills coupled with commercial and business expertise allows us to provide a critical combination of technical, legal and commercial perspectives for our clients – or what we call “TLC for IP®”. Our activities supporting the sale and purchase of IP portfolios (including IP due diligence, seminal patent evaluation, IP landscaping, strategic portfolio management, etc) all benefit from Coller IP’s TLC for IP approach using multidisciplinary teams.

Businesses have welcomed a fresh approach and our client base has grown from a few UK spin outs to today’s 300+ clients from around the world. Still with a strong UK base,we also have clients across the US, Japan, Hong Kong, Canada, Middle East and Europe.

As we worked with a greater number of companies and investors, helping them to shape their IP strategy and monetise their IP, increasingly, we were needing to pinpoint where the greatest value lay in their businesses and/or investments. Jim had hands-on experience in valuing IP in start-ups and spin outs and I had the strategic insight into boardroom discussions around the widest applications of intangible assets. The need for our IP valuation practice grew as we were able to provide the accounting methodologies alongside the ability to consider the technical, legal and commercial strengths and weaknesses of the IP. Today, our IP valuations serve a range of purposes, including M&A, IPOs, director disputes, litigation, royalty rate negotiations, pension transfers, restructuring, insolvency – and even probate and divorce. IP assets are increasingly coming into play in all walks of business and lifestyle planning.

Coller IP is a commissioned member of an IP Valuation Expert Group, which is looking at the current trends in IP valuation, particularly in relation to raising capital. Surveys suggest that since 2000, an increasing share of companies are using patents strategically to create firm value – as has been borne out by the trading in patent portfolios over the past two years (e.g.: Google-Motorola and Rockstar-Nortel deals). It has been fascinating to be part of the discussions in fora such as the IP Business Congress during these emerging market transformations and already to be travelling as a keen practitioner whilst we see these first significant public deals taking place.

Our close involvement in IP transactions has led us to enter the brokering market, which has been an exciting leg of the journey as we close deals and move ever further towards IP being seen as a tradable asset.  Alongside a transforming market, we have also experienced the new path mapped out by the Legal Services Act. We always set out to provide an alternative business solution and now the Act has provided us with the prospect of an appropriate emerging title for our entity – an alternative business structure. The consultations have yet to reach the extent of discussing a fully developed alternative business structure – at the moment they focus on just the tiny first step away from a traditional business – perhaps just incorporating one non-lawyer in directing the business.  But it’s good to see how the industry might develop, and as we know, every journey starts with the first step…

As the new regime has unfolded, so too has our work with other professional advisors, including accountants, lawyers and attorney firms. Their interest in IP landscaping, valuation and brokering has outweighed their worries or perceived threats to working with a potential competitor. The collaboration has been a good experience and delivered greater value to clients.

It has been a challenging decade, and we have travelled a long way – we have discussed IP with business board members and we know that companies now regularly report IP dashboards and realise the benefits. We have observed the market as it trades in IP assets, as IP asset transfers take place between companies and pension funds in order to raise finance – and as investors have grown to recognise the importance of properly evaluating IP. We are travelling on our journey – no doubt there are many more steps to take!

References

1. OECD Science, Technology and Industry Working Papers, 2006/05, Valuation and Exploitation of Intellectual Property.

2. IP Business Congress run by IAM Magazine: www.ipbusinesscongress.com/2013/

The full article can be obtained via the CIPA site.

With over 1900 new generic top-level domain (gTLD) applications in various languages and scripts, the internet is about to get crowded with generic and brand specific domain names, for example .google .amazon and quirky ones like .ninja and .ketchup! Whilst this is great news for promoting competition in the market and to enhance consumer choice, this will inevitably conflict with trade mark owners’ rights in the ever-growing world of virtual presence.

In an attempt to protect IP rights and to minimise cybersquatting of the new gTLDs, the Trademark Clearinghouse (TMCH) was launched on the 26 March 2013 by the Internet Corporation for Assigned Names and Numbers (ICANN). The TMCH holds a centralised database of validated trade marks and serves two main functions known as the Sunrise Service and Trademark Claims Service.

Before a new gTLD becomes available for general registration, there is a “Sunrise Period” of at least 30 days. During this period, the owner of a trade mark entered in the TMCH database will be afforded the option of registering the domain name that matches its trade mark, for nearly all cases, in its exact form. At the end of this period, the door for registration opens to the general public.

The Trademark Claims Period follows the Sunrise Period and lasts for at least 60 days. When an attempt is made in registering a domain name that matches a trade mark in the TMCH database, the potential registrant will receive a notification and be warned of the existing trade mark rights. Upon actual registration, the corresponding trade mark holder will be notified of the registration so that they may pursue enforcement action should they so wish.

Even if a trade mark owner is not interested in registering its own brand as a new top level domain name, registration at the TMCH may still be useful as a way of keeping track of who is out there with your trade mark. As these services are based on trade marks matching the new domains exactly, they should be used alongside existing domain name / trade mark watching services. Any trademark holder, private person, or company can submit their trademark to the Clearinghouse, for a fee or an agent such as Coller IP can do this for you.

Call us on 0870 402 1616 for further information.

The plastics and rubber industries are continuously looking to invest in new innovations to drive future growth. However, in the drive to develop new, innovative products and get them to market, ensuring that every aspect of intangible, as well as tangible assets, is addressed is sometimes neglected.

With up to 80 percent of a company’s value now typically deriving directly from intangible assets, including intellectual property, it is vital that companies not only ensure they are not infringing the IP rights of another, but also that they have adequate protection around their own designs, products and processes. Cheap and counterfeit versions of products appearing on the market can deprive a company of income and may damage its reputation.

Companies should understand the difference between the various forms of intangible assets. These comprise intellectual property (IP), intellectual capital (IC) and intellectual assets (IA). Intellectual Property includes the patents, trademarks, trade secrets copyright and so on that are used to protect inventions, a brand name and products and services.

Intellectual Assets include the people or knowledge-based assets of a company – for example, key skills, know-how and processes – i.e., the lifeblood of a business. Finally, Intellectual Capital means the way a company does business, for example through relationships, branding, positioning, contracts and reputation. All three categories have a value.

There are three principal steps to think about when it comes to intangible assets. These are understanding their nature, including their value; next, protecting them; and finally, ensuring you know how to exploit them in line with your business strategy going forward.

The first task is to undertake a thorough audit of all of the intangible assets in the organisation. This includes not just patents, trademarks and designs but the wider intangible assets. Such identification of all the valuable intangible assets in a company can be done internally or by calling in outside specialists to undertake an audit and landscaping exercise.

Next, a company needs to ensure that protection is as watertight as possible. Obtaining patents for innovative developments and inventions gives an individual or organisation the rights to stop others from making, selling, licensing, distributing or otherwise profiting from your invention for a limited period of time in exchange for a public disclosure of that invention. If an organisation is trading, or planning to trade, internationally, the issue of protecting intellectual assets across the globe can be quite intricate. Wherever possible a company should register its IP rights in its key geographical markets. Contract terms are important, for example, to stop employees taking ideas to a competitor and particularly where collaborations with third parties on products are concerned. They should include provisions for obligations of assignment and cooperation as well as confidentiality.

Attitudes to IP protection vary widely from country to country. Although the situation is improving, in some countries such as China and India for example, some foreign companies have encountered difficulties in when trying to prevent others using their IP, often because reproduction of goods and designs historically has been how business is done in those countries.  Employees may sometimes not even know that such reproduction is forbidden. An example is American plastic table manufacturer, Lifetime Products Inc., who last year won its first victory in its patent litigation in Chinese courts. The Shanghai First Intermediate Court ruled that Chinese competitor, Bestem, infringed on one of Lifetime’s Chinese patents. However, the company and Bestem are still in dispute over other claims.

However, there is ground for optimism. INTIPSA (International IP Strategists Association) of which Coller IP is a founder, has recently published a new report on the IP regime in China.  It concludes that the role of IP and its enforcement in China is much more advanced than most people realise: “IP law in China is of a high quality by global standards and the quality, cost and timeliness of the “rights” (patents and trademarks) granted to foreign firms under Chinese law compare well with the rest of the world. Enforcement of patent rights is much cheaper and faster than in most developed countries. The courts, including the IP Tribunal of the Supreme Court, are handing down some very sophisticated judgements, although the ability to enforce varies in different parts of China.”

One area where the plastics and rubber industries are continuing to innovate is the field of plastics additives and masterbatch technology. The global masterbatch market is now predicted to reach $8.25 billion by 2017. This growth has been driven by significant innovation that has enabled the use of plastics for an ever-increasing range of applications. The level of research and development within this sector is reflected by the rate of filing of new patent applications. Figure 1 shows the number of new applications relating to masterbatch technology filed each year during a twentyyear period. This analysis shows a recent rebound in activity with the number of new applications in 2011 more than double that seen during 2009.

In an innovative industry it can be difficult to spot the areas of key technological advance and to steer a path that avoids the potential for infringement of third party rights. Understanding the relative position of products, processes and machinery to competitor patents is important for business decisions relating to investment in innovation, development of a new product or sale, or acquisition of a business.

One way of understanding competitive position is the generation of a patent landscape, which can help a company in the process of evaluating its IP. In simple terms, the landscape is formed through an analysis of the most frequent words and phrases within a focussed set of documents. Returning to our example of masterbatch technology, a landscape is shown in Figure 2 for patent families filed during the last ten years. In general, patent families positioned closely on a landscape can be considered to be related technically and the contours show areas of high patenting activity.

The masterbatch technology landscape shows innovation in a wide range of applications for additive masterbatches, for example improving electrical conductivity, producing biodegradable polymer products and process improvement. The landscape also shows that companies continue to develop new technology for colour masterbatches and rubber compositions. A good IP analyst will work with closely with a business to focus on the key information required from the landscape to help facilitate business decisions. Specific ‘contours’ within the landscape may be analysed in detail to highlight significant innovations in a specific technical area and the landscape can be analysed for the patent holdings of key competitors, work around strategies and acquisition targets.

Once assured that all necessary protection is in place, individuals and companies from startups to the largest corporations can ensure they are in a good position to focus on what is important to them – developing their inventions and growing their business without the distraction of IP theft or legal challenge.

This article was published in the March edition of British Plastics and Rubber and can be downloaded by clicking the link

GrowthAccelerator is a service that is helping England’s brightest growing businesses achieve their ambitions with rapid, sustainable growth. And training grants are now available to larger established businesses as well as smaller high growth start ups.

GrowthAccelerator’s network of world-class growth experts work side by side with leaders of high-growth potential businesses to provide them with the know-how and ability to achieve sustainable growth. The service helps discover the real issues that could be holding businesses back, define the right growth plan and open doors to world class business experts and networks.  This includes identifying and understanding IP issues and the role of intangible assets.

To be eligible, your business needs to be registered in England with up to 250 employees and a turnover under £40m.

Your investment in GrowthAccelerator will reflect the size of your business: Micro and start-up businesses (up to 4 employees) – £600; Small businesses (5 to 49 employees) – £1,500; Medium-sized companies (50 to 249 employees) – £3,000.  In return you will be eligible for a package of support including a fully paid for IP Audit and a grant to support the costs of IP training.

If your leadership team needs some tailored support to help them manage IP more effectively and drive business growth, then GrowthAccelerator offers you access to matched funding of up to £2,000 per senior person for IP training specifically designed for you and your team.

Intangible Assets, including IP assets now typically contribute up to 80% of the value of a UK business.  Acquiring the skills to protect and monetise these assets is therefore an important aspect of director and manager training.

We are experienced IP professionals and deliver on-site structured training workshops and modules that cover topics such as:

• A simple introduction to the basic terms and meaning of Intangible Assets.
• How to capture, protect and manage IP: Patents, Trade Marks, Copyright, Trade Secrets
• How the IP registration processes work
• How to protect brands, know-how and other assets
• Valuing Intangible Assets within the business
• How to develop an IP strategy that aligns with business objectives
• How to appoint or become an IP Manager
• Patent Box and other benefits of IP
• Acquiring & Monetising IP
• Understanding the IP Landscape and Competition
• How to report IP Board Metrics and construct IP dashboards
• Benchmarking your IP performance
• Dealing with IP disputes
• Investor/Buyer Ready: IP Due Diligence & Strategy Statements

Training is provided for groups or individuals and we have delivered packages for single companies and sectoral workshops involving a number of different busineses.  Companies can choose from off-the-shelf modules or bespoke packages

A sound understanding of intangible asset value and how to protect this value is beneficial for all those in the c-suite, R&D managers, risk managers, those involved in business development and the IP Management team. Our prices vary depending on the depth of training required and have ranged from £1500 for modular training for small businesses to £80,000 for in depth bespoke packages for multinationals. Many companies retain us for on-going IP training and advice.

Click to download a pdf of our IP Training Flyer

Innovation Vouchers can be used to pay for wide ranging commercial IP Advice, including IP Audits, that will improve the management of intellectual property in a business as it takes any new idea forward.

Companies may need to value their IP to prepare for a licensing deal, develop an IP commercialisation plan, investigate the competitive IP landscape, acquire an IP portfolio, or indeed anything that will optimise their chances of succeeding in taking their idea to market.

Coller IP is helping new clients to secure the appropriate funding and take their ideas to market.

Small and medium sized companies engaged in Energy, Environmental, Waste, Clean Technology, Sustainable Buildings,  Agrifood activities and Cyber Security currently appear to be gaining a popular hearing for IP support.

There are three key criteria for winning a voucher:

• The idea that you want help with should be a challenge for your business that means you need to look for specialist help
• This should be the first time that you have worked with the knowledge supplier
• Your idea should be applicable to one of the priority sectors

Different sectors/themes are funded in different rounds of support which are described on the innovation vouchers portal

The close dates for Innovation Vouchers for 2013 are:

• 10th April 2013
• 24th July 2013
• 23rd October 2013

The next deadline is fast approaching, so call us on 0870 402 1611 and we will help you to submit your entry into the competition.

A full pdf of the IP supplement can be downloaded here, which reviews current IP activities in the UK, looks at the likely impact of the UK’s new tax regime through the “patent box” , reports a 14% rise in GB patent applications in 2012 and illustrates how the value of IP can be maximised.  Turning to IP protection, the supplement explains how IP is a strategic asset and how securing ownership of IP can be the difference between business success and failure.

“Managing Intangible Asset Value and Risk” provided an overview of how the value of IP has grown in the market place over the past 10 years. It looked at how IP is becoming a prominent asset class even though it may still be under-represented on many companies’ balance sheets. Like other assets, IP can be valued and the webinar discussed how the right intangible assets have added major value to businesses – and the importance of having a good IP strategy in place for today and tomorrow.

Intellectual property (IP) refers to a range of creations of the mind for which specific legal protection may be available. Common types of protection include patents, trademarks, registered design rights and copyright.

Medical device technology is a developing area and ripe for IP protection.  In IP terms, a novel medical device is a device that has not been publicly disclosed before the date of the patent application filing. Such devices are part of the creator’s IP and can form part of a coherent IP strategy going forward.  A good strategy includes a clear understanding of the inherent value of the IP in the invention, full legal protection in the jurisdictions in which the invention is to be marketed and an understanding of how to commercialise the IP in the future.

In our article, we addressed potential IP issues associated with the growing area of medical devices, with particular attention focused on the wider patent landscape around them.

Inventions in medical devices can include:

• materials, namely metals, polymers and ceramics with specific properties such as mechanical strength and hardness;
• the formation of surface coatings for applications such as drug-release devices;
• the design of electronic circuits for data collection and analysis related to patient management;
• power supplies for medical devices;
• the functional design of the devices themselves.

In our view, R&D staff need to be fully aware of the implications of disclosing their inventions in advance of a patent application. Simply by disclosing their contributions in external discussions or by publishing in journals or conference papers, R&D employees potentially are making their company’s technology available to the public. From that point onwards, if no patent application has already been filed, the invention may no longer be considered to be novel or inventive, and it will become difficult to obtain a commercially valuable patent to protect it.

We strongly recommend that prior to any external disclosure whatsoever, organisations take professional advice on precisely when they should patent their inventions and how they should go about it. Otherwise, there is a serious risk of giving away ideas or inventions for free.

Another area to consider is where a new device may include components from other organisations.  This is a complicated legal area, and if such a device is contemplated, we strongly recommend obtaining a professional opinion before the device is fully commercialised.

Many organisations use components already built and tested in their products as it leads to faster and more cost-effective development cycles. Such components can be considered as IP assets, and as such, their use should be optimised and protected, whether developed internally or by a third party. Rather than purchasing the component outright, the R&D team may acquire a license to use the component for a specific purpose, or negotiate a contract where a royalty is paid for each shipped product in which the component is integrated. Both commercial judgment (the cost-effectiveness and viability of the chosen model) and IP skills are required, the latter to ensure that contracts between an organisation and any third-party supplier are watertight and do not lead to problems further down the line.

Table I: Studies of patent literature highlight many active players from the medical device industry.

This table shows some of the most active players and the number of patent families.

The following questions are pertinent to the discussion of IP in the field of medical devices:

• Who are the major patent holders and what are their activities?
• Which players occupy niche technology areas?
• Is this a growing or shrinking field of technical activity?
• Are there core technologies common to the product offerings of patent holders?
• How is the technical field changing over time?
• Are my activities novel or are they used by my competitors?
• Who are my nearest competitors in terms of technology?
• Will my activities result in infringement of third-party patents?
• How valuable is my IP?

Databases of published patent information are publicly available through patent offices: the United States Patent and Trademark Office, the UK Intellectual Property Office, the European Patent Office and the World Intellectual Property Organisation, for example. Commercially available software that simplifies the searching process for these databases is available.

Patent searches on medical devices identify nearly 13,000 patent families that have been filed over the past 20 years. Analysis of the patent filing dates shows that medical devices is one area of growing activity (Figure 1). Studies of patent literature highlight the many active players, as shown in Table I.

Figure 1: Filing rate for medical device patents. The figures for 2011/2012 are not yet fully published (output from Thomson Innovation).

The patent landscape provides an indication of where competitors might be active and there are specific features of the landscape that can affect the success of product offerings for medical devices. In a patent landscape as crowded as the medical device field (Figure 2), there is always a possibility of a new entrant infringing patents belonging to a third party. Anyone coming into this complex field, as well as existing players, should ensure that they have professional advisors who can help to steer them through this maze and review their IP on a regular basis. Some of the patents on the landscape will be of significant value, and understanding the relative position of the new development to existing patents is important for business decisions that may relate to investment in an enterprise, development of a product or the complete sale of a business.

Figure 2: Patent landscape for 13,000 families of medical devices (output from Thomson Innovation).

Anyone who has business interests in the field of medical devices will want to know who their nearest competitors are and what patents they hold. The landscape for the set of 13,000 patent families used for Figure 2 is generated through an analysis of the most frequent words and phrases (referred to as themes) in the set of documents and allows us to see the active parties in a specific area of development.

In general, topics that lie close together on the landscape can be considered to be related technically, and the snow-covered peaks are around subject areas of high patenting activity.

Figure 2 has been annotated to show the location of specific technical areas within the landscape. We have also shown in Figure 2 the position of some patent family holders in the landscape. In some cases, patents for a particular player are dispersed across the landscape activity in various technical areas. Where patents are clustered for a player in a specific region of the landscape, there is an indication that that player has focused on a specific technology or application for the technology, for example an emphasis on spinal implants.

In summary, the medical device area has seen growing patent activity over the last 20 years. Assessment of the wider patent landscape reveals the intellectual property held by both existing players and new entrants in the medical device market, essential information in today’s world of business. A full understanding of where a new invention lies on the patent landscape is vital, as is ensuring that all contracts with third-party suppliers are watertight. An IP audit, review or health check should be undertaken on a regular basis to ensure the organisation is aligning its business strategy with its IP—the so-called crown jewels of a company—to achieve maximum competitiveness going forward.

The full article on keeping your IP fit and healthy is available here and is published in European Medical Device Technology, January/February 2013, Volume 4, No. 1

Strategic Risk talks to Jackie Maguire, CEO of Coller IP and Michael D Moberley, President and Founder of Knowledge Protection Strategies – KPSTRAT

With over 65% of a company’s value now typically deriving directly from intangible assets, including intellectual property, it is not surprising that organisations are increasingly dependent on the ability of their management teams to effectively harness and convert these assets into sources of revenue.

Most people would agree that the late 1980’s to early 1990’s were the launchpad into what we now call the ‘knowledge-based economy’ and this trend shows no sign of abating. As the value of many physical assets declined, conversely the value of intangible assets grew – and with this trend, and understanding that it was not only possible, but vitally important, to put a real monetary value on those assets, and put as much effort into securing them as companies had hitherto done with their physical assets.

When intangible assets are not effectively and consistently safeguarded and their risks managed, they become less valuable, and can lead to undermining of competitive advantage.

It is essential that organisations make use of the combined expertise of security, risk management and IP practitioners to ensure that a company’s intangible assets are consistently safeguarded and positioned to maximise their benefits.

Point 1 – The issue

Unfortunately, many businesses still fail to recognize this fact. It is not just security and risk management practitioners who have had no training about intangible assets but often c-suites, boards, and stakeholders have little insight into the specific risks posed to company value.

In some companies, however, Chief Security Officers (CSO)s and CROs are now assuming, consciously or not, new or greater/more integrated roles as regards safeguarding key intangible assets are concerned because of the latter’s crucial importance to the company’s value, competitiveness, sources of revenue, investment attractiveness, sustainability and market position.

Whoever takes responsibility for an organisation’s IP, whether the accountability is explicit or not, it is essential that the development, acquisition and utilisation of intangible assets becomes aligned with core business, security, and risk management strategies rather than being considered solely as intellectual property based legal processes.

As CSOs and CROs acquire a stronger operational familiarity with intangible assets they will be able to contribute in a number of vital ways to the success of the business.

Point 2 – Why this change of role is of value to a company

This shift runs parallel to the inclusion of ‘return on security investment’ (ROSI) concepts in the security-risk management equation. A good understanding of an organisation’s assets is essential for managing, among other things:-

• Business continuity, contingency, organisational resilience planning
• Intangible asset disputes, risks and challenges
• Mergers, acquisitions, new ventures
• Venture capital investments
• Early Stage Companies
• Corporate – eg university research partnerships

Point 3 – The need to recognize exactly what the risks are

Given the global volume of intangible asset intensive/driven companies, when security challenges and risks materialise, the contributory value of the (intangible) assets can quickly go to zero. That’s especially true if safeguards, asset monitoring, and risk management practices are either not in place or are ineffective relative to mitigating the speed and cascading effects of which most risks-threats are now capable.

This is due, in no small part, to the prevalence of technologically sophisticated, globally predatorial, and instantaneous risks and threats, emanating from a variety of sources.

Threats to intangible assets can materialise instantaneously and simultaneously, and course through an enterprise to produce long lasting and even permanent adverse economic affects to a company’s competitive advantage, R&D, reputation and relationship capital.

CSOs and CROs should no longer characterize/portray risks and threats in the context of probabilities, but rather as inevitabilities.

Point 4 – Nature of what is at risk

The characterization of the problem is often being solely related to intellectual property, i.e., patents, trademarks, copyrights, and trade secrets. When 65+% of most companies’ value and sources of revenue evolve directly from intangible assets, of which IP is just one, it’s prudent to assume that adversaries are also seeking the knowhow, ie., intellectual, structural, and relationship capital (intangible assets) that underlie and/or are by-products of any and all IP.

Initially, managing risk associated with intellectual assets may seem a daunting task if this has not previously been fully addressed. A great deal of the value of an organisation often lies not just in the IP (that is, patents, trademarks, copyright, designs, trade secrets) but in other intellectual assets (skills, policies, “know-how”, processes), and intellectual capital (reputation, branding, relationships, contracts). If key employees leave, perhaps because they are unhappy about a possible change in the company’s structure, their knowledge may leave with them. Written materials, customer contact lists and bespoke materials can all form part of the intangible assets. Ideas and inventions may be fundamental to the company but the wider intellectual capital is often the key to driving growth, profitability and access to markets. If these ‘crown jewels’ of a company are allowed to dissipate, in today’s knowledge-based economy, the risk is great indeed.

Point 5 – Who is the threat?

Many countries are now in the early stages of a second generation of citizens who possess the capability to create large scale manufacturing facilities to produce the various products and/or services that with some frequency emanate from infringed – stolen – misappropriated or simply copied intangible assets and IP.

Point 6 – Actions to be taken

It should be (professionally) obligatory for CSO’s and CRO’s to acquire operational familiarity with their company’s intangible assets, which, among other things, include recognizing…

• what they are, what they aren’t, how they develop/evolve to create contributory value, sources of revenue, and competitive advantages, etc.
• nuanced, sophisticated, and asymmetric risks-threats to intangible assets.
• various ways those risks-threats can materialize to adversely affect intangibles, and
• effective tools to sustain (protect, preserve) and determine control, use, ownership, and value of the ever growing array of intangible assets on behalf of a company, business unit, or client.

So how should risk managers enhance their understanding of their role in minimising the risks to intangible assets? Clearly, if an IP professional is part of the company’s senior management team, the risk professional should work closely with that individual or team, or perhaps take advice from a specialist external IP specialist. In either case, the following steps need to be taken:-

1. identifying the full range of intangible assets owned by the organization;
2. identifying and mitigating definitional and operational gaps (disconnects) between,
i. conventional intellectual property protections,
ii. computer/IT security,
iii. competitive intelligence and data mining,
iv. economic/industrial espionage,
v. recruitment and covenants, and
vi. commercial functions;

3. demonstrating security and risk management’s role in aligning a company’s intangible assets with (its) core business and strategic planning initiatives, i.e.,
i. utilizing intangibles commensurate with their value – functionality cycles, and
ii. articulating and positioning intangibles to render companies more attractive to trade and investment opportunities.

Conclusion

This knowledge (intangible asset) based, largely global economy in which we’re in the midst, all be it in the early stages, shows no signs of reversing.

This makes it all the more important that security and risk management practitioners engage and lend their expertise to ensuring a company’s intangible assets are consistently and effectively safeguarded and positioned to realize the economic and competitive advantage benefits which they are generally capable of delivering.

In most situations, the consequences of intangible asset losses, are that value/competitive advantage is undermined, and that reputational risks are increasingly immediate and frequently irreversible. Once lost, compromised, or undermined, the value, revenue, competitive advantages and strategic positioning of those assets and a company’s reputation are extraordinarily costly to regain and seldom, if ever fully recoverable in a timely manner.

Click here for full Article on Don’t risk your Precious Assets

However, many companies in the UK are struggling to secure capital to invest in the growth of the business and many pension funds are struggling to make good returns on their investments.

At Coller IP we have been working with several Independent Financial Advisers to help directors and trustees in solving both these problems.

Many companies have significant intangible assets not currently recorded on their balance sheets. These can include trade marks, domain names, websites, order books, customer lists, copyrighted training materials, software, and patents. In many cases these are tradable commodities with an associated cash value.

By adopting recognised valuation techniques and comparing the company’s assets to published intangible asset transactions we can provide evidence based valuations for the assets. This allows (in certain circumstances) for the trustees of a pension fund to purchase and lease back an otherwise unrecognised asset from the company generating value in both the company and the pension fund.

“Coller undertake a large amount of the IP valuation work in connection with our activities in the SSAS market.  In all our dealings with Coller, they have been outstanding.”

Anthony Carty,  Director, Clifton Asset Management plc.

Call +44 870 402 1611 for a free initial discussions on valuing Intangible Assets within pension fund transactions

Physical security of buildings and equipment as well as threats to computer networks are high on the agenda of most security professionals. An aspect of security protection that is perhaps not considered in as much depth as it should be is that of protecting the intellectual assets of a business. But with over 65 per cent of the value of today’s companies typically drawn directly from intangible assets (including intellectual property) – most organisations should be paying more attention to it than they do.

Probably the majority of organisations today are aware that intellectual property is important. But perhaps not just how important. And many are still somewhat unsure about how exactly to identify these intellectual assets – the so-called ‘crown jewels of a company – and less sure still about how to measure their value. And without understanding their value, it is difficult to evaluate the risk of losing these assets, or to take steps to ensure they are fully protected.

Chief Security Officers and Chief Risk Officers are typically responsible for identifying viable strategies (solutions) for protecting what matters most to their company and mitigating relevant risks.

With the shift to the knowledge based economy in the early to mid-1990s, intangible (non-physical) assets began to overtake tangible (physical) assets as dominant sources of most company’s value and sources of revenue.

While some of a company’s value and revenue of course still flows from physical assets such as equipment, inventory, manufacturing facilities, property and so on, the focus of security and risk management professionals should be increasingly on the value and revenue derived from a range of intangible assets that often evolve internally, but that can also be acquired externally, such as intellectual, relationship, and structural capital, reputation, brand, and intellectual property.

The good and bad news for CSOs and CROs, depending on their point of view, is that they are assuming greater, and more distinctive roles in mitigating risk and safeguarding the intangible assets that now underpin the value, competitive advantage, and sources of revenue they generate.

This additional responsibility includes reducing the probability the growing array of intangible assets will be misappropriated, undermined or eroded by new threats resulting from an increasingly aggressive, competitive, global economic environment. When security challenges and risks materialise, the contributory value of the intangible assets can quickly be wiped out. That is especially true if safeguards, asset monitoring, and risk management practices are either non-existent or ineffective relative to mitigating the speed and devastating effects of which most risks-threats are now capable.

Today, almost any asset vulnerability, risk, or threat unacknowledged or left unchecked, will materialise. CSOs and CROs need to think in terms of risks to intangible assets today not just as probabilities, but rather as inevitabilities!

This makes it all-the-more (professionally) obligatory for CSOs and CROs to acquire operational familiarity with their company’s intangible assets, which, among other things, include recognising …

- What they are, what they aren’t, how they develop/evolve to create contributory value, sources of revenue, and competitive advantages, etc.

- The increasingly sophisticated and subtle risks-threats to intangible assets.

- various ways those risks-threats can materialize to adversely affect intangibles, and

- Effective tools to protect the intangible assets.

It is essential that security and risk management practitioners fully recognise the business reality that 65-plus per cent of most company’s value, sources of revenue, and ‘building blocks’ for growth and sustainability reside exclusively in intangible assets.

Ensuring that they are not at risk needs to be an on-going task, not least because their management and protection are now fiduciary responsibilities – ie, it is no longer optional. Not only is this essential but it is also urgent, because of the short life, value, and/or functionality cycles of intangible assets, the lower market entry barriers by aggressive global competitors and vast and easy profits generated from (intangible) asset theft, infringement, piracy, counterfeiting and business/competitor intelligence operations and economic espionage.

The development and/or acquisition and use of intangible assets must become closely aligned with core business, security, and risk management strategies and not just regarded as intellectual property based (rooted) legal processes. To achieve this, it is important to put in place relevant, effective, and flexible practices, processes, and strategies. At the same time, a ‘risk intelligent company culture’ is required that recognises and enables intangible assets and can contribute to sustaining their control, use, ownership, and monitor the assets’ value and materiality.

Unfortunately for the future of many businesses, it is not just CSOs and CROs who are unaware of the vital importance of intangible assets but many senior managers as well do not understand their importance or the value of the assets they have. Many have never had any training on intangible assets which means they have little, if any, operational interest or familiarity with this aspect of their business.

Assuming, however, that an organisation is taking an enlighten approach to intangible assets, there will, in some larger companies, be an intellectual property officer who will be responsible for these assets. The relatively new function of CIPO (Chief Intellectual Property Officer) currently comes under a number of different guises and titles, including Chief Innovation Officer, Head of Research, Legal Director and even Head of Market Planning. CIPOs come from many different backgrounds, but typically they have had legal training. Many smaller companies combine the role with that of FD, company secretary, or IT director and with no single individual who is responsible for this role and they may turn, (as indeed do many of the larger organisations when they need additional help), to consultancies who specialise in intellectual property matters.

Howsoever the company is structured, it is important that those responsible for risk or security in an organisation work with IP professionals and senior management to understand the value of the intellectual assets and the risk that the loss of them would pose, and then to work together to protect those assets in the best possible way. This requires technical, legal and commercial understanding.

Understanding the value of the IP and other intellectual assets in a company is the first step to protecting them. So how should companies go about it? Identification of all the valuable intangible assets in a company involves undertaking an audit to identify them and assessing which of these may be of significant value. This includes assessing strengths and weaknesses of the IP relative to that of existing or potential competitors, while at the same time identifying possible opportunities for exploiting IP further.

The process should also include checking any weaknesses in patents and other IP from both a legal and commercial position so as to identify risks and avoid potential pitfalls. One of the areas that it is important to look at is how well differentiated the technology and patent applications are from the ‘prior art’ – that is, previously published third-party patent documents in the same technology space. This involves searching international patent databases to analyse prior publications and to establish whether third-party patents are still live.

The question is often asked as to whether, given the intangible nature of IP, can it be valued? The answer is ‘definitely’ .

The various approaches that are used are not dramatically different to those used to value many tangible assets and where an in-house function is not equipped to perform this role, external expertise can be brought in. It is the assessment of risk that requires specialist skillsets.

Security and risk management practitioners must engage and lend their expertise to ensuring that a company’s intangible assets are consistently and effectively safeguarded and positioned to realize the economic and competitive advantage benefits which they are capable of delivering. Threats to intangible assets can materialize instantaneously, and permeate throughout an enterprise to produce permanent adverse economic affects to a company’s competitive advantages, R&D, reputation and relationship capital. The role of the CSO and CRO in protecting these has never been more important.

For full Professional Security article click here

The session, chaired by Jackie Maguire, co-chair of INTIPSA and CEO of Coller IP, providing strategic IP advice sought insights  on how to develop a successful IP strategy from:

Marshell Phelps, Article One Partners, ex CIPO, IBM and Microsoft
Marnie Williams, Unitised Buildings Group – high rise building construction developers
Jon Calvert, Manging Partner Clear View IP and co-chair INTIPSA
Isabel Morgado, Board Member and Head of IP, BIAL

Jackie led the panel with 5 key questions – and answers are provided in the audio clips.

The webinar can be heard in audio broadcast by clicking the webinar links below.  Please allow for uploading delay of 10-30 seconds for longer clips.

1.  How do you develop an IP Strategy.  Three clips illustrating the contrast between IP management in construction and pharmaceuticals industries and large and small organisations. 

1a. How do you develop an IP Strategy – Context and Construction? 5 minutes recording

1b. How do you develop an IP Strategy – IT and Business? 5 minutes recording

1c. How do you develop an IP Strategy – Pharma & IT? 5 minuties recording

…….More audio clips…..

2. Should your strategy be litigation ready?  5 minutes recording.

3. Which intangible assets are important? 7 minutes recording

4. Are Trade Marks important assets?  5 minutes recording

5. Is HR strategy aligned with business strategy? 3 minutes recording

6. Can a small company follow the same IP strategy as a large multinational? 5 minutes recording

7. When to bring in external assistance  10 minutes recording

8. Which IP metrics does a business board need to put in place?   8 minutes recording

IPBC China 2012 has just been held and we look forward to more feedback from our Asian counterparts.  In addition, Coller IP will be participating in IPBC next year in Boston.  The Congress is scheduled for 9th-11th June 2013.  More details are at IPBC 2013

With a mixed response from business, the first image right has now been filed for registration in Guernsey.  The States of Guernsey brought new Image Rights legislation into force on this day, 3rd December 2012 . The Image Rights (Bailiwick of Guernsey) Ordinance, 2012 means that for the first time anywhere in the world, individuals and their agents can register and protect their personality.

The Olympics earlier this year stimulated much discussion about the value that sports personalities build in their intangible assets during such games and how some were preparing to protect that value.

The Image Rights (IR) Ordinance establishes a new form of intellectual property,  that focuses on two concepts – the “registered personality” (the core right) and “images” that are associated with or registered by that registered personality.

Personality (described in the IR Ordinance as the “personnage”) covers:

• natural or legal persons;

• a joint personality;

• a group; or

• a fictional character of a human or non human.

All sorts of personalities, such as David Beckham, One Direction, Torvill and Dean, James Bond, Mickey Mouse, Batman and the Joker qualify.  The creator of the fictional character is, generally, the prospective proprietor of the fictional character’s personality and its associated image rights.  Supposedly, a legal person’s personality can be registered, so it appears that J K Rowling for instance could be a registered personality, and then she would get protection for Harry Potter characters - or these characters could be registered personalities in their own right.

The IR Ordinance also caters for both dead people and “extinct” legal persons. If the natural or legal person was “in existence” within the period of 100 years prior to the date of filing of the application for registration of the personality, it will also qualify for registration of its personality.

“Image rights” are defined as “exclusive rights in the images associated with or registered against the registered personality”, which if registered may strengthen the case for infringement.

An Image refers to:

• the name of a personnage or any other name by which a personnage is known (e.g. David Beckham or “Becks”);
•  voice;
•  signature;
•  likeness;
•  appearance;
•  silhouette;
•  feature;
•  face;
•  expressions (verbal or facial);
•  gestures;
•  mannerisms;
•  any other distinctive characteristic or
• personal attribute of a personnage;
• and/ or photographs, illustrations, pictures, moving images, electronic or other representations of a personnage and of no other person, except to the extent that the other person is not identified or singled out in or in connection with the use of such an image.

The registration of a personality gives the registered proprietor exclusive rights in the images associated with or registered by the registered personality. The registration of a personality lasts for a period of ten years from the date of registration and may be renewed for further periods of ten years. Where a specific image has been registered against the registered personality, the registration of that image lasts for three years and may be renewed for further periods of three years.

Applications to register image rights may be refused if they are considered to be similarly confusing with other images or where there is an earlier right in relation to the personality or image applied for, eg trade mark rights, copyright, design rights etc.

A “Protected Image” can be infringed. To be a Protected Image at the time of infringement, the image has to be “distinctive”, have “actual or potential value” and satisfy the registrability requirements of an image (whether or not it is in fact registered).  An image is “distinctive” if it is recognised as being associated with the registered personality by a wide or relevant sector of the public in any part of the world, and various factors are provided for determining whether an image is distinctive.

Application for registration may be made by the personnage if they appear in person at the Registry, or by a Guernsey Image Rights agent, for the personality alone or with a specific image or images.

To obtain the discount code, please email Catherine Sabatini here.

2011 has been the inflexion point of patents monetization at large organisations (e.g. Nortel portfolio, Motorola Mobility, Samsung vs. Apple). Intangibles have entered into boardroom discussions, redefining strategies, tactics and business models. This summit offers a chance to learn from C-suites where IP is now making a difference.

Lawrence’s participation will consider:

How Patent Portfolios are Becoming Killer Assets for Investors

• Intellectual assets: totally illiquid or progressively liquefying? How to help the trend?
• Have recent deals & IPOs raised enough the financial interests?
• Patent wars: how strategic litigation affects IP value.
• Is high-tech the exception?
• European IP marketplace: a promising tool?

IPR Financial  Markets: Trilateral Views

• Comparing and measuring progress in Asia, Europe and U.S.
• Are the U.S. most seasoned at practicing IP finance as a whole?
• China multiple funds, Korea 5-year plan, initiatives in Taiwan and Japan…: are Asian countries better prepared in the race for total innovation?
• Is Europe most advanced in co-operative works?
• Public policies and private interests: what are the underlying geopolitics?

In addition, amongst business-oriented panels, there will be one on open innovation which will feature a discussion between Beiersdorf, Telefónica and Flooring Technologies (Swiss Krono Group).  Technology transfer and collaboration between public R&D and private companies will be addressed and France Brevets, the Fraunhöfer Institute and Qinetiq Ltd will be expressing their views. IP Harmonization will be debated between Margot Fröhlinger (EPO), Mark Guetlich (USPTO), Ideas Matter and the Bosch Group.  Prof. Dr. Joseph Strauss at the Max Planck Institute, IBM and ACT will share thoughts on reforming the rules for Grace Periods.  And finally, AkzoNobel, BMC Software and PSA Peugeot Citroën will debate “Trade secrets: there’s important legislation incubating. Should Europe converge with the U.S.?”

This should be an interesting summit!

Coller IP has been following innovations in 3D Printing closely over the past 3 years, so we were very excited to take part in the BBC Click Team’s report.  The technology is developing rapidy - so much so that higher quality affordable 3D printers are now becoming available for home use.  The BBC were keen to investigate developers and home user’s rights when the technology is made more widely available…….

Spencer Kelly and Dan Simmons reports and Dan speaks to Coller IP’s CEO, Jackie Maguire.

There has been much debate: around the ability of individuals to produce an increasingly greater number of objects for home use; around the emergence of 3D printing shops in the high street; and on the potential impact for manufacturing per se if 3D printing is used for a wide range of everyday products.

Researchers are making great strides in material development for 3D printing, capturing the imagination of academics, policy makers and entrapreneurs.  No longer is 3D printing – aka Additive Manufacturing – just constrained to plastic products.   The futuristic vision of being able to “print” all kinds of functioning 3 dimensional objects is coming closer to a reality.  Some of the many products and techniques are described for all to read by Christopher Barnatt.

The implications for everyday life have spurred something of a craze and some hype as well as reviews calling for policy changes at Government level.  Printing Aston Martin DB5′s takes the potential imagination to a whole new level!

Coller IP wrote in TCT magazine over a year ago about the intellectual property issues surrounding 3D printing where a product is built up layer by layer.

Different types of intellectual property relate to different aspects of the printing process, from copyright in artistic works and the software used to control the printer, to design rights in the components and products produced, patents covering the specialised resins and polymers used in printing, the design, construction and mode of operation of the printer as well as trade marks for printer branding and those protecting the 3D features of the products produced.  So for anyone developing a business built around 3D printing, there are specific IP issues that can affect the success of the operation….and liabilities don’t stop there….

Full reports and further reviews can be found on the BBC News Click site

Joining the conversation and bringing clarity to the issue were two authorities on operations and communications. Dr Jackie Maguire is founder and Chief Executive Officer of Coller IP, which provides a full range of Intellectual Property services. Bruce Berman is a principal at Brody Berman Associates, a consulting firm advising IP holders about conveying the value of their rights and reputation. Jonathan Salem Baskin, global brand strategist, speaker, and author, moderated the webinar.

An audio clip of the webinar can be heard here (please allow a few seconds for install):

Critical corporate assets go by many names: intangibles, intellectual capital, intellectual properties, knowledge capital, vital assets. They are embedded in brand, memorialized in patents, and internalized by stakeholders as reputation.  Designed to foster a greater sense of community and to further the IAFS’ missions of education, advocacy and the promulgation of best practice standards, a lively monthly conference call series is hosted on a rotating basis by the Society’s committees and offers both managerial pearls and a taste of the Society.

For all whose interest in the management of these valuable assets demands ongoing stimulation, the Society continues its free out-reach program moderated each month by global brand strategist, speaker, and author, Jonathan Salem Baskin.

The full recording of the discussion is available.  Click IP Worth Fighting For to download.

In Scotland, the process appears to be very straightforward and companies can contact the Intellectual Asset  Centre, part of Scottish Enterprise to seek approval; in Wales companies can  gain approval via the Welsh Government and in England companies must  be approved via participation in the Growth Accelerator Programme.  The funding is a set £2,500 plus VAT. (£3,000 including VAT).  There is wider funding available too from the Growth Accelerator and Technology Strategy Board and some businesses can obtain Innovation Vouchers that provide for advice on IP matters.  Leadership and Management training on IP matters is funded by the Growth Accelerator and as Coller IP is a registered training provider with GrowthAccelerator, a grant to cover to 50% of our IP training programme costs can be obtained.

Coller IP is also registered on the Manufacturing Advisory Service (MAS) Directory.  MAS provides a national service delivered locally by experienced advisors, to help your business grow.  If you’re a small or medium sized manufacturer in England, many services are free and supplemented by appropriate grant funding to carry out patent search activities and advise on IP strategies and other matters.

IP audits follow the guidance as issued - and during an audit we can also discuss matters relating to IP Strategy, IP Valuations and IP Protection matters and can initiate discussions relating to infringement, other due diligence issues and any further training required.  Coller IP provides a full IP practice and is able to advise and train on  all IP business related matters, including the requirements of the Patent Box.

Any business could benefit from an IP audit; it is particularly relevant to SME’s in helping to ensure that potential intellectual property assets are identified and appropriately managed.  Our audits provide that business and IP Healthcheck.

The IPO funded audit includes the provision of advice and support towards gaining and maximising the value of IP.  This funding is particularly awarded where IP has been identified, but further guidance is required in respect of managing and developing an IP strategy and where it is demonstrated that IP protection is significant to the development and commercialisation of the product/service to allow the business to grow.

The IPO envisage that their funded support would help the business develop effective strategies to take the product/service to market and offer a means of increasing market place success. This support is particularly relevant where there is an existing IP portfolio or where significant IP assets are involved.

For the IPO funded audit, Coller IP would prepare for a visit or meeting, identify IP of value, advise on key issues and provide and a report setting out clear recommendations.

The report will include action points for how to best leverage value out of and how to manage IP; it will be tailored to the specific needs of the business/project.

The audit will cover the following -

• Patents – identify pending applications, granted patents, potential patentable technology, potential patent infringements;

• Trade Marks – identify registered and unregistered trade marks, searching procedures prior to introduction of trade mark, possible infringement of third party rights;

• Designs – identify registered and unregistered rights, possible protection through Design Right and Community Design Right, possible infringement of third party rights;

• Copyright – identify copyright (databases, websites, marketing/promotional material, photography, film), ownership/assignment of copyright from creators, procedure for establishing date of creation, copyright indicators on protectable works, database rights;

• IP Management – to include confidentiality (or non-disclosure) agreements, trade secrets, technical know-how, employee agreements and dissemination of IP policy throughout the company, licensing, evaluating existing IP, IP policy including registration, renewal systems, monitoring/watching services and enforcement and international filing strategies.

- and other intangible assets that add value to the business.

For more information on how to apply for an IPO funded audit call Coller IP and speak to Maurice Alphandary or Jackie Maguire on 0870 402 1611

Intangible assets such as brands now contribute by far the greatest shareholder value in most sectors and many organisations consider their brand to be their most important asset. Studies have shown that companies with a strong brand outperform others in a number of different respects.

When it comes to intangible assets, there are three key issues to consider in an M&A scenario. Firstly, understanding what intangible assets exist and the value of them.  Secondly, whether they are adequately protected. And finally, how they could be enhanced and exploited.

Valuing intellectual property (IP) accurately and putting a monetary value on it can be a contentious issue but it can be done. Protection of IP is vital for a company looking to merge, or acquire another.  If the target company’s IP is not protected (or not protected thoroughly enough, for example in each significant country where it may be at risk) there is a real possibility that its ideas and inventions could be stolen. And if those disappear, the value of the company is of course greatly reduced.  On the other hand, a company may have IP that is not fully exploited or commercialised, and its potential to do that may add greatly to its value.

The IP issue needs to be considered at an early stage, as a great deal of the value often resides not just in the IP (e.g. patents, trademarks, copyright, designs, trade secrets) but in other intellectual assets (skills, policies, ‘know-how’, processes), and intellectual capital (reputation, branding, relationships, contracts).  If key employees leave, perhaps because they are unhappy about a possible change in the company’s structure, their knowledge may leave with them. Ideas and inventions may be fundamental to the company but the wider intellectual capital often drives growth, profitability and access to markets. Written materials, customer contact lists and bespoke materials can all form part of the intangible assets.

Anyone involved in selling or acquiring a company should establish what intangible assets the target company owns, and whether they are live and valid. Valuation challenges sometimes arise when patents have been registered by early-stage companies for products or inventions which do not yet produce income or royalties as it is more difficult to assess likely value.

Only comparatively recently have organisations tried seriously to put a value on intangible assets. For most of the 20th century, company value was regarded as residing in the land, buildings and tangible products including stock. Although technology, the brand name and patents, as well as the workforce were all seen as being vitally important, there was no reliable method of putting a value on them.  However, it can be done.

UK-based IP management provider Coller IP is working with a number of companies in the biofuels industry to help with their IP issues including HWEnergy.  HWEnergy is Scotland’s leading and longest established biomass heating specialist.  It was founded to help expand wood (or ‘biomass’) heating in Scotland as a mainstream alternative heating .  The company provides solutions for the implementation and ongoing operation and management of biomass heating systems for farms and estates, the public and community sector and for businesses.  HW Energy was introduced to Coller IP through the latter’s role as a consultant to Project VIA (Valuing Intellectual Assets) which was run by the Intellectual Asset Centre (IA Centre) in Glasgow and worked with companies operating in Scotland’s renewable energy sector to identify and realise value from their intangible assets.

’Coller IP helped us with IP issues across the board, including IP valuation, obtaining licensing for a prototype of a new product, obtaining trademarks, and, above all, commercialising and marketing our processes,’ says Bruno Berardelli, MD for HW Energy.

IP is now becoming a prominent asset class but is still under-represented on balance sheets.  Just like other assets, IP can of course be valued, and bought, sold or leased.  Over the years, there have been several attempts to incorporate goodwill into the balance sheet.

Since the end of December 2005 all larger quoted companies have had to adopt the International Financial Reporting Standards (IFRS).  The legislation specifies that intangible assets obtained through a business acquisition should be valued independently of the auditors and that this value should be identified on the balance sheet of the acquirer.  The laudable aim was to have accounting standards that were consistent internationally since precise valuation of all aspects of a company’s business is essential for mergers and acquisitions.

In principle, this appears excellent.  However, even if the assets have been included on a balance sheet, IP is often not valued accurately, and the information provided may not be detailed enough to be very useful.  One of the issues is that identifying the intangible assets within the business may not be straightforward. If a company co-owns IP rights with another organisation, for example, there can be tricky issues to resolve even with expert help.  Some products are also likely to involve a ‘bundle’ of different assets, where the finished product may be more valuable than individual assets.  Valuation of intellectual property needs to rely upon sound data, information and expertise which are sometimes not easy to obtain.

IP valuation specialists use a number of different ways to assess brand and other intangible values.  Examples include the cost approach, the market approach, and the income approach.  Coller IP, for example, uses an appropriate combination of these methods to value IP.  The company initiating a merger or sale needs to know what its IP is worth in order to obtaining the maximum value for the company.  If the company has been approached regarding a merger or is planning to buy another company, it can be very costly to not know exactly which intangible assets are included in such a situation, and their value.

For anyone looking to be acquired, getting the IP in order is a must. Knowing the value of the IP — or which parts of the IP are more valuable than others — is essential in making decisions about what parts of the business to develop. It is also possible to sell or license parts of your IP portfolio to gain additional revenue.

Accurate valuation of the existing IP, along with ensuring protection is watertight, should always be the first steps. Identification of all the valuable intangible assets in a company can be done internally or by calling in outside specialists. Such specialists will undertake an audit, and then, often using specifically designed software tools, will undertake a landscaping exercise in order to understand the intangible assets that are of value.  This includes assessing the company’s unique position relative to existing or potential competitors, while at the same time identifying possible opportunities for exploiting any IP further.

Once this has been done, the specialist can then put a value on the assets assessed.  The best of these specialists will undertake a range of activities, including checking that patents are enforceable and that an organisation can maintain and defend them.  They will also advise on commercialisation including how to avoid potential pitfalls.  One of the areas that it is important to look at is how well differentiated the technology and patent applications are from the ‘prior art’ — that is, previously published third-party patent documents in the same technology space.  This involves searching international patent databases, to analyse prior publications and to establish whether third-party patents are still live.  This enables an understanding of the differentiation of the patents in question and to understand and articulate the commercial risks associated with third party IP.

Coller IP uses its IP clustering model to identify patents held by other companies that compete with the major services being developed by a business. It uses this analysis to identify gaps in the client’s IP portfolio that need to be filled by development, partnering or acquisition, to strengthen their position.  Once an organisation understands its intangible assets and their value, it next needs to ensure that protection is as watertight as possible.  Having the right patents and trademarks in place is, of course, important, but other areas also need to be considered. For example, does any company you are thinking of merging with, or acquiring, have employment contracts that prevent their employees taking ideas to a competitor?

Coller IP has developed a Commercialisation and Management Process that allows clients to understand the value of their intangible assets and to assess and track the commercial potential of their products and services at different stages of development. In addition, the process prompts decisions on how and whether to protect the underlying assets.

There are many examples to show how IP can realise significant value in an M&A situation. By ensuring that all parties are clear about the value of the intangible assets in question, that these are fully protected and whether there are opportunities to further commercialise them, the organisations involved will be in a good position to judge on what basis a merger or acquisition should take place.

To view a full copy of Bioenergy Insight click here

Jim Asher, Head of Valuation, Coller IP writes for LES News Exchange

Many of today’s most promising companies are built on intangible assets and, while businesses often have a good idea of how their tangible assets can leverage debt and equity instruments and help with the task of raising finance, they may not realise how important intangible assets (IA) may be when it comes to a merger or acquisition.  Increasingly, investors recognise the vital role that intellectual property (IP) plays in the future success of a company.

Some investors do not highlight IP early enough in their due diligence process, and many business entrepreneurs do not make the most of the opportunity to showcase their IP either.  IP is usually not accounted for on the balance sheet. If companies do not pinpoint effectively where their IP value lies, they will not fully demonstrate the commercial value in their business.  Many entrepreneurs therefore miss an opportunity by not convincingly presenting IP as an asset to investors making investment decisions.   Being clear about the value of the intangible assets can pay dividends – literally.

Not checking what intellectual assets are included in an acquisition can be costly, and neglecting to protect the IP properly could also pose a risk.  We have found that there are many companies who do not know how to properly evaluate their IP, so when it comes to a merger or acquisition, they don’t have their ‘ducks in a row’ to convince investors of the value of the IP. But valuing IP is more than just about counting patents or brands. It is important to understand the quality of what’s there.

Putting such a value on intellectual assets is not straightforward.  Valuing a patent portfolio for example in an acquisition scenario can be challenging – will its value readily transfer from one company to another?   Does the portfolio actually cover the technologies and products involved?   Factors that can limit the value of intellectual assets in a company include ownership issues such as poor chain of title; lack of technical relevance including claim coverage of patents; mismatches between patent country cover and market geography; brand impairment; and careless licensing dissipating rights.

The way in which IP is valued needs to take account of the purpose of the valuation and the commercial context.  For an acquirer, the value of IP may be quite different to that for the current holder. A valuation to support a commercial negotiation between companies may take a different approach to a valuation required for specific tax purposes within a company.

For any business looking to be acquired, getting IP in order is a must.  Identification and evaluation of all existing IP, along with ensuring that its protection is watertight, should always be the first steps.  Knowing the value of your IP—or which parts of your IP are more valuable than others—is essential in making decisions about what parts of the business to develop.  The process may reveal opportunities to license parts of your IP portfolio to gain additional revenue. Anyone involved in selling or acquiring a company should establish what intangible assets the target company owns, and whether associated IP rights are live and valid.

Identification of all the valuable intangible assets in a company involves undertaking an audit to identify them and assessing which of these may be of significant value.  This includes assessing strengths and weaknesses of the IP relative to that of existing or potential competitors, while at the same time identifying possible opportunities for exploiting IP further.

The process should also include checking any weaknesses in patents and other IP from a legal position so as to identify risks and avoid potential pitfalls. One of the areas that it is important to look at is how well differentiated the technology and patent applications are from the ‘prior art’ – that is, previously published third-party patent documents in the same technology space. This involves searching international patent databases, to analyse prior publications and to establish whether third-party patents are still live.

Given the intangible nature of IP, can it be valued?  The answer is an emphatic ‘Yes’, and the financial approaches that are used are not dramatically different to those used to value many tangible assets.  It is the assessment of risk that requires specialist skillsets.  The three basic approaches most commonly used to value IP, either singly or sometimes in combination, are:

• The Cost based approach considers the cost of reproducing the capability of an asset. This approach typically looks at the historic investment in creating the asset, for example R&D, software development costs, patent filing and prosecution costs, brand development investment, and applying discount factors to account for obsolescence. However, it comes with a strong caveat that historic cost is seldom a reliable indicator of future value.

• The Market-based approach seeks to establish a value by identifying comparable market transactions to provide benchmarks.  This type of approach is common in valuation of other assets, such as real estate, where there are large numbers of similar transactions to review over many years. It is more challenging to find valid comparators for IP, given its very varied nature technically, the wide range of commercial contexts, and the constraint that many such transactions are kept confidential and therefore not visible.

• The Future income approach seeks to determine the estimated future cash that can be directly associated with ownership of IP, and is often the most appropriate approach of the three. It requires development of a scenario-based business model of future cash flows that are attributable to the IP. The value of future cash flows is then discounted back to today using a discount rate that is appropriate for the level of risk associated with the business and market volatility.

Valuation of patents is more challenging where they are held by early-stage companies for products or inventions which do not yet produce income or royalties as the future value of business dependent on them is much more uncertain than it would be for a company with established products and trading record.   An assessment of the underlying technology and market is required.

There are many examples to show how IP can realise significant value in an M&A situation and also some examples where due diligence has revealed significant risks.   By ensuring that all parties are clear about the value of the intangible assets in a potential transaction, whether they are fully protected and what opportunities may exist to further commercialise them, the organisations involved will be in a more robust position to judge on what basis a merger or acquisition should take place.

This article was published by LES News Exchange.  To read “Having the right IP evaluation strategy for acquisitions” click here

Audio tours are popular in large museums and galleries but in the UK alone there are 1000s of churches, historic houses and other cultural sites, with millions of visitors, who cannot afford to produce them. ViewPoynt® uses mobile and web technology to address this untapped market in a new and rewarding way.

ViewPoynt® allows managers of venues, businesses or any organisation to create their own smartphone audio guides.   Those creating the guides open a ViewPoynt account to access online tools and instructions and are then helped to design their tour by uploading voiceovers, photos etc.  The tour can then be taken by visitors who simply download it to their mobile devices for a small fee.

Announcing the win the judges said: “ViewPoynt, we feel, will be able to come to market rapidly and we believe that there are many other vertical avenues and markets that could be explored. We believe therefore that it has the potential for sustainability and that is why we selected you.”

Chris Whatmore, Director, ViewPoynt said “After a year of learning, changing and improving, we’re really grateful for this vote of confidence in our future and hope that in one way or another everyone will continue to be a part of it!

Our congratulations go to Chris and ViewPoynt!

For more information on ViewPoynt click here

CPI uses its market knowledge and technology understanding to develop and prototype products and processes quickly and efficiently with minimal risk to its public and private sector partners, working in the innovation space between the discovery of an idea and the commercialisation of a product or service. CPI’s role is to help British industry make things better, quicker, cheaper, more innovatively and also to help industry develop new and innovative world-beating products.

Early in 2010, Coller IP was appointed as a member of a panel set up by CPI under the Innovation Accelerator Programme. The purpose was to assist in the provision of intellectual property services to its collaborators and partners for the development of new business opportunities (NBO). Core to the work that was commissioned by the CPI was undertaking prior art research and searches, IP landscaping and identification of key organisations operating in the same IP space.

The market sectors for which we carried out landscape analyses for businesses being supported by the CPI, were primarily associated with:

• Life Sciences
• Functional materials
• Advanced Processing
• Low Carbon Energy (waste to energy, fuel cells, renewable technologies etc.)
• RFID devices
• Industrial Biotechnology

The reports that we prepared helped each of the businesses to develop a better understanding of their positioning and of the opportunities for further development and commercialisation of their IP; while at the same time identifying other organisations that are active in the field, some of which may have been previously unknown to the business receiving support. This information has helped with the development of each business’s IP and associated commercialisation strategy in their respective markets.

“After being appointed to our IP panel, Coller IP won a number of mini-tenders, delivering useful and effective information for Innovation Accelerator clients. Our clients were very pleased with the quality of this service which was provided for the duration of the whole project.” – Sandy Gunn, Market Sector Specialist

To download a pdf of IP Landscaping in support of potential commmercialisation click here

AFC Energy the industrial fuel cell power company agreed an equity investment of £8,670,212 in to AFC Energy by Ervington Investments Ltd (“Ervington”), whose ultimate beneficial owner is Roman Abramovich and which is associated with Millhouse LLC, an investment advisory company to Mr Abramovich.

The investment has been made through the subscription by Ervington to 32,594,782 new ordinary shares of 0.1p each in AFC Energy (“New Shares”), at an issue price of 26.6p per share (being the closing offer price on Friday 5th October 2012, the date of the subscription offer) and will raise £8,670,212 gross, £8.27 million net of costs. The New Shares will represent 15 per cent of the enlarged issued share capital of AFC Energy.

The funds raised will further strengthen AFC Energy’s balance sheet and provide the Company with additional cash resources to execute its long term growth strategy and invest in its low cost fuel cell technology over the next several years. Following receipt of the funds, AFC Energy’s total cash balance will be £11.2 million.

Ian Williamson, chief executive of AFC Energy, said: “This investment by Ervington is a ringing endorsement of AFC Energy’s innovative technology and its strategy to become a leading hydrogen fuel cell energy supply company for industrial and utility-scale applications. Our low cost hydrogen fuel cells are cleaner and more efficient than technologies that use combustion to generate energy like gas-fired power stations. They also supply continuous, base-load power unlike other clean energy sources such as solar and wind power. Ervington’s support not only enables us to take full advantage of our commercialisation plans expeditiously but will also provide us with high level access to energy users and potential partners globally.”

Application was made to the London Stock Exchange for the New Shares to be admitted to trading on AIM and admission became effective on 16 October 2012, when the share price doubled from that earlier in the month.  At the end of October the share price is now maintaing a healthy 150% of the stock market price at the beginning of October 2012.

For more information on AFC Energy click here

Managing intellectual assets, including intellectual property (IP) effectively is vital to business success and, unfortunately, the threat of IP crime needs to be taken seriously. Counterfeiting and piracy has increased hugely over the years, and is no longer confined to cheap, low-cost counterfeit goods but has spread to large-scale manufacturing plants that can produce, for example, cheap and realistic – and sometimes therefore dangerous – copies of drugs, mechanical parts and electrical appliances.

A report in 2011 produced by consultancy Detica in partnership with the Office of Cyber Security and Information Assurance in the Cabinet Office estimated that the economic cost of cybercrime to UK businesses is £21bn per annum of which £9.2bn per annum is from IP theft. The report also said that IP theft has the greatest economic impact of any type of cyber crime considered in the study, and is likely to have the largest impact on companies that create significant quantities of IP or those whose IP is relatively easy to exploit.

A marked change in multinational business models, with local business giving way to regional and global supply chain models, and with decisions increasingly being made at international level to facilitate accepted tax structures, all has an impact on the need to protect IP. With increasing complexity in the supply chain, together with more and more pressure to get products delivered faster, the need for a collaborative business model becomes greater. This does however present challenges – which may not always be obvious – to intellectual property, and therefore to the business.

So how should businesses go about making their intangible assets work for them? There are three key aspects to consider in many supply chain IP strategies: where the value lies (valuation); where the value remains (protection); and where the value is added (efficient routes to commercialisation).

The first step in compiling the strategy is to undertake a thorough audit. Determining exactly who owns what within the supply chain and what needs to be protected is important before collaboration is formalised. A company’s real value is far more than simply filing patents, and perhaps registering trademarks and designs. It also resides in its wider intangible assets, which include so-called ‘know-how’ as well as branding, skills, policies, creative works and processes. Identification of all the valuable intangible assets in a company can be done internally or by calling in outside specialists to undertake an audit and landscaping exercise. It is only by knowing where its value lies that it can gain most from playing its part in the value chain.

The second step is to ensure that protection is as watertight as possible. An organisation needs to be able to retain its assets of value within the supply chain. In addition to having the right patents and trademarks in place an organisation needs to ensure, for example, that its employees can’t take ideas to a competitor or another part of the external supply chain. If IP is not protected — or not protected thoroughly enough, for example in each significant country where it may be at risk — there is a real possibility that trading and product names can be stolen as well as its ideas and inventions. Sometimes this could come about because an organisation in the supply chain discloses, possibly inadvertently, a product before it has been given patent protection, which could lead to competitors gaining a valuable edge. In some countries, trade secrets are protected by an expressed or implied contract. That in effect means that because they are not specifically protected by law, they may not be protected at all, or inadequately. As professional counterfeiters look to develop their businesses and intercept supply, it becomes ever more important to address the issue of the security of IP in the supply chain.

Intellectual property comprises many elements with legal protection. It includes:

Trademarks

Patents

Copyright

Registered design right

Unregistered design right

Database rights

Trade Secrets

Protecting IP in a supply chain particularly when trading across borders, can seem quite a daunting process, because each country has different procedures and there can be pitfalls in obtaining IP in each country. If an organisation has decided to trade in a particular country, it needs to ensure its intellectual assets are protected, particularly for its goods, as soon as possible in that country through one of the rights indicated above – an IP advisor will recommend the best route according to the nature of what is to be protected.

Attitudes to IP vary widely from country to country. Although the situation is improving, in some countries such as China and India for example, some foreign companies have got into difficulties in the past when trying to prevent others using their IP, largely because reproduction of goods and designs historically has been how business is done in those countries, and employees of a company may sometimes not

even be aware that such reproduction is forbidden. The first step, before entering into or expanding a supply chain arrangement, is to determine the extent to which local law protects your IP. Any agreement needs to ensure, for example, that a supplier abides by such laws as do exist; define the IP that needs protecting in the clearest possible terms; and be very clear about confidentiality.

We recommend that wherever commercially appropriate a company should register the rights to its inventions, trademarks or designs. Filing an application establishes a

record of when rights came into being. Overseas rights that are not registered are very difficult, if not impossible to protect. As with most things, preparation is vital, and when it comes to the supply chain, careful attention to the nature of contracts is very important as is having a good process in place for dispute resolution from the outset. Contracts with suppliers, for example, should ensure that subcontractors of the company they are dealing with are not allowed to use patents, designs, trademark (or other IP that needs to be protected) without a specific license from you to do so.

Where aspects of product development have been outsourced in the supply chain, it is important to understand exactly how far such a contract will protect you. For example, will it stop the subcontractor selling a similar – although not identical – design to another company? Or a perhaps a component of the design they have produced for the contractor?

Planning early about how your rights will be used is vital. One way of ensuring that the owner of the IP retains control over their rights is through licensing, in which case you will need licensing agreements, and will need to be clear about the way your rights will be used by the licensee. It is also important to consider aspects such as how products and packaging are designed and protected so they cannot be easily counterfeited in the supply chain.

Another area to consider regarding IP in the supply chain, is that transfers of IP assets to different entities or across borders, or adding IP value can have tax implications. There can be complex monetary flows and there is a need to understand how the IP has been created and used in the business so tax

implications can be managed, especially where there might be shared brand value. Consideration can be given, for example, to moving IP ownership into an entity in a chosen tax jurisdiction and creating licensing and royalty structures to manage monetary flows. Tax, IP and transfer pricing all need to be understood in these circumstances and experts are required provide their combined expertise to the business decision-makers.

When developing your supply chain strategy and ensuring that your intellectual assets are fully protected in the supply chain, especially when trading across borders, we recommend taking IP advice, preferably at an early stage to ensure pitfalls are avoided, opportunities are maximised and costs are kept to a minimum. It can be time-consuming and costly to sort out errors later. In addition, IP protection, including contracts, needs to be reviewed on a regular basis to ensure that, as organisations and legislation change, full protection remains in place and the intellectual assets continue to contribute optimally to the business. By taking care to ensure that intangible assets and rights are as protected and managed as efficiently as possible throughout the supply chain, companies can trade and remain competitive in an increasingly global world.

For a copy of Guarding what’s yours click here