InterContinental Finance September 2011
ICFM explains how Coller IP has carved a niche for itself within its chosen area of specialty by providing a full range of specialist Intellectual Property (IP) services.
In the Board Rooms of today’s progressive companies, CEOs and CFO’s are now elevating Intellectual Property to the Board Agenda recognising its importance as a major business asset.
With Intellectual Property often representing the lion’s share of intangible assets,which in turn typically represent 80% of the market value, there is much at stake for the Board to consider. Coller IP provides a onestop shop for the advice required to ensure that IP value is appropriately understood and managed in the most effective way.
The challenges of establishing effective IP management within a business, financial reporting constraints, and working out where responsibilities lie between functions mean that intangible assets are often misunderstood and consequently undervalued on the balance sheet.
Jackie, along with Jim Asher, leads a specialist team of IP professionals at Coller IP that works directly with Board members and management teams to ensure that intangible assets are managed effectively by key staff within a client’s business.
We work with business of all sizes and stages of development whether they be multinationals with an existing IPmanagement function that requires review or support, through to those who are just getting started and wish us to act as their virtual chief intellectual property officer.
All of the staff within Coller IP have technical backgrounds as well as further commercial or legal qualifications and have built on their experience of working bothwithin a corporate environment and in private practice and with large established and small start up companies.
Coller IP’s activities are tailoredtomeet theneeds of its clients and range fromproviding IPmetrics for Board Reporting; pinpointing capturing and protecting IP that is valuablewithin the business; placing a monetary value on the IP assets; determining if there are benefits for the balance sheet; assessing the company’s position with respect to competitors’ activity; due diligence; considerations for effective tax planning; and patent and trademark attorney services.
These are but a few of the IP issues that Coller IP is experienced in. Indeed, an important starting point is to determine and communicate the appropriate IP Strategy and plan required to optimise the return that our clients gain from their own investment, or an investment in corporate know-how, R&D and product and brand development. Our clientsmay simply need help with their patent and trademark casemanagement. This is a service which our attorneys do provide, but in our experience our client engagements extend much further than that, because our clients gain a deeper understanding of how their IP management really underpins the value of their business.”
Coller IP has developed an IP Management Scorecard which provides Board Members with a%score of howwell they are performing against standard best practice benchmarks. It looks at the four elements of IP Strategy, IP Knowledge, IP Processes and IP Resources to determine a company’s performance,and how improvements might be made in each area to increase value.
Many company boards have not placed a value on their IP. For some, IP value is a measure of what IP adds to the bottomline for a company, however, the problem for many Boards is finding the rightmetrics tomeasure it. Coller IP has developed a Board Reporting Pack, that shows the metrics to measure and those onwhich decisions can then bemade to improve performance. This in turn builds greater value and return on investment from the know-how and innovation developed within the business. When it comes to placing a numerical value on intangible assets,Dr Asher,chief operations officer, leads Coller IP’s valuation practice.
Understanding the value of intangible assets is often a key requirement at critical business milestones. They may represent the core of the commercial value of a business, but are not always on the balance sheet. Pointing out that Coller IP provides valuations for a full range of purposes and circumstances, Asher says: “The last year we delivered independent valuations for IPOs, M&A, insolvency, share issue, tax planning, balance sheet restructuring, divorce and even probate.”
Coller IP has developed its methodologies to value the full range of categories of intangible assets,fromIP assets such as patents and trade marks, through to the less tangible assets such as know-how, positioning and customer relationships.
In preparation for a recent IPO,we valued the assets according to asset category and business operation.Our clientwas able to attribute value to different operating units,geographies,and so on,and to determine what was underpinning that value – whether it was more formal IP in the form of patents and trademarks,or other factors such as know-how, expertise and long standing client relationships.
Coller IP’s business has continued to grow over the past three years as the investment market has ebbed and flowed.
It’s been an exciting journey since Jim and I founded the business concept in 2004.We have seen the fall and subsequent return of activity in due diligence for venture capital firms in recent years, alongside a falling peak, but nevertheless sustained requirement from insolvency practitioners, and a focus on cost cutting and drive for effectiveness from operating companies. Throughout these changes in the economy,we have had to be flexible to our clients’changing needs.
The TLC for IP approach developed by Coller IP ensures that IPmatters are considered from a combination of technical, legal and commercial perspectives,so that IP is dealtwith in a business context, taking account of differing financial and economic climates.The firmhas introduced this approach to a number of its clients during recent change events, advising investors such asWhebVentures and Icos Capital, and companies such as AZ Electronic Materials, Absolute Robotics, Prosonix,AccentusMedical and CompactGTL.
KEY TO COMMUNICATION
The requirements for communicating the importance and value of IP are different according to the structure and size of the business. For example, Board members and generalmanagement teams need information and metrics that can be easily assimilated and onwhich strategic decisions can be based. The IP and R&D teams on the other hand need a finer level of technical data and support. Often there is a communication divide and our tools and templates close this gap. Once IP issues are understood at all levels, then the business is in a good position to take the necessary commercial and operational decisions which impact positively on the P&L and balance sheet. Without that understanding,IP management simply becomes either a matter for the legal department or a cost burden.”
Best Practice in IP Management includes providing an understanding of competitor activities. Not all companies wish to undertake a comprehensive strategic review of their IP portfolio, because of the perceived length of time it may take. Recognising this challenge and as a result ofworking with awide range of clients,Coller IP has therefore developed tools which provide a view of a company’s competitive position ranging from an outline commercial risk assessment to full legal due diligence,validity and infringement opinions.
Knowing your competitors’ activities and whether there are any specific potential infringement issues is a key input to planning a company’s R&D programme. Being able to work around any patent thickets that your competitors may have,and growing your own patent clusters and trade secrets to protect your own position is key to success in technology development. Those companies reliant on brand recognition would equally wish to understand the trade mark landscape around their products and brands.”
The interest in strategic intellectual property management and securing value from intangible assets has grown considerably over the past decade. The role of the Global IP Manager or Chief Intellectual Property Officer is now established in leading companies and extends beyond the legal function.
At a recent international IP business congress in San Francisco,where some of the top companies were represented to discuss intangible asset management, Roger Shang, chief patent and technology counsel, Alibaba Group was asked:“What do you believe is the key issue in IP at the moment?” He replied, “How quickly we can get to a place where senior management in most companies are as comfortable managing IP assets as they are managing the rest of their business”.
Coller IP’s goal is to work with its clients to allow them to reach a position where they are comfortable managing their IP assets and where their IP assets are of high quality and value. It’s rewarding to see our clients reaping the benefits fromgood quality IP management, securing significant investment, achieving successful IPOs and increasedmarket value.
For a downloadable pdf of The Intellectual Property Champions click here