ICIC 2014 Valuing IP in the Chemical Space – Science, Art and Special Considerations
37
VALUING IP IN THE CHEMICAL SPACE – SCIENCE, ART AND SPECIAL CONSIDERATIONS Bob Stembridge Customer Relations Manager Thomson Reuters 13 th October 2014 REUTERS/Nikola Solic
-
Upload
dr-haxel-congress-and-event-management-gmbh -
Category
Internet
-
view
523 -
download
2
description
The valuation of intellectual property is becoming an increasingly important component of realising return on R&D; investment, overall business strategy and IP portfolio management. Like other forms of property, the value of intellectual property is determined by what the buyer is prepared to pay for its perceived value, and what the seller is willing to accept. This is ultimately decided by negotiation. However, there is much that can be done to substantiate the value in support of the position of either the seller or the buyer. From the seller’s viewpoint, being able to place the IP accurately on the competitive landscape is critical to establishing how important the IP is, and hence its perceived market value. On the buyer’s side, the accurate assessment of the market position held by the IP on the technology landscape against competition will help determine whether this is a blocking technology, or whether it can ultimately be worked around. This is a combination of science and art. There are also special considerations to be factored in for the chemical technology space. In all cases, IP information and analysis tools play a central role in providing support for valuation of IP. This presentation will use a case study approach to examine the issues and provide insight into how organizations can more accurately assess the importance of their IP, and hence the current and potential market value of that IP.
Transcript of ICIC 2014 Valuing IP in the Chemical Space – Science, Art and Special Considerations
VALUING IP IN THE CHEMICAL SPACE – SCIENCE, ART AND SPECIAL CONSIDERATIONS
Bob Stembridge Customer Relations Manager Thomson Reuters 13th October 2014
REUTERS/Nikola Solic
AGENDA
• The importance & value of IP
• How IP can be exploited
• Valuation of IP
– Quantitative
– Qualitative
• Information to support valuation
• Case study
THE IMPORTANCE OF IP
• Protection for innovation
• Various types
– Copyright©
– Designs
– Trademarks®, Service marksSM
– Patents
• Utility, design, petit..
• Can be bought, sold,
licensed etc…
3
VALUE OF INTANGIBLE ASSETS
4
after Ocean Tomo
THE VALUE OF PATENTS
Research &
Innovation
Application &
Prosecution
Maintenance &
Monitoring Licensing &
Commercialization
Protection &
Assertion
COMMERCIAL
RETURN ON
INVESTMENT
A patent is a
contract between
the state and an
individual whereby
the state grants
monopoly rights to
the individual to
exploit their
invention in return
for which the
individual provides
full disclosure of
the invention
5
HOW CAN IP VALUE BE EXPLOITED?
• Direct
– Licensing agreements
– Sale
– Investment collateral
– Infringement damages
• Indirect
– Joint ventures
– Partnerships
– Spin offs
6
WHAT MAKES VALUABLE IP?
• Gateway technology (standard essential patents)
• Disruptive technology – e.g. Digital photography
• High value and/or
global markets
• Solutions to important
unsolved problems
7
QUANTITATIVE METHODS FOR VALUATION
1. Cost-based method
2. Market-based method
3. Income-based method
4. Option-based method
8
COST-BASED VALUATION
• Based on direct relation between costs of
development of the IP and its economic value
• Two key methods:
– Reproduction cost method: estimates of costs to
reproduce IP through purchase or development
– Replacement cost method: estimate of costs to obtain
equivalent IP asset
• Costs considered:
– a) Direct expenditures, such as costs of materials, labour
and management
– b) Opportunity costs, relating to the lost profits due to
delays in market entrance or lost investment opportunities
9
MARKET-BASED VALUATION
• Based on estimation of value of similar market
transactions (e.g. similar licence agreements)
• Comparison is performed in terms of utility,
technological specificity and property
• Comparable transactions may be recorded in
– company annual reports;
– specialised online databases;
– publications dedicated to licensing and royalties;
– court decisions concerning damages
10
INCOME-BASED VALUATION
• Based on the existing or expected income flow of
the IP asset
• A discount factor is applied to the estimated income
to adjust it to present circumstances
– Discounted cash flow method
– Relief from royalty method
11
OPTION-BASED VALUATION
• Based on options and opportunities related to the
investment
• Reliant on option pricing models (e.g. Black-
Scholes) for stock options to achieve a valuation of
a given IP asset
12
QUALITATIVE EVALUATION
• Valuation through analysis of different indicators to
determine the importance of the IP asset
• Valuation indicators include:
– Technology level of the innovation
– Competition activity in the innovation space
– Market for the innovation
– Legal aspects (validity, remaining term)
13
INFORMATION TO SUPPORT VALUATION
• Technology landscape
• Competitive landscape
• Market landscape
• Strength of IP
– Maintenance status
– Remaining protection time
– Likely validity
– Technological importance (impact)
14
INFORMATION SOURCES, TOOLS AND SERVICES TO SUPPORT VALUATION
• Derwent World Patents Index® (DWPI)
• Thomson Innovation
• Trademark.com®
• SAEGIS
• File Histories
• Thomson IP ManagerSM
• IP Search Services
• IP Translation Services
15
THOMSON INNOVATION: THE NEW STANDARD IN IP RESEARCH
16
Patent Search: Access the most
relevant and comprehensive, global
IP data, including the Derwent World
Patents Index®, Asia-Pacific patents
and Scientific Literature.
Streamline your work with powerful
productivity and collaboration tools.
Patent Analysis: Turn large
volumes of data into actionable
intelligence with interactive
analysis and visualization tools.
THE THEMESCAPE ANALYTICAL AND VISUALIZATION TOOL
17
ThemeScape Map
• Integrates data from multiple patent records in a visual form
• Uncover relationships between patent documents and helps focus on
related technology in a crowded space
ThemeScape Map allows you to understand quickly
the patent landscape and market dynamics
MAPPING IP TO THE INNOVATION SPACE
• ThemeScape Map can be used to support IP
valuation through:
– Technology landscape: understand how
patents fit in the overall technology
landscape and identify dependencies
– Competitive landscape: compare
IP position in the landscape relative to
competitors to identify threats/opportunities
• Thomson Innovation can be used to support IP
valuation through:
– Market landscape: determine potential market size
– Legal considerations: claims scope, citation impact
18
CASE STUDY
19
MAJOR PLAYERS
21
TECHNOLOGY LANDSCAPE
22
Key Novartis technology links to other areas
COMPETITIVE LANDSCAPE
23
Major competitors in the Valsartan space
MARKET LANDSCAPE
24
MARKET LANDSCAPE
25
MARKET LANDSCAPE
26
MARKET LANDSCAPE
27
LEGAL CONSIDERATIONS
• Strength of IP
– Maintenance status
– Remaining protection time
– Likely validity
– Technological importance (impact)
28
MAINTENANCE STATUS/REMAINING TERM
29
1 2 3 3 3 4
29
US Patent term normally 20 years from date of filing
1: Filing date 2: Grant date 3: Maintenance fees 4: Patent expiry 1 2 3 4
LIKELY VALIDITY
30
Original claims
LIKELY VALIDITY
31
Patent office examination finds novelty destroying
prior art
LIKELY VALIDITY
32
Modified claims of granted patent
TECHNOLOGICAL IMPORTANCE (IMPACT)
33
VALUE OF NOVARTIS VALSARTAN PATENTS
34
SPECIAL CONSIDERATIONS
• Given high failure rate, early stage licensing is high
risk, therefore lower value
• To bolster value, product on offer should form part
of a strong portfolio
– Patents should cover broad chemistry space and sizeable
market
– Patents surrounding core technology are useful to ring
fence the core offering – novel molecules, synthesis,
compositions, method of treatment, administration routes
etc.
– Patents should be valid and in force in anticipated
markets of interest
35
CONCLUSIONS
• The value of IP can be realised through licensing or
sale, as investment collateral, or as the basis of joint
ventures, partnerships or spin-offs
• IP valuation is a mixture of science and art
• Quantitative methods exist to help put a dollar value on
the IP
• True value lies in how important the IP is, how
dependent other technologies are, the market the IP
addresses, what the competition are doing in the IP
space and how strong the IP is
• Reliable information sources, tools and services are
critical in determining the status of IP and its value
36
THANK YOU! [email protected]
