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Third WIPO/INSME International Training Program Financing your business with Intellectual Property

Learn about the importance of conducting an IP audit in your business strategy for acquiring intellectual capital. Explore different business strategies and the role of intellectual capital in driving innovation and competitiveness. Gain insights into valuing and protecting your intellectual capital assets.

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Third WIPO/INSME International Training Program Financing your business with Intellectual Property

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  1. ZERNIKE (UK) Third WIPO/INSME International Training Program Financing your business with Intellectual Property Topic 2 Acquiring your Intellectual Capital: The relevance of an IP audit in your business strategy Bob Hodgson Zernike (UK) Limited Geneva December 2010

  2. ZERNIKE (UK) First some simple definitions • Technology – is how we do things now • Knowledge – is what we already know • Innovation – is doing things differently • Science – is one of the main drivers of innovation • Development – is how we apply science to do useful things • Research – is what we do to find out what we currently do not know Bob Hodgson Geneva 2010

  3. ZERNIKE (UK) National competitive strategies and SMEs • Natural resource based: • seen as second order • but crucial to jobs and dependence • Labour surplus: • productivity still an issue • quality standards in products • Systems integration: • rapid adoption and adaption • source of innovation • Advanced technology: • R&D driven leading edge • commercialisation emphasis Bob Hodgson Geneva 2010

  4. ZERNIKE (UK) Alternate business strategies and intellectual capital • Lowest cost – efficiency savings for cost edge • Value performance – upgrading at acceptable cost • Most advanced – best performance driver • Greenest – lowest accredited footprint • Service +/- product – speed and responsiveness All rely on knowledge and for some innovation is central Bob Hodgson Geneva 2010

  5. ZERNIKE (UK) Mismatches at different levels • National imperative - upgrading productivity and promoting innovation essential • Business level success is continuing to do right what you have always done – change is risky! • Competitiveness challenge: • reconcile the two positions • grow new higher value businesses • improve existing businesses Bob Hodgson Geneva 2010

  6. ZERNIKE (UK) Real Economy: innovation engines • ARM – Advanced RISC Machines • IP generator • income from Licences and Royalties • market cap - billions • Generics Group Plc – technology solutions provider • IP accumulator • and commercialiser – spinning out companies • massive P/E ratio on flotation – hope value • Supported by specialist service providers Bob Hodgson Geneva 2010

  7. ZERNIKE (UK) The starting point: has it potential value • Who will buy or already buys my product/service? • What will they pay? • How many potential customers are there? • What will any innovation replace? • Will it work and how much will it cost to make? • Is it likely to be profitable? Bob Hodgson Geneva 2010

  8. ZERNIKE (UK) Communicating potential: investment readiness • Business plan • Market data and evidence • Communications skills • Differentiating the investment pitch • Cultivation of the risk takers Bob Hodgson Geneva 2010

  9. ZERNIKE (UK) Recognising what is there and what to be added • An IP audit to codify present technology • Identification and packaging • An IP search • Negotiation and acquisition Bob Hodgson Geneva 2010

  10. ZERNIKE (UK) Personnel and Intellectual Capital • Skilled people are the capital of the knowledge economy • Codified v tacit knowledge • Methods of protection: • formal registration • contract of employment • equity share • Restrictions of trade? Bob Hodgson Geneva 2010

  11. ZERNIKE (UK) What are your Intellectual Capital Assets • Advanced technology – the archetypal IP candidate • Market credibility – trade marks and brand reputation • Production expertise – control and quality oriented • Product performance – incremental advances or radical changes Bob Hodgson Geneva 2010

  12. ZERNIKE (UK) Sources of technical and business innovation • Clients or customers 70% • Competitors • Internal sources • Associations • Technical standards 50% + • Conferences/trade press • Scientific journals • Consultants • Universities • Government labs 20% Bob Hodgson Geneva 2010

  13. ZERNIKE (UK) Supply side perspectives • The inventor: • the idea that will change the world – huge hope value • and make me rich • The research institution: • an output in its own right • with weak commercial perspective • The commercial licence provider: • revenue generating expectations • tempered with restriction of own potential action • Alignment of risks and rewards • clarity and competence of owners • capacity to pay and to exploit • position in market Bob Hodgson Geneva 2010

  14. ZERNIKE (UK) Valuation: the unresolved challenge • Easy – when there is a revenue stream • But even then worries about sustainability • Before the revenue stream it is much more uncertain • And is characterised by information asymmetries • inventor knows the technology • entrepreneur knows the market • investor needs to independently evaluate both • and then to reach a deal! Bob Hodgson Geneva 2010

  15. ZERNIKE (UK) Some additional limitations • IP system is not always applicable • advanced engineering around F1 racing • accumulated tacit knowledge • Commercial perspectives can cripple business • Pro fit and its American licensee • defence costs can overwhelm revenues • all but a few USA universities spend more on IP than they receive Bob Hodgson Geneva 2010

  16. ZERNIKE (UK) Making the market work • Stimulating the supply side • Stimulating interest among MSMEs • Training brokers and agents • Educating fund managers • Ensuring quality implementation • Building the history Bob Hodgson Geneva 2010

  17. ZERNIKE (UK) Thank You BOB HODGSON ZERNIKE (UK) Ltd The Grove High Street Sawston Cambridge UK CB2 4HJ 0(044)1223 526980 bhodgson@zernikeuk.com Bob Hodgson Geneva 2010

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