|For a conference session on IP and
business, held in the Gold Ballroom,
what could be a better symbol?
Moderator Jack Ellis, Asia editor, Intellectual Asset Management, opened the session by apologising for the loss of Erin-Michael Gill, CEO, Synthos Technologies, who was billed to speak, and then introducing Gerard Eldering (InnovateTech Ventures). Gerard's company has been involved in the launch of 17 start-up companies. Five have failed (three through lack of funding during the recession), while the other 12 are still going strong. Less than one percent of high tech companies actually get venture capital support. Some don't need it or manage without it -- and almost all don't understand patents very well, he added. Most start-ups are "IP-ignorant" and don't think heavily about patents; even if they know about patents, the building of a patent/IP portfolio tends to lurk at the back of their minds. Other start-ups are "IP-crazy" and are so focused on their patent filing that market research and product development get left behind and their capital is absorbed in patent filing.
Speaking in general terms, Gerard indicated that the number of start-ups that successfully emerge from the university sector is relatively low when compared with the large number of patents filed, maybe around 250 start-ups a year. Few if any emerge with the profile of the "ideal start-up", with a good balance in terms of time, effort and commitment in furthering their research, developing products and protecting their IP. The emergence of a start-up creates a good opportunity space in which support can be offered.
|Recruitment is still competitive, but a bit
less controversial than it used to be ...
- IP creation: technical skill, knowledge of the technical field of application
- IP commercialisation: business development and people skills
- Litigation: this does not exclude people skills
- IP policy and standards: this includes an ability to deal with regulatory issues.
Promising to keep us all awake, Michael Gulliford (Founder and managing principal, Soryn IP Group) told us how he left legal practice to found an IP management company, implementing patent management strategies for the today's ever-changing world. What does it take to succeed today, he asked. The answers are as follows:
|Alternative fee structures
are attractive for clients,
but not always for lawyers
- Sound portfolio construction: portfolios mustn't be allowed to take on a life of their own. It's important for businesses to make sure that their patents protect their own technology. Often a company's interesting IP doesn't fit its actual activity, but good tangential ideas from the technical staff should be monitored and evaluated. It's helpful to know where your IP lies in relation to your competitors' activities and how much you are spending on it. A realistic balance should be struck between quality and quantity in a patent portfolio;
- Sound portfolio management: selling, licensing and litigation are the three ways of gaining value from one's IP. 99% of patents on sale are of little interest to anyone, and friendly licensing is rarely an option for smaller entities. In today's environment it's very tough, especially for small software companies. Are there alternatives to sale, licensing and litigation? IP-based debt financing is one; royalty monetisation (ie selling royalty streams) is another;
- Building the right team: small companies will need the input of (i) IP strategists, (ii) entrepreneurial counsel [ie happy to accept contingency fees or "alternative fee structures", if "happy" is the right word ...] and (iiii) financial partners/litigation funders. The size of settlements is contentious here, since low settlements and licensing deals, bad litigation finance deals and poor lump-sum settlements can have long-term adverse consequences.