OxFirst Webinar featuring Professor Peter George Picht: "Injunctions in SEP/Frand Cases"

Our friends at OxFirst have another interesting free webinar titled, “Injunctions in SEP/Frand Cases,” scheduled for October 24, 2019, starting at 16:00 BST (14:00 CET).  The speaker is Professor Peter George Picht.  Here is his bio: 

Prof Peter Georg Picht studied law at Munich University and Yale Law School, did his PhD (summa cum laude) at Munich University/the Max Planck Institute for Innovation and Competition, and holds a masters degree from Yale Law School.

He has been working, i.a., with the EU Commission’s DG for Competition, as a Senior Research Fellow with the Max Planck Institute for Innovation and Competition, as well as with two international law firms.

Prof. Picht now holds a chair for Economic Law at the University of Zurich and is head of the University’s Center for Intellectual Property and Competition Law (CIPCO). He remains affiliated to the Max Planck Institute as a Research Fellow and is an Of Counsel with the law firm Schellenberg Wittmer. His further affiliations include board memberships in the Academic Society for Competition Law (ASCOLA), the Association Européenne du Droit Èconomique (AIDE), and the Munich IP Dispute Resolution Forum. In 2019, he will be a Visiting Professor at King’s College, London.

Prof. Picht’s academic teaching and writing, as well as his counseling activity, focus on

· intellectual property law

· competition law

· international private and procedural law, in particular commercial arbitration (mainly IP and Competition), trusts and estates.

In these fields, he advises governments, companies, foundations, trusts, as well as private persons and families. Prof. Picht is admitted to the bar in Germany and Switzerland (Art. 28 BGFA).

For further information, see:

http://www.rwi.uzh.ch/de/lehreforschung/alphabetisch/picht/person.html

https://www.rwi.uzh.ch/de/oe/cipco.html

Here is a link to register: https://register.gotowebinar.com/register/2194048367188788236, and here are the details concerning registration: 

Attention, please sign up with your professional email account. We don’t accept registrations from personal email addresses. Participation is limited at 100 participants. We reserve the right to eliminate participants.

IP Valuation for Investment Purposes -- Part 1

Here is the second post by Dr. Roya Ghafele.  It is the first part of a two part series on the importance of IP Valuation.  

IP valuation for Investment Purposes – Part 1

By Roya Ghafele, OxFirst Ltd. www.oxfirst.com

With the European Central Bank’s interest rate decision continuing to be at 0%, investors are forced to put their funds to work in different ways.  Can patents, the underlying rights to an invention, offer such an alternative? 

Any type of investment decision is hinged on an adequate appraisal of risk and return rates of an investment. Ideally, an investment yields high returns, while risk rates are kept as low as possible. The investment in intellectual property forms no exception to that.

The adequate valuation of intellectual property can hence play an important role in the promotion of technology markets. It is through this instrument that investors can make an educated placement of their funds. In spite of the instrumental role that IP valuation could assume, it is often ignored in the financial community. 

The problem does not seem to be that it is not possible to value IP for investment purposes or that IP has any intrinsic features that would prevent its valuation. The problem is a lack of awareness of the many opportunities provided by IP valuation. If investors have IP on their radar screen at all, then they tend to contend themselves with counting patents (apparently, the more, the better seems to be the premise) or to check if the company is involved in any legal proceedings. As to early stage technology companies, investors will at best consult a patent attorney who can undertake a freedom to operate analysis of the underlying patents of a technology. While such an assessment can provide helpful legal insights, it does not allow to understand how IP relates to potential business performance.

IP managers in technology companies on the other hand side do often also not know how to best communicate the value of patents to financial analysts, angel, VC or Private Equity Investors. Current accounting standards that allow to only partially reflect the value of patents do not make things easier.[1]  This leads to market inefficiencies, where valuable technology sits gathering dust, while investors are not able to scope potentially attractive financial opportunities. Already in 2014, the European Commission called for an enhanced usage of IP valuation as a means to better link those in search for funding with those eager to put their money to work.[2] Equally, the UK Intellectual Property Office launched an initiative inviting the City of London to ‘Bank on Intellectual Property.’ [3] Those initiatives have so far shown little results and the best practice for leveraging IP in financial transactions still seems to stem out of Silicon Valley, where some financial institutions have been reported to use IP valuation for investment purposes. [4]  Yet, institutions like these are the worthy exception, rather than the norm. 

So, with a lot to gain from overcoming the little understanding that prevails on IP valuation, the question arises what technology entrepreneurs can do to attract investors to their business.

I turn to this question in the part 2 of this comment, where I will seek to offer some practical tips that may help to better link IP to cash flows.

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[1]  GHAFELE, R. ‘Accounting for Intellectual Property?’ Oxford Journal on Intellectual Property Law & Practice, Nr. 5/7 2010, at 37

[2] EUROPEAN COMMISSION, Report of the Export Group on Intellectual Property Valuation. http://ec.europa.eu/research/innovation-union/pdf/Expert_Group_Report_on_Intellectual_Property_Valuation_IP_web_2.pdf  (2014) at 7, 22-23, 57, 91,

[3] UKIPO ‘Banking on Intellectual Property? The role of intellectual property and intangible assets in facilitating business finance’ available at: http://www.ipo.gov.uk/ipresearch-bankingip.pdf (2014) at 221

[4] See About Silicon Valley Bank, http://www.svb.com/about-silicon-valley-bank/ (disclosing that Silicon Valley Bank’s clients include 50% “of all venture capital-backed tech and life science companies in the US” and that Silicon Valley Bank was established in 1983).

Welcoming Dr. Roya Ghafele to the IP Finance Blog!

IP Finance is delighted to announced that Dr. Roya Ghafele, the Director of OxFirst, will join our permanent team of bloggers.  I’ve pasted a short bio of Dr. Ghafele below.  Dr. Ghafele is planning to author a series of posts on IP valuation and management.  Please find her first post on IP valuation below.  We are very excited to have her join us!  


Here is her bio:

Dr Ghafele has been the Director of OxFirst, an award winning IP law and economics consultancy, since 2011. In addition, she has held academic positions in International Political Economy and Business with Oxford University since 2008 and was also a tenured Lecturer (Assistant Professor) in IP Law with Edinburgh University. Prior to that she had post-doctoral assignments at Harvard and U.C. Berkeley. From 2002-2007 she worked as an Economist with the U.N.’s World Intellectual Property Organization (WIPO) and the OECD. She started her career with McKinsey in corporate finance.

Her Ph.D. was awarded the Theodor Koerner Research Prize by the President of the Republic of Austria. Dr. Ghafele was trained at Johns Hopkins University, School of Advanced International Studies, the Sorbonne and Vienna University. During the course of her studies she was fully funded by the Austrian Government because her academic merits were continuously of outstanding quality. She is native in German and fluent in English, French and Italian.

Specialties: IP valuation, FRAND Royalty Rate Determination, IP and Competition Economics

Here is her first post: 


IP valuation – Why it Matters

The major challenge does not seem to be that patents or other forms of intellectual property cannot be valued or that IP disposes of any intrinsic features that would prevent its valuation. The challenge is that many IP managers are still rather ignorant when it comes to the valuation of intellectual property.  This can have a series of adverse effects. On the one hand, intellectual property may be inadequately managed. On the other hand, others in the company may in all honesty wonder what the bottom-line contribution of IP is to business. Without an adequate understanding of the value of intellectual property, much IP risks gathering dust and not being put to work in the most effective manner.

This raises the question how intellectual property can be valued. While there are many different methods that allow to value intellectual property, there currently exist three overarching principles that allow to value IP assets. These principles are in no way different from the valuation of any other assets, be they tangible or intangible in nature. These are the income, market and cost approach. Each of these methods offers different insights. Hence, depending on the situation, they can complement each other. The income method, measures value in terms of future revenues that can be generated from the asset. It looks at upcoming revenue streams and seeks to determine the current value of these assets. As the method is hinged on an outlook of what the future may hold, it is crucial to determine the discount rate, which reflects risks and probabilities associated with such potential future income. This method can be quite helpful if one is keen on enhancing the management of a patent portfolio. It gives the manager an insight as to how much the IP could potentially generate. This can help formulate a forward-looking IP strategy. The market method again looks at comparable rates that kind of similar IP could fetch in somewhat similar market transactions. As such the insight gained is what a typical rate could be for the IP. Such a method can give a helpful first insight when one is for example seeking to sell or license IP. It can allow to understand if one’s asking price is somewhat in the range of what others have wanted. That being said, it can be challenging to find such information and the method says nothing about the specific worth the patent has in a specific business context. The cost method again can help determine costs associated with IP creation. This can be useful when seeking to minimize costs in an IP Department.  

Each of these paradigmatic approaches have their strengths and weaknesses. They also vary in terms of the effort needed to find relevant information. But overall, they can help optimize expected results from intellectual property. Important to know is that any IP valuation is an off-book valuation and this makes it harder to systematically make use of data which has undergone the scrutiny of controlling. To the keen IP manager this is however nothing but a small stumbling block that should not prevent her to systematically manage IP for value generation.

Northwestern Releases Technology Standards and Standard Setting Organizations Databases and Congratulations to Dr. Roya Ghafele!

Northwestern University, Pritzker Law School, has released three databases on technology standards and standard setting organizations.  The announcement states:

The Searle Center on Law, Regulation, and Economic Growth is pleased to announce the release of three important databases on Technology Standards and Standard Setting Organizations (SSOs). The databases are available free of charge for all academic researchers.

The first database, known as the Searle Center Database on Technology Standards and Standard Setting Organizations, created by Justus Baron and Daniel F. Spulber, contains original data on the rules and membership of SSOs, and bibliographic information on published technology standards (including an original database of normative and informative references between standard documents).

The second database, created by Justus Baron and Tim Pohlmann (IPlyitics), contains the currently most comprehensive database of declared standard-essential patents (SEP) and the first detailed mapping of declared SEPs to a systematic dataset of standard documents.

The third database, created by Justus Baron and Kirti Gupta (Qualcomm), includes detailed procedural data on standard development at an important SSO, the 3rd Generation Partnership Project 3GPP.

The three databases are inter-related, and share a common system of identifiers for standards and firms to facilitate research applications combining the various databases.

Under the direction of Daniel F. Spulber, (Kellogg School of Management, Northwestern University, and Research Director of the Searle Center), the Searle Center's Research Project on Innovation Economics addresses a broad range of important issues involving intellectual property (IP), research and development (R&D), the market for inventions, innovation, and technology standards.

For details on the databases and the Searle Center's ongoing Research Project on Innovation Economics Project please visit: http://www.law.northwestern.edu/searlecenter/innovationeconomics
Papers describing the databases can be found at the following links:

- Justus Baron and Daniel Spulber: Technology Standards and Standard Setting Organizations: Introduction to the Searle Center Database, Northwestern Law & Econ Research Paper No. 17-16. Available at SSRN: https://ssrn.com/abstract=3073165 or http://dx.doi.org/10.2139/ssrn.3073165, forthcoming Journal of Economics and Management Strategy, 2018.

- Justus Baron and Kirti Gupta: Unpacking 3GPP Standards. forthcoming Journal of Economics and Management Strategy, 2018.

- Justus Baron and Tim Pohlmann: Mapping Standards to Patents Using Declarations of Standard-Essential Patents, forthcoming Journal of Economics and Management Strategy, 2018.

Please see the following instructions to receive access to the database:

- The three Searle Center databases are intended only for academic research. Commercial and or for-profit research is strictly prohibited.

- Prior to being granted access to the databases, all academic researchers must first compete a Data License Agreement (DUA).

- The DUA is available for download here: http://bit.ly/searlessodua
- Once requestor has filled out the required fields and signed the DUA, email a scan of the DUA to searlecenter@law.northwestern.edu

- Please note that a PDF electronic signature on the DUA is acceptable.

- All research assistants or research personnel that will have access to the data must also complete DUA's.

- Once we receive your signed DUA, we will verify that your application fits the criteria listed above. If we conclude that it does, we will then send you a link to a Box Folder where all of the files and supporting documents will be permanently hosted. You may have to create a Box account in order to access the databases.
. . .

The databases release is apparently for academics.  My guess is that others can access the databases for a fee. 

Congratulations to Oxfirst’s Dr. Roya Ghafele on joining the EU Commissions’ Group of Experts on Licensing and Valuation of Standard Essential Patents!  According to the press release:

The purpose of the expert group is to ‘deepen the expertise on evolving industry practices related to the licensing of standard essential patents in the context of the digitalisation of the economy, the sound valuation of intellectual property and the determination of fair, reasonable and non-discriminatory ("FRAND") licensing terms.’ The Expert Group’s importance to European and international governance formulation on FRAND is widely recognized. The Expert Group will address a host of complex issues pertaining to patents that read on standards, as already set out in 2017 in the E.C.’s ‘Communication from the Commission to the Institutions on Setting out the EU approach to Standard Essential Patents.’

OxFirst free webinar on ‘Assessing Damages under the IPR Enforcement Directive’

OxFirst is presenting another free webinar, which appears to be another in the line of quality programs. The topic will be- ‘Assessing Damages under the IPR Enforcement Directive’, and it will take place on May 17th, 2017, 3:00 PM- 4:00 PM GMT | 16:00-17:00 CET. The speakers will be Dr Roya Ghafele and Rasmus Kamstrup Bogetoft. The program is described as follows:

The talk is first of its kind to draw together a range of different publicly sanctioned sources that provide instructions on how to value intellectual property. We apply these to illustrate how damages can be assessed under the IPRED. In doing so, we seek to contribute to a more educated way of how to assess damages under the IPR Enforcement Director.

In doing so, we fill an important gap: While the IPRED contains a host of principles discussing how to assess damages, there are no guidelines, commentaries or further explanations that would help the Court to understand how to translate these overarching guidelines into concrete assessments of the economic worth of the damage due. This, in our view, leaves an important shortcoming, which could lead to otherwise avoidable inconsistencies. Taking a bigger picture, the practice of IP valuation remains unclear to many practitioners.

By consequence, it finds much lesser application than it should. There is a clear need to increase market actors’ confidence and certainty in IP valuation methods as a way to assess damages in litigation, but also in licensing negotiations and other IP transactions. This will allow judges and practitioners alike to better understand the business and the value of the IP itself and even provide decision makers with the required information to decide whether to enforce or to license IP.

Dr Roya Ghafele has been the Director of OxFirst, an off-shot from Oxford University, since 2011. She has held academic positions with Oxford University, Harvard, U.C. Berkeley and the School of Law at Edinburgh University. Prior to that, she worked as an economist with WIPO and the OECD.

Rasmus Kamstrup Bogetoft is an assistant attorney with the Danish law firm Plesner. He is also external teacher in IP law at the Copenhagen Business School. He studied law and economics at Yale University and holds a LLM in law from the University of Kopenhagen.

Please use this link to register