Latest IAM

The most recent issue of Intellectual Asset Management (issue 34, March/April 2009) tackles the following topics, among others:

* Standardising IP valuations: whether, what and how. Valuing IP is complex, with more than 50 different methods currently in use. Given the growing importance of IP to so many organisations, perhaps now is the time to re-think whether global valuation standards make sense;

* Business models, value chains and value propositions: to create maximum value from intellectual property rights, owners have to ensure that their IP management and business strategies are closely aligned;

* The reputation and intangible asset value crash of 2008. Over the last 12 to 18 months the percentage of listed company values that can be attributed to intangibles has fallen rapidly, to stand at under 50%. Serious rebuilding work is needed.

This issue comes with a complimentary copy of IP Value 2009 - An International Guide for the Boardroom. According to the publishers,

"This is the seventh edition of this comprehensive guide, and is published once again in association with NASDAQ, Morgan Stanley, PricewaterhouseCoopers and Thomson Reuters. IP Value 2009 features country-by-country analysis of key IP topics in over 50 jurisdictions from leading law firms. There is also an extensive review of the most important issues in maximising and protecting IP assets in the United States, as well as cross-border chapters and separate sections dealing with law, taxation, valuation and corporate finance".

The full text of the guide can be viewed and downloaded online here

Around the periodicals

The August 2008 issue of OUP's Journal of Intellectual Property Law & Practice (details here) contains two features of particular interest to IP Finance. The first is an article by Hidero Niioka (right), "IP in investment banking: IP in IPOs". According to the abstract

"This article looks at current IPOs, convertible bond offerings, trends of the global market, etc. In the context of this capital market trend, important legal issues arise.

Key points: The cases discussed concern IP litigation, civil procedure law, securities law, securities exchange law, and corporate law.

Practical significance: The purpose of this article is to provide a quick overview of how IP law issues can impact upon securities law issues. The article has a high practical relevance for those advising all companies that want to raise funds around the world".

The second is David Ehrlich's "Trade mark warranties in M & A transactions". According to the abstract,

"Legal context: As the credit crisis wanes and corporate liquidity becomes more available, deal making is sure to return to past levels of activity. Ask any of these dealmakers why they made their acquisitions and inevitably they will return to the ‘brand's equity’. Trade mark assets, however, are very unusual types of property which require finely tuned warranties in merger and acquisition (M & A) transactions in order to prevent costly set-backs and even litigation.

Key points:

• Both buyers and sellers in an M & A transaction have a mutual interest in accurately defining the trade mark assets included in a deal, but their interests may diverge when it comes to negotiating certain warranties.

• Buyers should seek wide ranging assurances of trade marks' validity while sellers should try to resist giving general warranties beyond their knowledge.

• Prudent negotiators should also consider the duration of warranties and negotiate limitations on breach of warranty claim amounts.

Practical significance: Many corporate deals are agreed upon in haste and neglect key trade mark issues that can cause serious problems and costly surprises years after a deal has closed. Through proper due diligence and clearly worded warranties, this risk can be reduced".

Sweet & Maxwell's Journal of Business Law (issue 6, 2008; details here) carries a feature, "Divergences of Security and Property Law in the European Union: the Need for Action", by avvocato M. Cristina di Luigi. Diappointingly (from the point of IP readers) this article makes virtually no reference to intangibles other than to recognise their existence and to concur that their position is complicated; nor does it appear to deal with UNCITRAL's work regarding the securitisation of intangibles and the specific issues regarding IP law.

Latest IAM reviews triage techniques for patent portfolios

The most recent issue of Intellectual Asset Management (issue 31, August/September 2008) contains a very interesting piece by Scott Bechtel (President of AmiCOUR International) and his colleague, AmiCOUR Vice-President Ray Throckmorton. The thesis of this article ("Maximum cost at minimum value") is that

"One of the disincentives to drilling into a patent portfolio to search out further value-enhancing opportunities is cost. However, there are ways to save significant amounts of money – something that financial modelling will help patent owners discover".

The authors discuss the initial screening ('triage') process in its traditional and more evolved forms, looking at the logic behind patent scoring systems and the balance between objective and subjective means of evaluation. The per-unit cost of determining whether a patent merits a full licensing programme is also considered, bearing in mind the realities of the business budget as well as the potential risks and rewards.

To see the full contents of this issue click here.