Using Intellectual Property as Collateral for Security Interests - May 2015
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The document discusses the significance of intellectual property (IP) from a business perspective, emphasizing its role as a valuable asset that can sustain and generate revenue for a business. It highlights various types of IP rights, the challenges of obtaining and maintaining them, and the importance of strategic planning in different industries. Additionally, it provides recommendations for businesses to effectively manage and leverage their IP for growth and market protection.
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Using Intellectual Property as Collateral for Security Interests - May 2015
- 1. Value of Intellectual Property From a Business Perspective Protecting your Business’s Most Valuable Asset
- 2. Starting a New Business Idea Plan Fund Execute/Prove Grow/Sustain
- 4. Planning Looking for New Markets
- 8. Overcoming Barriers to Entry
- 9. Funding
- 10. Business/Investor/Creditor Uncertainty Will I be able to get my money back? Business Idea/Plan Uncertainty Business Sustainability Uncertainty
- 14. How to Get Money Back for Funding Sustain • Revenue Sell • Proceeds from Sale Bankrupt • Proceeds of Asset Sales
- 18. Different Kinds & Qualities of Barriers
- 19. Competitive Advantages Regulatory Intellectual Property Common Kinds of Competitor Barriers
- 21. How Investors & Creditors Get Money Back for Funding Sustain • Revenue Sell • Proceeds from Sale Bankrupt • Proceeds of Asset Sales
- 22. Physical Assets for Startups
- 23. Asset Components of S&P 500 Market Value 0% 20% 40% 60% 80% 100% Intangible 17% 32% 68% 80% 80% Tangible 83% 68% 32% 20% 20% 1975 1985 1995 2005 2010 *Source: Ocean Tomo
- 24. Security Camera Security Guard Fence Forms of Intellectual Property Protection Alarm System
- 25. Forms of Intellectual Property Protection Security Camera Security Guard Fence Alarm System
- 26. Different Types of Intellectual Property Rights
- 27. Different Types of Intellectual Property Rights
- 28. Sustaining- IP Strengths & Weaknesses Intellectual Property (IP) Protection is not Perfect. Always Substitutes. Different Markets/Industries Require Different IP Strategies. IP Strategies Changes Over Time. IP is Worth Nothing Unless a Business (maybe not your business) Makes Money on What it Covers.
- 29. Sustaining- IP Strengths & Weaknesses Expensive Process to Obtain & Limited Time for Protection. Scope of Protection can be Broad and Immediate Once Patent is Granted. Never as Broad as You Initially Think. Better Suited Where Patented Improvement is Far Superior to Existing Substitutes (Objective) Pharmaceuticals, semiconductors…
- 30. Sustaining- IP Strengths & Weaknesses Inexpensive to Register & Can Almost Last Forever. Actual Value Slowly Develops Over Time. Impacted by Consumer Experience with Goods or Services. Shows Strength in More Mature Industries Where Consumer Choices are More Subjective. Restaurants, consumer goods…
- 31. Sustaining- IP Strengths & Weaknesses International Protection Immediate with Little Expense & Lasts a Long Time. Scope of Protection Somewhat Limited to Exact (or nearly) exact copies. Can’t Protect Against Non-Copyists. Best Suited Where the Exact Subjective or Functional Experience Matters. Software, entertainment…
- 32. Sustaining- IP Strengths & Weaknesses Legal Costs are Inexpensive, but Cost of Keeping the Secret are Not & Can Last Almost Forever. Trade Secrets can be Valuable. Most Companies Have Some Form of Trade Secrets Financial/pricing information, customer lists…
- 33. Sustaining- Generating Revenue Intellectual Property can be A Source of Revenue A Valuable Asset Important to Sustain a Business Important to Exit Strategy
- 34. Generating Revenue with Intellectual Property
- 35. Generating Revenue with Intellectual Property
- 36. Generating Revenue with Intellectual Property
- 37. Example Yum! Brands, Inc. Yum! Owned Franchisee Operated
- 38. Generating Revenue with Intellectual Property
- 39. Generating Revenue with Intellectual Property
- 40. ARM Holdings plc Example- Semiconductors
- 41. Example- Intellectual Property Financing • Accounts Receivable • Inventory • Assets
- 42. Example- Intellectual Property Financing • Accounts Receivable • Inventory • Assets
- 43. Example- Intellectual Property Financing • Accounts Receivable • Inventory • Assets
- 44. Example- Intellectual Property Financing • Accounts Receivable • Inventory • Assets
- 45. General Best Practices- Intellectual Property Owner/Officer Employee 3rd Party Supplier
- 46. Intellectual Property- Due Diligence Checklist All of the intellectual property identified- anything missing? Does the business still own the intellectual property? Has any of the intellectual property been abandoned? Any legal defects in the intellectual property? Any potential lawsuits related to the intellectual property?
- 47. Specific Industry Recommendations LifesciencesSoftware Industrial/Mfg.
- 48. Software & Computer Technology • Establish Ownership Through Employee & Consultant Agreements • Do not Just Rely on Work for Hire Doctrine • Don’t Create Copyright Infringement Time Bomb • Understand Limits of Licenses for Underlying Tools
- 49. Software & Computer Technology • Register Domain Names & Social Media Accounts • Make Sure You Have Them • Conduct Trademark Search • Reduce lawsuit risk • Register Marks • Get Rid of Cyber squatters • Consider Future/Large International Markets
- 50. Software & Computer Technology • Consider Industrial Design Protection for the Look of the Interface • Inexpensive Way to Protect the Decorative Aspects of Your Interface • Consider Filing a Utility Patent for New Technical Functional Features • In most countries, patent protection is only available for technology that improves computer function
- 51. Software Example Agreements Ensure IP Ownership Develop Software (Copyrights) Brand Clearance & Reservation (Trademarks) Leverage Brand into Future Products
- 52. Toys Agreements Ensure IP Ownership Develop Software (Copyrights) Brand Clearance & Reservation (Trademarks) Leverage Brand into Future Products Software Example- Extreme Television Movie Other Apps Theme Park
- 53. Lifesciences • Establish Ownership Through Employee & Consultant Agreements • File Patent Applications • Why • Market- Protect Market Share • Revenue- Licensing Revenue • Defense- Make Competitors Think Twice Before Suing • Exit Strategy- Enhance Value for Sale
- 54. Lifesciences • Identify Key Secrets • Confidentiality Agreements • Establish Procedures • Document Retention Policy • Own Computers • Why? • Key Information about Business Could Walk out the Door • Some Countries Provide Data Exclusivity as to Trials Data
- 55. Lifesciences • Conduct Search of Potential Marks Before Adopting • Prevent Investing Large Amounts of Marketing Money in Mark that Can’t Use • Special Issues for Regulatory Approval • Register Internationally • Lifesciences products have large markets/applicability
- 56. Industrial/Manufacturing • Patents, Trademarks, & Trade Secrets are all important Relative importance depends on industry • Consumer facing- trademarks • Commercial Supplier- patents • Use a Layered IP approach
- 57. Develop Technology Keep Key Processes a Trade Secret Patent Consumer Facing Technology Register Trademarks in Key Marks Leverage Trademark into Other Products Industrial Manufacturing Example
- 58. Intellectual Property Used in All Business Stages Idea Plan Fund Execute/Prove Grow/Sustain
- 59. Contact Information Chuck Schmal ([email protected]) Woodard, Emhardt, Moriarty, McNett & Henry LLP 111 Monument Circle, Suite 3700 Indianapolis, IN 46204 (317) 634-3456 www.uspatent.com
- 60. Value of Intellectual Property From a Business Perspective Protecting your Business’s Most Valuable Asset