IP and the credit crunch: hot topics for the financial freeze

Here's a little list of hot topics that was put together by someone doing a little research into one of my favourite topics -- the impact of the current credit freeze on various aspects of IP. The list

1. Technology: Open Source reduce upfront costs; outsourcing creates savings -- so both those sectors should fair well in recession.

2. Intellectual property transactions: there will be a continued focus on IP liquidity, i.e. buying, selling, licensing and litigation of IP (in particular patent assets).

3. R&D: tax credits will make R&D attractive -- but will R&D budgets be cut? In many sectors, e.g. pharma, this may be the last thing to go, but might others look to reduce overheads by "pruning" their patent portfolio?

4. Venture capital: Many IP generative businesses depend on external finance and funding to bridge the time between creation and exploitation. The economic climate will restrict that funding and make it difficult for many of these young businesses to survive -- which will have a major impact on the innovation pipeline into the future.

5. Managing risk: everyone is looking to maximise the potential of what they have. For all IPRs (especially patents and brands) this commonly depends on a range of third party contracts, i.e. licences, franchise agreements, collaborations, sponsorships. All these agreements are scrutinised for issues such as royalties, change of control and insolvency. Those companies with robust agreements will be better placed to weather the storm.

If you'd like to comment on these, or add your own, please feel free to do so.

Copyright valuation -- any good reading materials?

I've received an email from a student who writes:

"I am currently doing an academic research on the subject of Intangible Assets Valuation. I could find a lot of information regarding this subject, but I barely found any information related to Copyright Valuation. The only article that I found was in Willamette website: http://www.intellectualpropertyanalysis.com/article3.html

Could you tell me if there is more bibliography on this particular subject? I would be very appreciative. Thank you in advance".

Can anyone assist? From the email I originally received, I suspect that English is not the student's first language. So if you know of good materials written other than English, please mention them too.

University technology -- sharing the rewards

Via the often-pertinent Tech Transfer E-News comes this little piece from The Star Press entitled "Ball State royalty-sharing policy proposal worries students".

Left: there is more than an academic interest in keeping an eye on the Ball ...

In relevant part, this article states:

"A proposed policy change at Ball State University has some students worried the university will take their hard-earned money if they develop a marketable product using Ball State resources. The proposed revision to the ... school's technology and intellectual property policy, which was presented to students and faculty after being developed by a university task force, increases Ball State's share if a student or faculty member who used university resources for a project sells a property to a commercial entity.

Existing policy gives the first $1,500 to the inventor or author, then all direct costs are recouped by the university. The remaining royalty revenue is then split 50/50 between the author or inventor and the university. Under the proposed revision, 10% of revenues would go directly to the TTO. Then 30% would go to the university, 30% to the author or inventor, and 30% to the department up to a $30,000 annual cap. The amount over $30,000 would go back to the university in support of the intellectual property.

The committee making the proposal says it would bring Ball State in line with a majority of U.S. universities. Nancy Carlson, chair of the policy committee, ... [said] "someday, something's going to strike it big," ... And if someone strikes it big after they've used thousands of dollars of university equipment and resources, a fair share of royalties should belong to the university. "You've got to plan for the big one that hasn't happened yet," she said".

On 19 March 2009 CLT is hoping to put together a one-day conference on IP and the educational sector. This sort of issue, and how it's handled/ignored in Europe, should feature somewhere on the programme which I'm helping CLT to develop. If you'd like to be kept informed about this, email me and let me know.

Forthcoming meeting: IP term

The IP Finance weblog is pleased to announce the next meeting of its readers and supporters. The subject is "IP term: what it means in finance terms", a discussion on the financial implications of the duration of intellectual property protection. Anna Feros (a senior associate at Shepherd & Wedderburn) will be speaking on patent term, while John Enser (partner, Olswang) will talk about copyright term.

Right: a wallclock -- the best way to enjoy the countdown to a competitor's patent expiry

As is traditional at these events -- which are free -- the speakers will not speak for too long and there will be excellent opportunities for networking.

The date: Tuesday 16 December
The time: 5pm till 6.30pm
The venue: Shepherd & Wedderburn's London office (address and directions here)
If you're planning on coming, email Anna Feros here so that we can all be forewarned.

Russia’s 40 most valuable brands

Familiar with companies like CTC or PIK?

If not yet, read up on them in Interbrand’s fourth annual ranking of the 40 most valuable Russian brands.

Interbrand, in cooperation with Kommersant DENGI magazine, looks behind the numbers, presenting the top 40 Russian brands of 2008 arranged by their brand value, the dollar value of a brand, calculated as Net Present Value (NPV) or today’s value of the earnings the brand is expected to generate in the future.

The telecom sector tops the ranking with Beeline and MTS. From a pure value point of view, Interbrand explain that these two companies would fit in the Best Global Brands around rank 50.

From the 40 brands featured, only six come from a pre-soviet era - with two prominent new entries in the automotive sector (LADA and KAMAZ).

The ranking can be accessed at the Interbrand website.

Funding patent litigation -- do ATE and TPF really work?

The November 2008 issue of Patent World, published ten times a year by Informa, features a piece entitled "Keeping Costs Low: how to hedge the risk of expensive litigation" by James Delany. James is a director of specialist brokers TheJudge, described in the journal as the largest independent litigation risk transfer broker in the UK. After reviewing the concepts of after-the-event insurance (now usually referred to as "ATE") and third party funding ("TPF") his article concludes:

"If a client has a good case there is a good chance that client can offset anywhere from 50-100% of the cost risk, typically at no upfront cost and at no cost if the case loses. Once that's the accepted principle an exploration of what is potentially available for that particular client can be made, taking into account the client's financial position and their appetite to take risk".

I'd very much like to receive comments from readers who have direct experience of ATE or TPF -- and I'd also like to know what happens when, in terms of risk assessment, the dispute coming up for litigation is a real 50-50% call. Do let me know, by posting a comment below or emailing me here.

Disney goes for the high end

Thank you, Miri Frankel (Beanstalk), for this link to this piece in the New York Times last week on leverage of the Disney brand in terms of product merchandising.

Right: some consumers may now find Disney products a little 'deer' as compared with their former pricing

Remarkably, while the most expensive piece of clothing sold by the Walt Disney Company six years ago was a US$75 sweatshirt embossed with a mug shot of Mickey Mouse, the company now sells US$3,900 designer wedding gowns — which do not portray any Disney characters — as well as US$2,800 leather club chairs and US$6,000 chandeliers patterned after the Art Deco décor in Walt Disney’s former office. It seems that Disney has become a "lifestyle brand".

The article sets out Disney's high-end game plan. It has been working with the likes of Paul Smith, Vivienne Tam and Dolce & Gabbana, who created a US$1,400 sequined Mickey Mouse T-shirt. It concludes:

Designers say they have been impressed with the willingness of the famously guarded company to take chances. Charlotte Tarantola, a Los Angeles designer, said she decided to do a limited collection based on “Snow White and the Seven Dwarfs” in part because Disney allowed her to explore “the darker, very adult side of the fairy tale.” As the proprietor of a small company, Ms. Tarantola was eager to piggyback on the Disney name. “Anyone who is alive today has been touched by Disney in some way. If becoming partners with them can help my business, far out.”

Although this form of leverage has worked on the Disney brand, it may be difficult for other children's entertainment-based brands to do likewise. The consistency and stability of Disney's branding, across fictional and real characters, film products and leisure complexes, together with its remarkable longevity, have created an asset that is deeply embedded in the consciousness of a generation of consumers who wish to relive pleasurable childhood experiences and who fear the consequences of age and responsibility. How many equivalent brands have the same effect?