Section

  • Introduction to the course

    Identifying how value can be extracted looking at different functional models ranging from blocking competitors by securing markets to actively harvesting royalties. How are IP values (individual and portfolios) calculated? This series provides an overview of the basic IP value extraction mechanisms and how they can be implemented through licensing and enforcement actions. Determining the value of IP is an essential component.  

    In this course, you find three modules comprising each readings explaining the content, a recorded lecture and a quiz. There is also an additional module which does not include a quiz. In the last chapter, you find further ressources complementing the training.

    You will have the possibility of obtaining a certificate, after having passed the quizzes with a total rate of at least 70%. You can repeat the quizzes as often as you want.

    If you want to take a quiz, you need to you register in the European Patent Academy’s e-learning centre with your account and enrol to this course.

    Please also read the curriculum of the whole series.

    • IP value extraction

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      Main purposes of this module:

      • to describe different models used to extract commercial value for the owner, including single or combined IP-Rights (IPRs) 
      • to explain different patenting strategies
      • to explain the importance of IPRs for start-ups 
      • to introduce the notion of new IP business models relying solely on intangible IP assets as products

      The topics covered in this module:

      i.    IP supported exclusivity 
      ii.   Additional income generation 
      iii.  Gaining technology access
      iv.  Fund raising and reputation
      v.   IP based business models 

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      Patents, together with other IP (designs, trade-marks, etc.) are used to enforce premium prices by blocking competitors from a given product space/feature and allowing certain types of effective monopolistic behaviour. This is enforceable by using preliminary injunctions, injunctions and cross-border injunctions and may bring potential secondary/compensating income, called  "damages".

      In addition, by out-licensing their technology to others (for production or sales), companies can overcome limits to growth. 

      In electronics/semiconductors, where no one can fully own the technology space, mass cross-licensing programmes are common and companies seek to leverage their knowledge and assets (tangible and intangible) via various forms of collaboration

      Furthermore, IP is increasingly used as the core basis of carve-outs/spin-offs and in the creation of new companies from scratch.

      Both CEOs and IP managers must be aware of the dynamic, evolutionary/revolutionary and interactive nature of law and the market to better understand opportunities and risks for their firm/clients. Increasingly IP-only companies base their business model on licensing (PAEs, NPEs, brokers, auctions). Market developments have triggered changes in IP law and vice versa. Thus vigilance and openness to new business models are necessary. 

    • Licensing I

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      Main purposes of this module:

      • to explain what licensing is, the different types and the structure of a licensing agreement 
      • to provide guidance on negotiation tactics, in particular on the subject of licensing fees or royalty schemes 

      Topics to be covered:

      i.    Types of license and structure
      ii.   What to whom and where? 
      iii.  The role of know-how in licensing 
      iv.  Negotiating and appropriate licensing fee and / or royalty scheme 
      v.   License of rights and cross-border licensing agreements

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      A review of the basic types of licence (sole, (non-)exclusive, cross-licence) and associated terminology is given as well as an outline of the structure and content of a licensing agreement. 

      A company should consider why it wishes to grant or receive licences. An IP owner has to identify what IP it wishes to license in or license out against the business landscape of itself, its competitors and collaborators and it has to do so both statically and dynamically as situations or markets evolve.. 

      Licences cover the formal codified IP rights such as patents, trade-marks or copyright. In addition, critical parts of a product/technology can be covered by trade secrets/know-how.

      The negotiating terms depend on the knowledge and level of sophistication of the parties.

      Finally, some further issues are touched upon (loss of rights, "licence of rights" (LoR)).

    • Determining the value of IP

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      Main purposes of this module:

      • to introduce the various types of assets and their relative importance across industries, with a focus on the value of European patents 
      • to discuss the main valuation methods in patent evaluation (cost-, market-, income-based) 
      • to highlight some further patent valuation methods based on rating tools 
      • to provide guidance on selecting the most relevant valuation method

      Topics to be covered:

      i.    Different types of assets, value
      ii.   Main valuation methods  

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      The relevance of intangible assets in company valuation has increased progressively over the years. Patents play a particular role in this, especially in the case of M&A.

      Three main methods for valuing IP assets are explored: cost-, market- and income-based, depending on the time perspective. The income-based method is elaborated upon in more depth, using the discounted cash flow (DCF) valuation method. In addition, an overview is provided of some alternative valuation tools, based on patent rating. To round up, some guidance is given on how to choose the most appropriate valuation method.  

    • Additional module: Licensing II and enforcement

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      Main purpose of this module:

      • Continuing from the Licensing I module, the discussion moves on to the effect of externalities (anti-competition law) and counterparty characteristics to be considered (covenants not to sue) in drawing up licences. A review is then made of enforcing IP and agreements starting with a brief statistical overview followed by the distinction between civil and criminal actions, and how to keep infringing products from physically entering your market from abroad. The possible litigation proceedings and proof mechanisms available should this be unsuccessful are then discussed. The course also considers some common approaches for defending against litigation proceedings, leading into a discussion of how cases are resolved.

      Topics to be covered:

      i.    Anti-competitive constraints for licence agreements 
      ii.   Convenant not to sue agreements 
      iii.  Statistics, civil vs. criminal, border seizure
      iv.  Infringement proceedings
      v.   Proving infringement 
      vi.  Defense mechanisms 
      vii. How patent cases are resolved

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      Generally licences are conditional. The licensee may not challenge the validity of the patents it has licensed. Since patent law technically provides a patent holder simply with the right to sue someone else who is infringing their patent, a patent licence can be considered a type of covenant not to sue. 

      Infringement may be regarded in various degrees of seriousness, e.g. wilful infringement (treble damages in the US) or even as a criminal offence (e.g. in Japan).

      Alternatively, judicial actions may focus on keeping the alleged infringing product outside the jurisdictional borders – ITC in the US, EU equivalent.

      Some basic aspects of infringement proceedings in various jurisdictions are reviewed. Furthermore, some well-known defence mechanisms, efficient strategies and means of resolving disputes are summarised.