Ian P. Hartwell PhD EPA CEng

Honorary Research FellowEngineering Intellectual Property Research UnitSchool of EngineeringCranfield UniversityUnited Kingdom

Strategic Use of Intellectual Propertyfor Business Growth and Financing “the strategic role IP

can play in acquiring finance for SMEs”

© IP Hartwell 2010

What is “strategic” use of IP ?

“Managers of IP-related innovative businesses may view their business as … focused on one self-sufficient business model which, if successful, results in exceptional profits, but otherwise is worth little or nothing”

Report “Intellectual Property Enforcement in Smaller UK Firms”

UK Strategic Advisory Board for Intellectual Property Policy, October 2010

Strategic Use of Intellectual Property forBusiness Growth

© IP Hartwell 2010

What is “strategic” use of IP ?

“Venture capitalists may therefore be readier to see that extraction of value from innovation is …

… one which may have a variety of outcomes or solutions, some of which may be obvious, readily accessible and successful but others of which may not be so obvious, or accessible and may even be less profitable than initially hoped.”

Strategic Use of Intellectual Property forBusiness Growth

© IP Hartwell 2010

© IP Hartwell 2010

Strategic Use of Intellectual Property forBusiness Growth

SUPPRESSIP

MONOPOLISEIP

LICENSEIP

SELLIP

Manufacture

ContractManufacture

JointVenture

CrossLicence

ExclusiveLicence

Non-ExclusiveLicence

SoleLicence

Mutually-Assured Destruction

Securitize

Sale

Pooling Donate

A spectrum of IP business models

© IP Hartwell 2010

Strategic Use of Intellectual Property forBusiness Growth

More than one IP business model

SUPPRESSIP

MONOPOLISEIP

LICENSEIP

SELLIP

Manufacture

ContractManufacture

JointVenture

CrossLicence

ExclusiveLicence

Non-ExclusiveLicence

SoleLicence

Mutually-Assured Destruction

Securitize

Sale

Pooling Donate

© IP Hartwell 2010

Strategic Use of Intellectual Property forBusiness Growth

IP business models can evolve

SUPPRESSIP

MONOPOLISEIP

LICENSEIP

SELLIP

Manufacture

ContractManufacture

JointVenture

CrossLicence

ExclusiveLicence

Non-ExclusiveLicence

SoleLicence

Mutually-Assured Destruction

Securitize

Sale

Pooling Donate

© IP Hartwell 2010

Strategic Use of Intellectual Property forBusiness Growth

SUPPRESSIP

MONOPOLISEIP

LICENSEIP

SELLIP

Manufacture

ContractManufacture

JointVenture

CrossLicence

ExclusiveLicence

Non-ExclusiveLicence

SoleLicence

Mutually-Assured Destruction

Securitize

Sale

Pooling Donate

Most obvious not necessarilythe most successful

… and structure the IP portfolio

accordingly

Illustration: Xaar plc

Analysed by Credit Suisse First Boston in 1999:

Report “Technology Licensing: Intellectual property rights and wrongs”

Credit Suisse First Boston (Europe) Ltd, October 1999

© IP Hartwell 2010

Strategic Use of Intellectual Property forBusiness Growth

“The company is both an IP licensing and a product sales company, active in the ink-jet printing device market. We believe there are significant growth opportunities for Xaar in the office equipment market and … the fragmented industrial printing sector”

© IP Hartwell 2010

Strategic Use of Intellectual Property forBusiness Growth

SUPPRESSIP

MONOPOLISEIP

LICENSEIP

SELLIP

Manufacture

ContractManufacture

JointVenture

CrossLicence

ExclusiveLicence

Non-ExclusiveLicence

SoleLicence

Mutually-Assured Destruction

Securitize

Sale

Pooling Donate

IP Business ModelXaar plc, 1999

© IP Hartwell 2010

Strategic Use of Intellectual Property forBusiness Growth IP Business Model

Cambridge Consultants, 1987

SUPPRESSIP

MONOPOLISEIP

LICENSEIP

SELLIP

Manufacture

ContractManufacture

JointVenture

CrossLicence

ExclusiveLicence

Non-ExclusiveLicence

SoleLicence

Mutually-Assured Destruction

Securitize

Sale

Pooling Donate

© IP Hartwell 2010

Strategic Use of Intellectual Property forBusiness Growth IP Business Model

Xaar Ltd, 1990

SUPPRESSIP

MONOPOLISEIP

LICENSEIP

SELLIP

Manufacture

ContractManufacture

JointVenture

CrossLicence

ExclusiveLicence

Non-ExclusiveLicence

SoleLicence

Mutually-Assured Destruction

Securitize

Sale

Pooling Donate

© IP Hartwell 2010

Strategic Use of Intellectual Property forBusiness Growth IP Business Model

Xaar plc (incl. XaarJet AB), 2000

SUPPRESSIP

MONOPOLISEIP

LICENSEIP

SELLIP

Manufacture

ContractManufacture

JointVenture

CrossLicence

ExclusiveLicence

Non-ExclusiveLicence

SoleLicence

Mutually-Assured Destruction

Securitize

Sale

Pooling Donate

£15m

£6m

© IP Hartwell 2010

Strategic Use of Intellectual Property forBusiness Growth IP Business Model

Xaar plc, 2007

SUPPRESSIP

MONOPOLISEIP

LICENSEIP

SELLIP

Manufacture

ContractManufacture

JointVenture

CrossLicence

ExclusiveLicence

Non-ExclusiveLicence

SoleLicence

Mutually-Assured Destruction

Securitize

Sale

Pooling Donate

£45m

£2m

© IP Hartwell 2010

Strategic Use of Intellectual Property forBusiness Growth IP Business Model

Xaar plc, 2009

SUPPRESSIP

MONOPOLISEIP

LICENSEIP

SELLIP

Manufacture

ContractManufacture

JointVenture

CrossLicence

ExclusiveLicence

Non-ExclusiveLicence

SoleLicence

Mutually-Assured Destruction

Securitize

Sale

Pooling Donate

£37m

£5m

Ian P. Hartwell PhD EPA CEng

Honorary Research FellowEngineering Intellectual Property Research UnitSchool of EngineeringCranfield UniversityUnited Kingdom

Strategic Use of Intellectual Propertyfor Business Growth and Financing

© IP Hartwell 2010

• Understand the different ways in which IP can be used

• Understand that multiple IP business models may be necessary (and that these may change)

• Structure the IP portfolio accordingly