SMEInnov8Gate. The Art of IP Valuation – A question of ... · PDF fileseminar on...
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SMEInnov8Gate®
The Art of IP Valuation – A question of time and context
Seminario internacionalsobre valorización de tecnologías
21st June 2011
Brian More
Director IP Services
Coventry University Enterprise Ltd
Sustainable environments for a global, knowledge based economy
International seminaron valorization of technologies
Agenda
1. Background
2. SMEInnov8Gate®
o Objectives
o Toolso Tools
3. Future roll out of the tools
Background
Established 1989; Technology Park since 1998; IRC since 1995; Knowledge based business support services:Pre-incubation, incubation (BIC), innovation, metrology...knowledge base international business; exploitation of IP
transnationally (EEN), Internationally (China, India, Brazil...)Institute of Applied Entrepreneurship.Institute of Applied Entrepreneurship.
2004 - Intellectual Asset Management - IP Major Problem3 different software tools for new product assessment
o COAP – 10 point university schemeo RIB-IT 5 point NASA toolo Synnova® 1,000 of questions from Defence Diversification
Agency
SMEInnov8Gate®
o Open innovationo Large company formal commercial product developmento New product introduction (NPI) methods e.g. gating
The Development, validation, testing and dissemination of a professional and sustainable SME TTT Stage Gate methodology to produce profitable
innovation collaborations with large companies and RTDs
o New product introduction (NPI) methods e.g. gating processes
o Translate tools for SME useo Test in four sectors
Unioncamere Piemonte - ALPS IRCAutomotive & Transport
Coventry University Enterprises Limited – Midlands IRCICT & Health
SMEInnov8Gate®
Latvijas Tehnoloăiskais Centrs- IRC LatviaAgro Food
METU Technopolis – IRC AnatoliaSecurity & Defence
SMEInnov8Gate® - Resource Allocation
Model of generic StageGate® process used by
large companies
Specification
Concept Development
Gate 1
Gate 2
Customer Needs
IP Assessment
ROI
Customer Needs
IP Assessment
ROI
FACI
Validated SMEInnov8Gate® Stage Gate
Methodology
Prototype
Detail
Launch
Gate 3
Gate 4
ROI
Customer Needs
IP Assessment
ROI
Customer Needs
IP Assessment
ROI
ILITATOR
SME NPD ProcessInnov8Gate Tools SME-Innov8Gates
Gate Team
Useful tools 1. The Commercial Opportunities Appraisal Process
A. Uniqueness of the technology, IP Protection
B. Readiness of the technology for market entry
C. Value of the Accessible Market (VAM)
D. Anticipated profit margins (if considering a license, score on the anticipated royalty rate)
E. Intensity of Competition in the Market
F. Competitive Edge of your product or serviceF. Competitive Edge of your product or service
G. Ease of access to the Market
H. Customer conservatism
I. Commitment of the team
J. Commercial experience of the team
EachEach point is scored 1point is scored 1--10 10
Resulting 0-100
Useful tools 1. C.O.A.P. NPD Weighting Factors
A. Uniqueness of the technology, IP Protection 0.12
B. Readiness of the technology for market entry 0.08
C. Value of the Accessible Market (VAM) 0.20
D. Anticipated profit margins 0.12
E. Intensity of Competition in the Market 0.09
F. Competitive Edge of your product or service 0.14
G. Ease of access to the Market 0.06
H. Customer conservatism 0.05
I. Commitment of the team 0.07
J. Commercial experience of the team 0.07
Σ weighting factors = 1.00 Σ weighting factors = 1.00
Resulting ΣΣ 0-10
SMEInnov8gate® Tools
IP ToolIP Tool
Profits ToolProfits Tool
Technology issues (state of readiness,
IP protection, USP) Customer issues
(Acceptance, requirements and focus)
Market issues (accessible market volume,
route to market)
Standard financial metrics to track
project progress and anticipated profit Profits ToolProfits Tool
Customer ToolCustomer Tool
project progress and anticipated profit
margins, Return on Investment, Internal
Rate of Return, Breakeven
Listening carefully
Understanding fully
Delivering exactly
Useful ToolsUseful Tools 2.2. IP Health CheckIP Health Check
Identification of all IP assets that are subject matter in a transaction
Confirmation of IP status, in force or pending, registered or unregistered
Examine scope of IP rights to ensure that they cover what the company wants to commercialise
Verify the validity of the IP assets to determine whether they can be upheld under attackunder attack
Check for the existence of any litigation involving the rights
Identification of licences under the rights, or restrictions, impacting on IP value
Identification of any third party right which may prevent commercialisation
Useful Tools 2.Useful Tools 2. Profit ToolsProfit Tools
Standard financial metrics to track project financial progress and anticipated profit margins
o Return on Investment
o Internal Rate of Return
o Breakeveno Breakeven
o Net Present Value
o IP Value
Valuing IP – similar process to valuing any asset
• Open market value
Determine basis/context of
valuationSelect and apply
appropriate valuation methodologies• Copyright
• Database
• Trade mark /
Identify asset(s) / understand rights
• Calculate the incremental
• Value in use
• Fair value
• Liquidation value
• Book value
• Trade mark / passing off
• Patent
• Know-how / trade-secrets
• Design right
Calculate the incremental
value added by the IP
Slide credit: LECG Ltd, London
Income Approach – Factors
Influencing the Discount Rate
NPV = PV / (1 + r)n
Risk PremiumLost Interest
Where n is the year of the cash flowr is the discount factor expressed as a decimal
Discount
Rate
Inflation
Income Approach - Risks
• Technology Risk• Market risk• Specific industry risks
Appropriate discount rates are calculated using– CAPM (capital asset pricing model)– CAPM (capital asset pricing model)– WACC (weighted average cost of capital)
We can estimate the discount factor at each gate of theprocess to indicate the increasing IP value prior toproduct launch
Useful Tools 4. Voice of the Customer (VoC)
The "voice of the customer" is a process used to capture the
requirements/feedback from the customer (internal or external) to provide
the customers with the best in class service/product quality. This process is all
about being proactive and constantly innovative to capture the changing
requirements of the customers with time.
The "voice of the customer" is the term used to describe the stated and un-
stated needs or requirements of the customer. The voice of the customer can stated needs or requirements of the customer. The voice of the customer can
be captured in a variety of ways: Direct discussion or interviews, surveys,
focus groups, customer specifications, observation, warranty data, field
reports, complaint logs, etc.
This data is used to identify the quality attributes needed for a supplied
component or material to incorporate in the process or product. Definition from the iSix Sigma website
Future roll out of integrated toolkit
Currently all the software is available as separate Excel
Spread Sheets.
Use of Microsoft Gold partners using Microsoft Technologies:
oSharePointoSilverlightoWPFoWPF
Will integrate the suite of programs into a Professional
Quality Product for FNL (Floating Network Licences) to all
EEN centres
Will integrate the suite of programs into a Professional
Quality Product for multi platform, multi level use:
oCrystal Mark documentation
oEasy to understand and clear instructions to followoPC, Laptop, 4G Phones, Apple Devices, Blackberry
Commercial Industry
Future roll out of integrated toolkit
Commercial Industry
Appraisal
Voice of the
Customer
Financial Analysis -
Investor and Project
Data
Technology and
Resources Gap
Analysis
SMEInnov8gate Home Page
SMEInnov8gate methodology Web Page
SMEInnov8gate Training Web Page
SMEInnov8gate CIA Assessment Report
Sustainable environments for a global, knowledge based economy
Dr Brian MoreCoventry University Enterprises Ltd
Email: [email protected]