© 2013 IPStrategy.ca Page 1
A Business Perspec9ve on IP Strategy
for Startups and Early Stage Companies
Peter Cowan, P.Eng, MBA. www.ipstrategy.ca
@noremacc
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Agenda Focus: Strategy in the Context of a Startup
• Lessons Learned • Ac9ons for Success
• Exits & Growth Plans • Investor Protec9on
• IP Toolkit • Innova9on Cycles • TALCs, MVPs and Pivots • Planning and Budgets • Filing Strategies • Quality vs. Quan9ty • SoRware Patents
• Business Posi9oning • Technology Mapping • Lean Startup Methodology
Business View
Opera9onal View
Ac9on Plans and Successes
Investor View
The HOW
The WHY
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Why do (smart) startups need an IP Strategy?
Business Posi*oning • Prepare for future
acquisi9on • Prepare for future defense • Prepare for hyper-‐growth • Business Partners &
Investors • You have to play the game
Poor Business Drivers • Enforcement & Cross
license plans • Compe9tor preven9on • Thinking ‘You have to play
the game’
Risk & ROI, for both short and long term, before a startup implements
the Strategy of Patent Filings.
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Why IP Strategy strengthens the Business Strategy
• Map business to technology – Validates whitespace tech analysis – Compe99ve monitoring & posi9on
• Lean Startup / Canvas interac9on – Ins9gates a Technology Pivot – Defines Unique Value Proposi9on & Unfair Advantage
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Investors & Exits
Exits, Growth Plans & Investor Considera*ons • “Just get something filed” • Early stage technical acquisi9on vs. SME acquisi9on stage • Technical Buyouts vs. market acquisi9ons • Investor Perspec9ves change at:
Startup à Small à Medium à Large à Mul9na9onal En9ty
When talking with investors, Infringement & Protec9on are not the same conversa9on
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IP Strategy Toolkit
Analy*cs & Analysis • Technology Landscaping • State of the Art searches • IP Landscape analysis • Compe99ve IP pormolio
analysis • Whitespace or Overlap
analysis
Internal Processes • Harves9ng à Evalua9on à
Filing – Idea Ranking & Priority – Review Comminees – IDF (Disclosure Forms) – Business / Strategy Valida9on
• HR, Culture & Climate
Analy*cs – Informa*on & Knowledge Process – Deliverables & Ac*ons
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Inside the Innova9on Cycle
In Prac*ce: Where IP integrates into the work cycle
Evalua9on & Design MVP / Launch
Team (People)
Technology Customers
Product Ideas
Pain Points
Market Needs
Deployment
Idea Capture
Validate the Idea: Novelty and Freedom to Operate
Posi9on in the market: Technology & IP Landscapes
Filing: DraRing & Filing 9ming Timing of Ac9on
s
Harvest: Idea review & Rank
Evaluate: IDF, Validate & Rank
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Filing Strategies
Filing Strategy Depends on Market: • Offensive
– Disrup9ve Technology – Early Adopter & Market Leadership – Founda9on IP
• Defensive – Pre-‐emp9ve destruc9on – Design Freedom
• Patent Trolls • Mul9na9onals vs. SME’s • The posi9on of Startups in the IP Value Herarchy
Visionary
Integrated
Profit Center
Cost Control
Defensive
For Further Reading:
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TALCs, MVPs and Pivot pimalls
Patent Scope & Timing of Filings:
• Early Market protec9on • Main Street coverage • Beachhead and Bowling Pins
• MVP: Bar Dates for release • MVP: MVP 2.0 coverage • Pivots: Timing and scope of filings, provisional filings
Risk & ROI again: Most startups have mul9ple pivots, and IP needs to adjust each 9me.
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Planning & Budgets
Basic Legal Budgets • Novelty Assessment or PA
searches: $1-‐2k • FTO: $2-‐5k • Invalidity / Validity: $5-‐8k • Provisional: $2-‐4k • Filings: $7-‐15k
Basic Business Budgets • Landscape: $5-‐10k • Analy9cs: $5-‐20k+ • IP Strategy: $10-‐20k • Drivers:
– Advisory Boards, Investors – CTO/CEO, etc.
IP Strategy for generally the cost of filing one patent
Rules of Thumb: Timeline: 3-‐4 months lead 9me People: 10-‐40 hours Budget: Y1 @ $10+k Y2-‐4 @ 4k/yr + global expansion
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Quan9ty vs. Quality
Relevant IP à Reducing the Patent Value Gap
Percent (%) of Patent Pormolio
Value of Paten
t Pormo
lio
5% 75% 100%
Leverage Protect Divest
Patent Strategy Focus
Patent Value
Gap
Single or Mined Product Ideas may fit here
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Quality Predictors
Filing Predictors of Value: • Provisional Filings • Family Size • Breadth across IPC classes • Claim Counts
Quality Thinking:
Idea aligned with business goals and technology direc9on
Legally Enforceable and Licensable
Economic Value
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SoRware Considera9ons
Do you really need IP @ the startup phase? • Resources & cost alloca9on in the overall business • Speed of product and market change • Speed of Lean Startup itera9ons vs. patent costs • Long game benefits • Pure soRware vs. integrated with technology
Not filing IP is a viable strategy if alternate planning is done
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Lessons Learned
• Growth: Facebook’s $500M pormolio acquisi9on • NDA’s: Techforward vs. BestBuy • Posi*oning: Datum Telegraphic & PMC-‐Sierra • Disrup*ve Technology: Honeywell vs. Nest • Essen*als: i4i vs. MicrosoR • Lost Opportunity: GoPro & sports cam industry
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