valuaLlon of lnLellecLual properLy

21
sL
nov 2011
Anandh Sundar
SMl8 1erm v llMA 201112
Agenda
W WhaL ls l8? WhaL ls nC1 consldered l8?
W WhaL ls valuaLlon?
W ulfflculLles ln valuaLlon
W Speclal dlfflculLles ln valulng l8
W Some valuaLlon meLhods
W valulng Sun harma A8C
W 1he lndlan scenarlo
W Are we ln a Lechnology bubble?
W olnLs Lo ponder
l8whaL lL ls and ls nC1
W l8 ls an excluslve monopoly rlghL conferred
upon Lhe creaLor for a llmlLed Llme perlod
W lL ls a negaLlve rlghL Lo sLop oLhers from
commerclallzlng Lhe asseL
W lL does nC1 lnclude
All lnLanglble asseLsdlsLrlbuLlon relaLlonshlps
Puman lnLellecLual caplLal
ulfferenL Lypes of l8
vALuA1lCn Cl
l8
uLSlCn
A1Ln1
harma/8loLech
/Llfe Sclences
1echnology
aLenLs
CLhers
18AuLMA8k/Cl
18AuL SLC8L1
CC?8lCP1
lllms CLhers
Creen box reflecL Lhe areas where maxlmum LransacLlons/paLenL lnfrlngemenL sulLs
happen aLenL wars harma paLenLs and fllm flnanclng are examples
WhaL ls valuaLlon?
W ltlce ls wbot yoo lA voloe ls wbot yoo C1
W A cyolc koow tbe lklc of evetytbloq ooJ tbe
vAlu of ootbloq
1herefore we can measure whaL we pay buL
rarely can we measure whaL we geL
ulfflculLles ln valuaLlon
DIIIICUL1 LkAMLL
uCl ls noL unlversal SLarLups w/o revenues loss maklng Cos
collecLlbles
Always relaLlve and sub[ecLlve Poly Crall ls Lo have CnL prlcebuL LhaL
begs Lhe quesLlonagalnsL whaL?
8las ln valuaLlon uepends on who pays Lhe valuer!
non markeL LransacLlons Compulsory acqulslLlon debaLe
Speclal dlfflculLles ln valulng l8
W noL Lraded on exchange
W Always embedded ln producLs/processes
does noL lLself generaLe cash flows
W CreaLed by lawso sub[ecL Lo vagarles
W lew publlcly dlsclosed LransacLlons
W CosL dlfflculL Lo measure
llxed cosLs(llke 8esearch lnfrasLrucLure)
Sunk cosLs(Lrlals reporLs)
ConslderaLlons for valulng l8
W CannoL separaLe valuaLlon from Lhe resL of Lhe
llcenslng framework/agreemenLs
W More Lhe rlghLs/excluslvlLy hlgher ls Lhe fee
W l8 are usually compllmenLary asseLs(excepL
for copyrlghL where l8 lS Lhe maln asseL)
W orLfollo managemenL approach wlll work for
companles wlLh plenLy of paLenLs slnce LhaL
can explolL synergles moaL neLwork effecL
valulng 8rands/1rademark/Cl
W 1hey make Lhe goods dlsLlncL from oLhers
W 8aLlonale Lo pay for llcenslng Lhem ls Lhe
supernormal proflLs earned from LhaL
W Pence meLhods used ln pracLlce are
8ellef from royalLy meLhod
Supernormal proflLs earned by uCl meLhod
CopyrlghL valuaLlon
W rocess Lakes a long Llme from
producLlon/wrlLlng Llll commerclallzaLlon
W usually flxed fee + royalLy share(for books) or
else cosLsharlng(for fllms/muslc)
W 1lll recenLly LLA Cl lAl1P buL Lhe new M8A
culLure has lnformed markeL research Lo
esLlmaLe how lL would sell
valulng paLenLs
W Maxlmum LransacLlons happen here even
exceedlng copyrlghL
W MeLhods LhaL can be used are
uClcan be modlfled Lo lnclude real opLlons
8elaLlve valuaLlonmacroeconomlc facLors
MarkeL share approachwhlch Lrles Lo measure
Lhe lmpacL of Lhe paLenL on Lhe enLlre ecosysLem
1hls ls used by app developers
Cwnershlp changes wlLh
mllesLone paymenLs
nllg 36 valuaLlon ln Llfe Sclences a racLlcal Culde
ueclslon 1ree/8eal CpLlons approach
1he nll experlence
W As menLloned by rof Anll CupLa ln class
W CosL of collecLlng royalLles are a loLespeclally
for non excluslve small paymenLs
W Also small lnvenLors/lndlvlduals are Lyplcally
rlsk averse and do noL have Lhe
Llme/lncllnaLlon/experLlse Lo go lnLo deLalled
uCl calculaLlons or opLlon prlclng
W 1helr rlsk averslon would prefer an upfronL
paymenL lnsLead of a paymenL sLream
Sun harma A8C100 l8 sLock
W locus on research and drug dlscovery
W Share prlce 8s 73 8ook value8s 027
W Spun off from Sun harma Lo allow lnvesLors
Lo Lake exposure dependlng on rlsk appeLlLe
000
2000
4000
6000
8000
10000
12000
14000
16000
07 08 09 10 11
neLworLh(8ase100)
MarkeL Cap(8ase100)
Cnly 1 of 6 lndlan owned paLenLs
ls acLually worked
0
10
20
30
40
30
60
00 01 02 03 04 03 06 07 08 09 10 11
Ind|an nd patnts |n fn
lndlan owned
paLenLs ln force
SourcehLLp//dlppnlcln/lpr
feedback/uLlllLy_Models_13May2011pdf(age 1316)
Are we ln a Lechnology bubble?
olnLs Lo ponder
W ls lacebook really worLh $30+bn?
W Apple ls more valuable Lhan Lxxon Mobll!
W CalculaLlng compulsory llcense fee
W CalculaLe damages/penalLles lf defendanL ls gullLy of
l8 vlolaLlon
W 8a[a[1vS sulLcalculaLlng losL proflLs
W norLel6000 paLenLs [ $43bn/MoLorola MoblllLy
$123bn deal/kodak valued aL $3bnpaLenLs sold for
ote tboo test of coooy! ls Lhls falr? 1hese can be
LhoughL of as a proLecLlve defense agalnsL paLenL
lnfrlngemenLs sulLs and paLenL Lrolls
8eferences
W valuaLlon ln Llfe SclencesA racLlcal Culde(3
rd
edlLlon)8orls 8ogdan/8alph vllllger
W CorporaLe valuaLlon Modelllnga sLep by sLep
Culde by kelLh Allman
W valulng Companles wlLh lnLanglble AsseLs
research by rof AshwaLh uamodaran
paper(hLLp//wwwsLernnyuedu/adamodar/
pdflles/papers/lnLanglblespdf)
Anandh nda
10anandhL
[llmahderneLln