Inclusion into the IAM Strategy 300 list for 2015

Strategy 300_Individual 2015Surprised and humbled – for the 2nd year in a row I have been listed in the 2015 edition of the IAM Strategy 300, which was published  last month.

I am particularly thankful to my peers for nominating me for inclusion in this years list.   When I started investing in my IP education 16 years ago, seemingly “before it was cool”, I did it because I was passionate about the topic, getting insight from every piece of literature I could.  As a result of my efforts, I’m now humbled to be listed along side world class IP lawyers and consultants, as well as IP heads from companies like Google, Amazon, Ford Motors, Nike, and Coca-Cola.  I’ve come far, but still have a long way to go!

My congratulations to all those that are on the list in 2015.

About the IAM Strategists 300: Over the course of several months, IAM researchers spoke to a wide range of leading IP professionals in order to identify people considered to be world-class IP strategists: men and women whose business is the creation, development and deployment of strategies that enable IP rights owners to gain maximum value from their portfolios. Only those individuals considered and nominated by their peers to be outstanding IP strategists are listed in the IAM Strategy 300. The IAM Strategy 300 is available in printed format and online at www.iam-magazine.com/strategy300.

IP structure: Are you building or killing your (tax) position?

This month I attended a PwC talk on the Global Tax Environment, where the IP issues around transfer tax were presented. The presenter, Elisabeth Finch, citing a Globe & Mail article “Global watchdogs take on the corporate tax dodgers” from September 2014, brought Tax and IP to life for the business ventures in the room by giving a tangible example on how transfer pricing and IP can impact a Canadian company:

“For example, let’s say a Canadian subsidiary of a foreign company sells widgets in Canada that it imports from its parent. And let’s say the patent for those widgets is held in a corporate affiliate in an offshore tax haven. The multinational tells the Canada Revenue Agency that its Canadian subsidiary had to pay a large licensing fee for the use of the patent. By making the fee as high as possible, that transfers money out of the Canadian subsidiary and into the affiliate in the tax haven. The result of this type of aggressive “transfer pricing” is less profit in Canada for CRA to tax. The OECD has proposed allowing tax authorities to take “special measures” to go beyond the “arm’s-length principle” and disallow tax benefits won with abuses of this kind.”

It brings light to an important point for small and growing companies – setting up the right infrastructure for IP, which includes planning for future IP tax positions, can avoid or mitigate some of the problems the widget company will experience as they grow.

But it’s not just hardware widget companies that need to consider this.  PwC recently released an article entitled “3D printing: Potential tax issues facing industrial products companies”  Technologies like 3D printing will have significant impacts on industrial products companies from a tax perspective – such as companies using 3D printing to reduce or shift how inventories are managed (print on demand), or how digital design are transferred or licensed to customers. This is a good example of how the IP and tax positions should be reviewed for many internationally growing ventures.

BUT….
Considering and finding the best tax position by planning of intangibles should be a factor in an IP strategy –  there is a larger issue that tax shifts need to consider – the patent litigation defense.

In general transfer prices include IP license fees, and business structure must be setup to keep (as much as possible) the profits in the best jurisdiction. However, this type of pricing arrangement has potential to cause issues when enforcement of IP comes into play, specifically for patents.  Andrew Blair-Stanek, via Dennis Crouch’s Patently Obvious, wrote about this issue earlier on in 2015 in an article titled “Transfer Prices Are an Evidentiary Gold Mine for Patent Defendants.”  He confirms the point, that transfer prices set low for tax purposes could potentially impact lower future damages, or even go as far as help defendants fight injunctions. How can irreparable injury be shown if the transfer cost of IP was quantified at a low number?  A great question.

Using IP to add bottom line value to your venture requires a view on the tax implications as well.

In sum: IP strategy is more than just filing patents in the right jurisdictions. It is more than business-useful claims. It is about positioning and integrating the IP in the business strategy and because the tax issues around IP are complex they need to be structured appropriately as a critical part of the business. This means structured both from the best tax/finance position, but also from future enforcement positions.

As a company plans to grow the longer term use of the IP – both how, when, and where it is projected to be used – need to be discussed by the team.  It requires three minds to successfully create valuable IP: Business, Technical, and Legal.  As part of the business team, the tax structure is a critical part of the success story.

Blue Ocean (Patent) Thinking – Generating IP opportunities for new markets

Building a portfolio in the present that has strategic value in the future is a challenge – but one that patent owners must confront head-on in order to secure the future of their businesses.

I recently authored an article in the last March/April 2015 issue of IAM Magazine, entitled “Blue Ocean Thinking”.  I looked at the way many ventures types (Fortune 500, Startups, NPE’s, and VC’s) can hunt for new market opportunities using IP as a strategic pillar, and used the Smart Grid market as a case study on how firms can be successful.

The view is that patent based opportunities exist – either via monetization or by protection of new markets by operating entities,  by the looking at where markets are moving that require older “infrastructural” based technology.  In the case study I outline  Smart Meter markets leaders who have IP that supports the technical infrastructure will be required by new Smart Home markets.

The difference in the “new” markets are staggering: Smart Meters are estimated to be a $22B market by 2020, but Smart Homes and Demand Response will be well over $100B.

Blue Ocean Patent Strategy New Market Creation

At the close of the article I outlined the key strategies of ventures as they pursue the of blue ocean intellectual property, and an Action Plan for companies to consider.

Blue Ocean Patent Strategy Action Plan

This type of approach is possible for all types of ventures – Fortune 500, Inc 500, investors and PAEs – because they all have access to the same market data and patent information.  The key success factor for all the ventures is building a visionary team that can connect the older technology platforms between patent and new market opportunities and pair them with an operating team that can execute the opportunity. Those that can do this will be the ones to capitalise and monetise the new blue ocean markets.

The article is quite lengthy (but worth the read!), and is available here for download.

Executing IP Strategy in High-Growth Markets (Part 2)

Earlier today Archimedes IP  published part two of my article on IP Strategies for high-growth markets, which I based around Nest Labs as a case study.  Below is the introduction, with the full article posted on the Archimedes IP Forum Blog. My thanks to Tom Ewing for both editing my draft, and contributing to the final copy.

Why High Growth Markets need an Evolution in IP Strategies (Part 2):

High Growth Patent StrategiesIntellectual property sometimes needs to grow faster than a company’s organic IP creation efforts.  Attempts to fix strategic intellectual property gaps have already cost Facebook more than $550 Million.  A similar fix cost Twitter $36 Million.

By contrast Nest Lab’s sale to Google for $3.2B had analysts commenting about the positive win on IP for Google.

Why is this?

For ventures with high-growth aspirations, our earlier case study of Nest Labs illustrates why patent strategy needs to shift quickly in new, high-growth markets. While Nest Labs acts as an outlier because several high-profile challenges occurred with respect to IP in the Smart Home industry, it still provides some key learnings for other ventures to consider planning towards as they grow.

Continue reading …

IP Strategy & Licencing – Impacts on the Canadian Manufacturers & Exporters

IP is on the mind for growing manufacturers and exporters in Canada – This week I spoke at the CME-STEP Export Insight series where I focused IAM and IP Monetization.

The Canadian Manufacturers & Exporters (CME) and the Saskatchewan Trade & Export Partnership (STEP), in collaboration with HSBC Bank Canada, brings together senior business leaders from throughout the province for intimate, high-impact, and executive-level discussions, aimed at providing the knowledge necessary to compete and win in global markets.

The CME-STEP leadership had identified IAM as a critical topic for membership and had asked me to speak on the IP strategy based steps a company needs to have as a foundation for successful and applicable patents in a license program.

My thanks to HSBC for sponsoring the event, as well as CME, STEP, and their membership for inviting me to speak.

I have posted the slides below: Continue reading