Utilizing IP to Access Funding

Nutter McClennen & Fish LLP Seaport West 155 Seaport Boulevard Boston, Massachusetts 02210 Telephone 617.439.2000

www.nutter.com

TCN Expert Lunch: Maximizing Value Through IP

June18, 2013

Nutter McClennen & Fish LLP • www.nutter.com 2

IP Is A Potential Asset

• Knowledge & Understanding Needed to Realize Its True Potential

•  IP Has Many Uses – Build Value, Attract Investment, Protect Revenue Stream, Build Revenue Stream


PATENTS: WHAT THEY ARE AND WHAT THEY ARE NOT

• Right to exclude others • NOT a right to use your own patented

invention • A’s patented invention may be an

improvement that is dominated by B’s earlier patent • A’s use/sale of its own patented

invention may result in suit by B

Case Study #1

•  Start-Up With No IP Strategy

•  Single Patent Application for a Gen 1 Product

•  Narrow Claims

•  Failed to Keep Patent Family Alive


Case Study #1 (Continued)

•  Unprepared for Investor Due Diligence • Couldn’t articulate patent strategy

•  Freedom-to-Operate Issues Uncovered • Reactive (Not Proactive) vis-à-vis Third Party Patents

•  Result: No Funding Nutter McClennen & Fish LLP • www.nutter.com 5

Case Study #2

•  Second Patent Application for Gen 2 • Broader Disclosure

•  Goal: Raise money to Develop and Market Product

•  Relying on IP to Build Value – attract investment, achieve exclusivity

•  Learned that IP Needs Focus Nutter McClennen & Fish LLP • www.nutter.com 6

Case Study #2 (Continued)

•  Intense Due Diligence • Gained Understanding of Marketplace • Increased Knowledge of Patent Process, Prior Art, and Use of Claim Strategies • Able to Articulate Expected Patent Coverage

•  FTO Looked Clean • Aware of Relevant 3d party Patents and able to Explain Path to Market

•  Result: Successful Fundraising Nutter McClennen & Fish LLP • www.nutter.com 7

Surprise!

•  Product Fails

•  Original Strategy of Successful Product Marketing is Untenable

•  All Investment at Risk


New Strategy

•  Monetize the IP Portfolio

•  IP Portfolio Comprises Multiple Patents • Claims Specific to Intended Product • Broader Claims • Applications Still Pending


Executing The New Strategy

•  Aware of Competitor’s Proposed Product Launch • Market Knowledge Pays Off!

•  Build Case for Patent Infringement

•  File Continuation With Claims Targeting Competitor's Product • Adds Another Picket to the Fence


Success!

•  Aggressively Approach Competitor

•  Explain and Demonstrate Infringement

•  Result: Sale of Company Assets for Good ROI, without Litigation


Takeaways

•  Initial Lack of (or Poor) Strategy Created Risk, Facilitated Failure • Don’t Rely on a Single Application

•  Increased Sophistication Enabled Aggressive IP Portfolio Development

•  Knowledge of Competition Created Opportunity

•  Flexibility & Focus Enabled Success Nutter McClennen & Fish LLP • www.nutter.com 12


What Is An IP Strategy?

An IP Strategy is the playbook that describes how intellectual property will support the business

The IP Strategy Should Identify: •  Offensive uses of IP – How will you create barriers to

entry that keep competitors behind you •  Defensive uses of IP – How will you keep control of

the important aspects of your business •  IP liabilities – How will you avoid the potholes


Why Do You Need An IP Strategy?

•  Align IP with Business Goals •  Competitive Advantage •  Attract Funding •  Revenue Source


How Do You Develop an IP Strategy?

  Identify Business and Technology Goals

  Evaluate Your Existing IP Portfolio

  Know the Competition

  Strengthen Your IP Portfolio

  Track Your IP Portfolio


Identify Goals

•  Identify both business and technology goals for company

•  Identify key players (competitors, partners, customers)

•  Identify technology direction (within company and industry)

•  Determine offensive goals (asserting IP against others; revenue generation), defensive goals (using IP as a shield), and market purpose (e.g., to demonstrate company innovation, gain funding, etc.)

•  Align the goals, industry and technology information, and portfolio use goals.


Evaluate Your IP Portfolio

Review patent portfolio (asset/liability approach)

  Inventory IP Assets

•  Identify them – What are they?

•  What do they cover? Do they support the story?

•  Does the company have clear title to them? – If not, they can go from Assets to Liabilities.

  Inventors IP Liabilities

•  Third party rights that you might not be aware of

•  Third party rights you might be aware of


Evaluate Your IP Portfolio (cont.)

Assess Freedom to Operate:

  Conduct regular searches

  Review all Prior Art

  Identify potential problems

  Review and assess validity


Strengthen Your IP Portfolio

  Multiple Patents: don’t rely on a single patent

  Multiple Claim Types: cover paper, bench top, and commercial embodiments, as well as methods of manufacturing and methods of using

  Keep patent families alive

  Cover competitor products/systems

  Cover Any Design Arounds

  Consider foreign protection

  Consider other forms of IP (trademarks, trade secrets, copyright, agreements)


Track Your IP Portfolio Over Time

Regularly Update and Check Your Progress Against Your IP Plan

  One good way is an IP Review Committee •  Meet regularly, once a month to once a quarter

•  Review business model – any changes? New products?

•  Push contributors for Invention Disclosures for key new technologies/product differentiators

•  Select which invention disclosures warrant, from IP and budget perspectives, patent application filings and which should remain secret

•  Track competitors – any new products? Patents?

•  Identify Licensing or Partner/Consultant issues

•  Include Marking/Sales as well as CTO/Engineering Committee

IP Strategy: Track Your Portfolio

Regularly Update and Check Your Progress Against Your IP Plan •  Make sure your plan stays up to date

•  Is your business model changing?

•  Does your product roadmap have a new turn?

•  Are you achieving your goals?

•  Are you generating the data you need to create the right IP assets?

•  Are your patent applications progressing?

•  Has the PTO put a crimp in your plans?



THANK YOU

Documents

Utilizing IP to Access Funding