Getting Your Intellectual Property Investor Ready A Presentation to TTI2001 – 27 September 2001 Malcolm McBratney, Partner – Technology Group

Outline Investor Readiness Introduction to IP IP Investor Readiness

The Business Growth Cycle Idea investor ready Once investor ready: Venture capital refinement of idea testing of idea, applications, certification if necessary Public offering (and listing) - realisation

Are you investor Ready? What is Investor Ready? Innovation secured - intellectual property Management competence and integrity Sound business plan Knowledge of market, good position Risk and returns accurately portrayed Ease of investor exit

Risks to Becoming Investor-Ready Risks to innovation becoming investor-ready Alternative innovative developments Poor licensing arrangements Over-estimation of market Ineffective management Lack of investor confidence

Summary - The 8Ps 1. P eople 2. P erseverance 3. P roduct 4. P atents 5. P rojections 6. P rospects (of commercialisation) 7.(Risk) Profile 8. P assion

What is intellectual property? Patents Designs Trade marks Copyright Trade secrets Databases

Patents Patents: Protect inventions Standard– 20 years Innovation – 8 years Monopoly right Country by country

Designs Designs: Protect features of shape and form 16 years Difficult to enforce

Trade marks Company names, brand names & logos A business name is not enough! Trade marks Look before you leap Domain name registration

Trade Marks (cont…) Two preconditions capacity to distinguish not deceptively similar Perpetual protection Renewal each 10 years Use as a trade mark Registration not mandatory

Trade Marks Trade Marks Act proprietary rights any sign: letter word name signature numeral device brand heading label ticket shape any aspect of packaging colour sound scent

Business Names Administrative No proprietary right Remove for non use Offence to not register Will look at similar names

Company Names Administrative No proprietary right No need to use Will not register exact company name but otherwise will No proprietary right

Domain Names

Copyright Protects literary and artistic works, sound, TV, radio, film, photos etc Protects expression, not ideas Generally lasts for the life of the author plus 50 years

Trade Secrets Trade Secrets: Must be kept confidential Have unlimited duration Are not property Can suffer from leakage

IP Due Diligence Why do you need to do IP due diligence? Investor- venture capitalist -private Float Commercialisation Trade sale

Key Issues What are the key issues? ownership encumbrances validity claims

Process What is the process? Establish a chain of title Identify and fix gaps ongoing management

Ownership Employees Consultants & contractors Disclosures to outsiders Development records IP policies

Identification Each individual IP asset must be mapped Chain of title Creator/inventor Employer Assignees Licensees Encumbrances

InventorEmployerPurchaser Licence 1Licence 2 Chain of Title Assignment Charge InventorEmployerPurchaser Licence 1Licence 2 Assignment Charge

Management Database: Registrations Dealings Correspondence Physical / electronic compilation required The database must be easy to use & review Renewal reminder system

Conclusion Be prepared Identify and fix problems before 3rd party due diligence Maximise value Leave enough time IP is a valuable asset - it should be managed as such