Neda Soydan Intellectual Property Solutions How to Monetize

Neda Soydan Intellectual Property Solutions How to Monetize IP in Turkey?

Outline I. University vs Industrial IP Policies The Challenge of Numbers II. Why to monetize? Case Study III. How to monetize? The Road Map IV. A Running Scenario from Turkey

UNIVERSITY IP POLICIES - Primary focus is to educate and conduct technical research. - Embrace all faculty, staff, and students, - Govern new technology according to the substantial use made of university resources. * - Restrictions are placed on the inventors in order to avoid forfeiture of patent rights. INDUSTRIAL IP POLICIES - Primary focus is to invent. (Hired to invent) - Assign all worldwide rights to the employer. * - The use made of industrial resources is not taken as a priority. - Licensing income is mostly not shared. - Less restrictions on the inventor.

TURKISH UNIVERSITIES’ 2016 TURKISH INDUSTRY’ 2016 - - İstanbul Üniversitesi: 115 İstanbul Gelişim Üniversitesi: 69 Sabancı Üniversitesi: 31 Koç Üniversitesi: 27 İstanbul Teknik Üniversitesi: 27 Marmara Üniversitesi: 21 Boğaziçi Üniversitesi: 11 Özyeğin Üniversitesi: 10 Bahçeşehir Üniversitesi: 8 Okan Üniversitesi: 4 İstanbul: 2773 Ankara: 738 Bursa: 494 İzmir: 281 Kocaeli: 233 What do these numbers say? - Istanbul Universities Total : 323 Turkish Universities Total: 792 (183 universities) - Total: 4, 519 Massachusetts Institute of Technology (MIT): 10, 222 California Technology Institute: 6, 240 Harvard University: 3, 895 Virginia University: 3, 323 USA Industry total : 56, 595

The Challenge of Numbers in Turkey i. Might be? Large share of patents from universities is registered by companies and the university staff only appears as an inventor. ii. Might be? Industrial dominance of patents is due to the fact that : companies leverage their patents for strategic and economic gain (via Tübitak Projects)

Industry - Academy Join IP A Good Example: Companies that research and produce new medicines operate under a very tough business model !!? ? ! Studies have found that: i. For every 5, 000 to 10, 000 experimental medicines considered, typically one will gain approval - ii. After 10 to 15 years of R&D – iii. Costing an average of $1. 2 billion – iv. At the end of the day, only 2 out of every 10 medicines will regain the money spent on their development.

Why to Monetize? i. Join the forces to monetize – Join resources – Join IP Role of universities : IP generators for research and industry ii. Play for the quality not the quantity. IP Monetization policy triggers quality * iii. Intellectual property has become increasingly important because of the changing mixture of the economy, with the development of knowledge-intensive industries such as software and biotechnology. It has become more essential than ever that firms have a clear policy for maximizing the value* of their intellectual property. Prof. Josh Lerner, Harvard Business School

Striking Monetization Strategies in USA i. Texas Instruments: TI ? ! Netted close to $1 billion annually from patent licenses. In some years, revenue from these sources has exceeded net income from product sales. ii. IBM: Patent-licensing royalties boosted from 1990 until today. 1990: $30 million Today: $1 billion 3300% ? ! $1 billion/year is free cash flow - a recurring net revenue stream that represents 1/9 th of IBM’s annual profits. To match that sort of net revenue stream, IBM would have to sell roughly $20 billion worth of additional products each year.

Striking Monetization Strategies in Turkey i. Arçelik: In pocket or Out-of-Pocket? ! The first licensing agreement in 2012 – first income of the patent portfolio ii. Ford In 2012, JMC (Jiangling Motor Company) requested the license of Ecotorq motor (Euro-5). - Ford Otosan signed a Technological Licensing Agreement with JMC to produce Ecotorq motors in China. - The regulation change starting at 2019, would force Shanghai and Beijing to use Ecotorq motors (Euro-6) so another licensing agreement was signed for further engineering knowhow transfer on truck cabinets and chassis.

How To Monetize? i. Start with the Valuation: Value of a patent depends on industries, potential buyers and alternative methods of the invention. Valuation needs a ‘multi*ranking’ value. How innovative – identify and articulate the invention How to apply – can the patents be applied, how fast can they be applied Who to sell – the ranks of buyers: who bought what? Anyone infringing? - confront and litigate with rivals. ii. What is the language of communication with potential buyers? Will they find you? How about a mail that says – will you be interested? iii. How to run the deals? * The lawyers war: is it always win-win?

A Scenario from Turkey i. Valuation report is prepared. ii. Potential Buyer is determined. iii. Communication with the buyer is established. iv. Offers have been set. v. In the stage of setting the deal *

THANK YOU