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Società Italiana Brevetti – Roma www. sib. it - roma@sib. it How to maximize the Exploitation of Intangibles: Going Beyond the Protection of Intellectual Property Rights to Business Strategies based on Licensing, Franchising and/or Merchandising by Fabrizio de Benedetti Caserta, November 30, 2005

Fabrizio de Benedetti Società Italiana Brevetti – Roma www. sib. it - debenedetti@sib. it Beyond the protection of IP IP rights are assets having no value per se. Rather they are expenses accounted at cost. IP rights are Business Assets At what time the shift from one category to another takes place ? Use vs. value extraction

Fabrizio de Benedetti Which Assets Società Italiana Brevetti – Roma www. sib. it - debenedetti@sib. it New Traditional Patents Utility Models Know-How Trade Secrets Plant Varieties Designs Trademarks Copyright Expansion trend Business Patents Topographies of integrated circuits registrations Computer-implemented inventions Software Data Compilation / Databases Business Identifiers (domain names) Geographical indications Slogans Sounds Distinctive packaging / Trade dress Person’s identity Properties from characters (pictures, cartoons, TV, radio) Lifestyle properties Graphic symbols and computer icons Graphic user interfaces Website designs

Fabrizio de Benedetti Società Italiana Brevetti – Roma www. sib. it - debenedetti@sib. it TRIPs Agreement on Trade-Related Aspects of Intellectual Property Rights 15 April 1994 … taking into account the need to promote effective and adequate protection of intellectual property rights… …Recognizing that intellectual property rights are private rights…

Fabrizio de Benedetti Società Italiana Brevetti – Roma www. sib. it - debenedetti@sib. it Which business Direct use Indirect use

Fabrizio de Benedetti Direct use Società Italiana Brevetti – Roma www. sib. it - debenedetti@sib. it No real business without innovation Either traditional manufacturing companies or new start-up or spin-off companies need an innovative idea in order to plan their business and to focus their strategies around it.

Fabrizio de Benedetti Direct use Società Italiana Brevetti – Roma www. sib. it - debenedetti@sib. it Protecting the idea The idea, idea being the seed from which the business should develop, needs to be protected. It will then turn into an asset.

Fabrizio de Benedetti Direct use Società Italiana Brevetti – Roma www. sib. it - debenedetti@sib. it Extracting value Direct exploitation not limited to traditional use of a patented innovation, a design, a trademark, a copyright, etc. Includes creative recognition of all potentialities (e. g. business expansion areas, geographical expansion, additional protectable items such as simplifying or enhancing technology, new design, new graphics, new colors, new slogans, creative use in advertising, etc. ). The phenomenon of no factory companies.

Fabrizio de Benedetti Indirect use Società Italiana Brevetti – Roma www. sib. it - debenedetti@sib. it Ø Licensing Ø Joint Venture Ø Franchising Ø Merchandising Ø Creation of a new business

Fabrizio de Benedetti Fund Raising Società Italiana Brevetti – Roma www. sib. it - debenedetti@sib. it • Public loans or capital contributions for start -up innovative business • Securitization (bank – private investors venture capitalists) • Equity financing IP valuation

Fabrizio de Benedetti Società Italiana Brevetti – Roma www. sib. it - debenedetti@sib. it Fair market value Tangibles vs. Value-in-use Intangibles

Fabrizio de Benedetti Valuation of IP Società Italiana Brevetti – Roma www. sib. it - debenedetti@sib. it Ø The value of an intangible depends on its context Ø Potentialities, strategies, capabilities influence the IP value Ø Proprietor’s business plan determines the value-in-use

Fabrizio de Benedetti Valuation problems Società Italiana Brevetti – Roma www. sib. it - debenedetti@sib. it IP may be employed for different uses IP is unique even in the same area of activity the corresponding market being more difficult to define IP may include a number of rights of different nature IP should be considered with respect to its legal status

Fabrizio de Benedetti Valuation methods Società Italiana Brevetti – Roma www. sib. it - debenedetti@sib. it Ø Cost approach (principle of substitution) Ø Market approach (reference to transactions involving similar assets in similar markets) ØRoyalty income (anticipation of future income relating to use of IP)

Fabrizio de Benedetti Società Italiana Brevetti – Roma www. sib. it - debenedetti@sib. it From Cognitive property (knowledge) to Intangible economy (profit)

Fabrizio de Benedetti Società Italiana Brevetti – Roma www. sib. it - debenedetti@sib. it Thank you!