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2023 | Book

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Intellectual Property Management for Start-ups

Enhancing Value and Leveraging the Potential

Editors: Martin A. Bader, Sevim Süzeroğlu-Melchiors

Publisher: Springer International Publishing

Book Series : Management for Professionals

Part of: Springer Professional "Business + Economics & Engineering + Technology" , Springer Professional "Business + Economics"

Table of Contents

About this book

This book examines intellectual property (IP) as an important value driver for start-ups. Businesses of all sizes are inevitably confronted with intellectual property issues at some point, but start-ups and their collaborators face unique challenges and opportunities in IP management. Identifying, generating, and exploiting intellectual property can lead to sustainable competitive advantages and avoidance of risks. Many start-ups sense the complexity of IP management and therefore place their energy elsewhere. However, the clear conclusion to be drawn from this unique collection of contributions is that putting an IP management strategy in place is critical to the successful development of a business. Prof. Dr. Martin A. Bader and Prof. Dr. Sevim Süzeroğlu-Melchiors have years of experience as consultants, entrepreneurs, business owners, and researchers where they saw firsthand the need for a comprehensive yet practical resource for start-ups and their key stakeholders.

This book explores different perspectives in dealing with IP from six different angles: the start-up’s view, the investor’s view, the corporation’s view, the university’s view, the global IP office’s view, and the advisor’s view. Each section consists of chapters written by leading experts from around the globe including Silicon Valley, Canada, Israel, Switzerland, Germany, Finland, France, Australia, Brazil, India, Japan, Singapore, and South Africa. Contributors bring practical experience from a wide range of sectors, such as information and communication technology, software, artificial intelligence, machine learning, cybersecurity, industrial automation, internet of things, life sciences, pharma, crop science, biotech, medtech, mining, sustainability, climate tech, and even quantum technologies. This timely publication serves as a guidebook for entrepreneurs and other key stakeholders in the start-up ecosystem. It empowers founders to develop their own IP management strategy to mitigate risk, create and capture value, and lay the groundwork for sustainable growth. An essential reference for start-ups to achieve business excellence.

“This edited book volume offers valuable insights, bringing together perspectives of key stakeholder groups from a wide variety of innovation ecosystems – an invaluable resource.” —Carsten Fink, Chief Economist, World Intellectual Property Organization, Geneva

“A timely book for those wanting a clear overview of the issues the different players encounter in the start-up ecosystem. A useful resource indeed. Congratulations to the editors and team.”—Audrey Yap, Managing Partner YUSARN AUDREY LLC, Past President LESI, Chairman Singapore Innovation & Productivity Institute, Singapore

“A ‘must read’ for all innovators in the start-up world. It is truly a fantastic book and one I would recommend being bought and read (in full)!”—Laurence Freeman, Professor (Adjunct), CU Denver Business School, Jake Jabs Center for Entrepreneurship, Denver, Colorado, United States

Frontmatter

How to Increase the Success of Innovative Start-Ups with Intellectual Property: An Introductory Overview

Six Views but One IP to Rule Them All

Abstract

This introductory chapter builds on the topic of intellectual property management and its relevance to the success of innovative start-ups. Existing literature, trends, and developments in the start-up market are presented. The edited volume features six parts corresponding to categorical views of the main stakeholder groups within the start-up ecosystem: the start-up’s view, the investor’s view, the corporation’s view, the university’s view, the global intellectual property office’s view, and the advisor’s view. All chapters are introduced in a condensed form and an overview is given of the topics covered, case studies, regions, and industry sectors, as well as learnings and takeaways from all contributions in this compact compilation.

Sevim Süzeroğlu-Melchiors, Martin A. Bader

The Start-up’s View

Frontmatter

Israeli Start-Ups and Ecosystem

Abstract

Israel is referred to as the “Start-up Nation” due to the population’s unique entrepreneurial DNA, the massive research and development activity, the high level of venture capital activity, and its substantial state funding that nourishes highly successful start-ups across industries. Most start-ups in Israel and worldwide have a defined life cycle of different phases. Each phase has unique characteristics that directly affect the strategy for intellectual property in general and patents in particular. This chapter describes the adaptable IP strategy, different intellectual property matters that are typical for each start-up stage, and demonstrates best practices to handle these matters.

Roy S. Melzer

IP as a New Value Driver for Sustainable Start-Ups

Abstract

Total investment for climate tech firms, the pace of start-up development, and the average funding size have all increased during the last ten years. Early-stage venture financing for climate tech startups totaled US$418 million in 2013. However, overall venture capital surged by more than 3,750% in 2019 to $16.1 billion. While it is fashionable to be sustainable, little is known about how a business model benefits and successfully implements sustainable technology. Theoretical and realistic sustainability approaches share several similar characteristics: Enhancing sustainability often requires transition, innovation, or adaptation. The question is: What is the difference between “sustainable technology” and “sustainable innovation”? The ability to innovate in sustainability is a requisite business capacity, whether linked to minor incremental measures or extreme, revolutionary developments. There is, however, a lack of transparency and consistency in the terminology and a lack of demonstrated scientific grounding in value creation. To valuate a new venture or start-up is a critical and long-debated question in entrepreneurial financing. Determining a start-up or any other company’s economic valuation is one of the more challenging and vital discussions a founder can have with institutional investors. One of the greatest assets of a start-up and the cornerstones in innovation is intellectual property and intellectual property rights. This chapter will discuss how sustainability, defined through the Sustainable Development Goals (SDGs) metrics, is used as a new driver in the valuation of the technology and intellectual properties in order to reflect the true value of a company’s intellectual property when looking for financing through, for example, collateralization of its IP.

Sven Gensler, André Brosowski, Philipp E. Hammans

Mining IP: A Story of Start-Ups in the Global Mining Industry

Abstract

Two SME companies (considered start-ups) which operate in the Mining Equipment Technology Services (METS) sector of the Global Mining industry have been studied to understand the role that their IP, along with their associated IP strategy, has played in their success. With both companies starting to expand internationally, their IP strategies have become increasingly important. Both companies are reliant on technology and thrive due to a focus on and understanding of IP. Generation and protection of IP has allowed these organizations to continually grow by maintaining a strong awareness of IP across their organizations. Key insights from the case studies include the importance of IP awareness, training, non-disclosure agreements, the critical nature of a company strategy composed of robust technology and IP strategies, the importance of utilizing all relevant types of IP protection, complexities added through collaboration, taking a proactive approach, and finally, the absolute requirement to remain focused on the commercialization goals while being very conscious of IP. The clear message is that IP is a valuable asset which needs nurturing and must be actively managed throughout the entire technology life cycle and interconnected commercialization phase.

Dallas L. Wilkinson, John Walker

IP and Start-Ups in the Context of Florianópolis, the Silicon Island of Brazil

Abstract

The management of a company’s intellectual property is a key issue in its strategic planning and long-term competitiveness. This issue becomes even more relevant when it comes to start-ups given the inherent innovative nature of this type of business. Despite its clear importance, developing countries such as Brazil suffer from a lack of structure, delays, high costs, and legal insecurity in the matter of patents and intellectual property, which makes it difficult for start-ups to obtain the necessary registrations. One of the most common ways to solve the problem in this case is to look for ways to facilitate the process available in the local innovation ecosystem. Florianópolis is one of the most important start-up centers in Brazil and serves as a benchmark for cities and governments in developing countries that want to create strong innovation ecosystems.

Thiago Rafael Ferreira Marques, Andressa Sasaki Vasques Pacheco

The Investor’s View

Frontmatter

“IP Is Paramount:” The Significance of IP in Early-Stage Start-Up Investment Decisions

Abstract

Venture capital (VC) investors play an important role in the start-up ecosystem, particularly during early stages. To understand how investors think about intellectual property and what role it plays in their investment decisions, this chapter provides interviews with three experienced VC experts. The interviews confirmed, unsurprisingly, that intellectual property is a very important aspect for VC investors in their investment decision-making process. Investors have clear expectations in certain areas while they are less concerned in others, and clear preferences exist as to how and when intellectual property (IP) should be in the focus during a typical assessment process. A stepwise approach is recommended for founders to gradually and efficiently climb up the ladder of IP savviness, to be prepared to meet investor expectations in the next pitch to unlock access to capital.

Ulf G. Schaberg

The Role of IP and Intangible Assets in Tech Private Placements: An Investor’s View

Abstract

We examine the role intellectual property (IP) and intangible assets (IA) play in technology private placements from the viewpoint of an investor. We also incorporate the perspectives of various other stakeholders involved in launching, financing, operating, scaling, and exiting technology ventures. We attempt to engage and educate our readers through illustrative case studies based on our combined six decades of relevant and personal experiences and provide actionable insights they can use, whether as an investor or an investee, in their next deal. We also draw upon the collective wisdom of various industry practitioners we have worked with during our careers

Praveen Shah, Pallavi Shah

What’s the Big Idea? The Crossroads Between Investment and IP

Abstract

The purpose of this chapter is to assist readers in demystifying the investment process in start-ups and early-stage companies. The authors address this topic from both a start-up and investor perspective and provide further insight on determinant factors of the investment decision-making process. While focusing on the Canadian regulatory landscape, the authors emphasize the importance of establishing an intellectual property strategy (MVIP) early on, enhancing the ability of start-ups to attract capital from investors, as well as to foster competition and productivity.

David Durand, Cédrick Mulcair

Intellectual Property-Backed Financing

Abstract

Start-ups can access non-dilutive financing by leveraging their intellectual property and intangible asset portfolios through intellectual property-backed financing. The author uses her own experience to show how intellectual property-backed financing works, its costs and benefits, and how start-ups can prepare themselves better to access this type of financing.

Lally Rementilla

The Corporation’s View

Frontmatter

IP as an Important Value Driver for Start-Up Strategies in Established Companies

Abstract

Established companies apply two types of start-up strategies to drive innovation and growth: With outside-in start-up strategies, they get access to external start-up innovations; with inside-out start-up strategies, they build independent new innovative businesses. These two strategies are fundamentally different, but they have in common that IP becomes an important value driver when a value-driven IP strategy is pursued. Based on their own experience, the authors show how this approach works in practice and theory.

Beat Weibel, Rudolf Freytag

Strategic Uses of IP: Applying Learnings from Large Companies to Start-Ups

Abstract

Established technology companies normally have an intellectual property (IP) strategy in place. This may include at least elements of patenting, trademark filing, IP risk mitigation, and a plan for using IP in their business. For building an effective IP strategy, these companies have considered many strategic ways to exploit their IP. Start-ups can learn a lot from larger companies’ approaches to IP. Drawing from her own experience, the author explains the strategic uses of IP from a large company’s vantage point, as well as how to apply this knowledge to the IP strategy of start-ups. The aim is to provide start-ups with views and ideas for developing their own IP strategy. This chapter is based on extensive experience with companies in mobile devices and related technologies, consumer electronics, and general electronics companies. In this context, IP means specifically patents; this chapter does not discuss trademarks or branding. The larger context of standard essential patents is also excluded and only addressed on a high level.

Sonja London

How the Life Sciences Industry Handles IP in Start-ups

Abstract

Jörg Thomaier, Head of IP for a global blue chip, shares his views on how a start-up should take care of its intellectual property (IP), strategically build up a portfolio, and avoid certain kinds of mistakes. The chapter draws on extensive first-hand experience when investigating start-ups to prepare for investing in, collaborating with, or taking over such entities. He also offers insights and takeaways for investors on what to look for and expect from a start-up and its management when getting ready to fund and invest. Some hints for licensors, specifically universities and other publicly funded entities, are also included. The chapter is a valuable read for anyone interested in gaining insights and advice from a leading IP professional.

Jörg Thomaier

Mind the Gap: Business and Cultural Aspects for Start-Up Collaboration in Japan

Abstract

Corporations seek partnerships with start-ups to enhance their innovation efforts and to introduce disruption in their market, provided a strong IP portfolio supports the opportunity developed by the start-up. It is thus important for the start-up to apply IP management principles that will lead to successful partnerships. Namely making sure that the start-up owns all IP related to their proposition, the IP secures a strong exclusivity to keep the competition at a distance from the market it has developed, and avoids infringing the IP of other players in the market will attract corporations. This chapter will review these points with an emphasis on the business culture gap that exists between a start-up and a Japanese corporation that is often seeking partnerships with overseas start-ups to compensate for the modest number of start-ups in the Japanese ecosystem.

Robert Alizon

The University’s View

Frontmatter

Experimentation in Academic Technology Commercialization

Abstract

Technology commercialization is now one of the cornerstones of the experience in the academic environment. Universities and colleges are now highly dedicated to understanding and giving priority not only to creating new technologies but also to commercializing them. This chapter describes some of the experiences and empirical evidence that we received as we were building the Runway Startup Postdoc Program at the Jacobs Technion-Cornell Institute at Cornell Tech. It explains three broad steps of technology transfer experimentations and flips the traditional technology and transfer office (TTO) model. Experimenting should be a natural component of incubator programs and the most effective way of producing meaningful change in technology transfer systems. Our recommendation to academic incubators and TTOs is to embrace experimentation and build a technology transfer culture that is less concerned about the traditional output metrics (i.e., patents, licenses, revenue) and is more geared toward providing people with the resources, connections, and knowledge they require to create a start-up.

Fernando Gómez-Baquero

A University Perspective with a South African Flavor

Abstract

Technology transfer of research emanating from a publicly funded research institution operates within a strict legislative and intellectual property (IP) policy framework. Understanding the complexities of the university environment is challenging but rewarding, as Silicon Valley and Stanford University, along with many other university technology and science parks, have proven over decades. Not all university innovation and technologies are suitable for licenses or start-ups. The choice of the model for commercialization is complex and intriguing. This chapter shares some insights into university technology transfer.

Madelein Kleyn

The Technology Transfer Office as Facilitator Between Researchers and Investors: A German Perspective

Abstract

Higher education institutions face the challenge to fulfill their role in the so-called “third mission,” next to research and teaching. One major part of this third mission is technology transfer (TT) and, consequently, the creation of technology-oriented and knowledge-based spin-offs. Universities and non-university research institutions can succeed in this particular mission by providing a supporting culture and suitable policies, which allow spin-offs to become important drivers of innovation. The journey from research results to the development of products and services to market maturity needs intensive research and thus time and money. An efficient intellectual property (IP) management by the university’s technology transfer office (TTO) plays an indisputably crucial role. Founders must be aware of the rights of third parties. Bringing patents into a company should be the normal case. In reality, the contribution of patents plays a huge role when it comes to the distribution of shares. Attracting venture capital (VC) and fresh money for scaling goes along with the necessity of freedom to operate. Having shareholders in the company who hold patents privately prevents growth capital to fuel the company. In this chapter, we present the views of a university TTO, a university researcher/founder, and an investor/practitioner on the importance of IP for university spin-offs.

Alexandros E. Papaderos, Oliver Bücken

Managing IP-Related Tensions Between Universities and Spin-Offs

Abstract

Intellectual property (IP) is a critical asset for the growth of university spin-offs. Since the IP usually belongs to the parent university, spin-offs must find an agreement on how to access it. However, there is little evidence on how universities’ technology transfer offices (TTOs) and spin-offs find this agreement. This study aims to shed light on this process. Drawing on four Swiss and German TTOs and 12 related spin-offs, the authors provide insights into navigating through this process. The data reveal that both parties face four critical tensions while negotiating: (1) TTO’s success might hamper spin-offs’ success; (2) TTO owns the IP but is no IP protection advisor; (3) need for standardized, yet tailored processes; (4) spin-off’s independence, yet further dependence on the university. The authors further determine implications from this study that help to overcome these tensions.

Alexander A. Fink, Joshua Arbter, Stephan M. Wagner

The Global IP Office’s View

Frontmatter

Tools of the Trade: A Trading Nation’s View on the Value of IP Rights for Start-Ups

Abstract

For start-ups, effective use of intellectual property (IP) rights can help to attract resources, drive business value and growth, and take advantage of changes in market conditions. However, effective use of IP rights depends on start-ups seeking the right information and support, auditing their intellectual assets, understanding how the nature of their industry should inform their IP strategy, and drawing on the support of local partners in target markets. These benefits and approaches to IP are illustrated drawing on evidence from Australia about IP’s role in entrepreneurship and business growth.

Michael Falk, Ben Mitra-Kahn, Charlotte Trinh, Haiyang Zhang

Market Success for Inventions: Patent Commercialization Scoreboard and Innovation Support

Abstract

Deep tech start-up companies aiming for high growth must focus on intellectual property rights, particularly on patents. As demonstrated by the EPO’s studies, patent protection makes it easier for these businesses to gain market access, strengthen their negotiation position, attract funding, or achieve strategic value in positioning the company. Start-ups and SMEs, along with universities and public research organizations, face similar challenges in commercializing their patented inventions, particularly the lack of resources, skills, and contacts. Identifying the right partners and their contacts, and the cost and complexity of negotiations, often limits collaborative exploitation. For this reason, the EPO’s Patent Academy has developed a varied training program to facilitate the commercialization of technology and high growth. In particular, the EPO-LESI High-growth Technology Business initiative is tailored to enhancing the knowledge and skills of business decision-makers and IP professionals in deep tech start-ups and SMEs, thereby enabling them to maximize the market success of their patented inventions.

Thomas Bereuter, Adéla Dvořáková, Ilja Rudyk

Raising IP Awareness of Start-Ups: A French Perspective

Abstract

Thanks to a high degree of active support from the public authorities, France became a leading start-up nation. This is especially the result of a realization by the country’s policymakers that the ability to stay in the technology race was key to maintaining one’s position in a tough world competition increasingly dominated by the rivalry between the United States and China. The early achievements manifested in the development of the French start-up ecosystem are not totally correlated with an intellectual property (IP) policy of the same magnitude. This puts the high-value French start-up community at potential risk, particularly vis-à-vis predator actions of global players in the field of disruptive technologies. An examination of the international landscape allows us to identify the possible reasons for such a situation as well as possible remedies.

Philippe Borne

Strategic Considerations and the Seed-to-Maturity Model When Establishing the Ideal IP Portfolio in the Start-up Context

Abstract

This chapter integrates IP assets into the lean start-up method and explores the features and trade-offs of trade secrets, trademarks, copyrights, and patents in the start-up context. The utility and strategic value of these IP assets are analyzed against the seed-to-maturity framework and minimum-viable-product design process, and the chapter culminates in tangible strategies for maximizing the value of “lean IP portfolios.”

T. Alexander Puutio

The Advisor’s View

Frontmatter

An Introduction to Intellectual Property Rights and Formal and Informal Protection Strategies

Abstract

This chapter provides an introduction to the most common types of intellectual property rights (IPRs), such as patents, trademarks, designs, and more. It also highlights why only a holistic complementation of both de facto and legal protection strategies can provide effective innovation protection for competitive advantage and to capture value. The chapter concludes with 10 practical tips for start-ups to manage protection strategies and IPRs.

Martin A. Bader

Important Aspects of IP for Start-Ups: Strategies for Avoiding Common Pitfalls

Abstract

A technology- or science-driven start-up’s intellectual property is one of its most crucial assets and thus securing its intellectual property is of utmost importance for the company’s success. In this chapter, the authors draw from their own experience to highlight IP strategies and common pitfalls that start-ups face in securing their intellectual property.

Louis Lagler, Christian Ebner

Blind As a Mole? How Patent Data can Help Start-ups to Compete

Abstract

This chapter provides an overview of common types of patent search and analyses such as novelty search, freedom-to-operate search (FTO), patent landscape, patent-based market and competitor analysis, technology scouting, and infringement assessment. Two special sections highlight the step-by-step approach for conducting a patent technology landscape and a technology scouting. The chapter concludes with practical tips for applying patent search results in a strategic and operative view.

Sevim Süzeroğlu-Melchiors

Technical Patent Circumvention: How Start-ups can get Around Infringed Patents

Abstract

When a company has a great idea to solve a technical problem, it usually gets disillusioned upon finding that this idea has already been patented by somebody else. Usually in this case one starts to activate lawyers in order to find out if one can legally get around the patent. A nullity complaint at court or negotiations on how to be able to use the patent through license fees or cross-licensing are options. There is a technical way to circumvent patents as well. We describe a systematic approach and a procedure on how R & D departments can work with existing patents and circumvent them with technology. This procedure is not only valid for circumventing competitors’ patents but also for fostering one’s own patent applications and thus developing one’s own solid patenting strategy.

Oliver Mayer, Frank C. Schnittker

Backmatter

Title: Intellectual Property Management for Start-ups
Editors: Martin A. Bader
Sevim Süzeroğlu-Melchiors
Publisher: Springer International Publishing
Electronic ISBN: 978-3-031-16993-9
Print ISBN: 978-3-031-16992-2
DOI: https://doi.org/10.1007/978-3-031-16993-9