Author and Photographer: Zhang Zhengwei 2020.09.28
Intellectual property and innovative technology are highly correlated. The research and development efforts that organizations and companies invest in are like valuable assets. Without intellectual property protection, it's like leaving your house unlocked, allowing others to rummage through your belongings. In my opinion, the strategic layout of intellectual property is as important for a company as its investment in research and development. To apply innovative technology successfully in the market, these two aspects must complement each other - they are inseparable. Moreover, it's well-known that intellectual property is used as a means of protecting technology. In this era of intense competition and rapid changes, how enterprises, especially those in Taiwan, manage intellectual property with diverse and innovative approaches to create value is a pressing topic that requires collective thinking.
During the 2020 Taiwan Innotech Expo, a forum named "2020 TIE Innovation Technology Forum" was jointly organized by the Industrial Development Bureau of the Ministry of Economic Affairs, Industrial Technology Research Institute, and the globally renowned intellectual property magazine IAM (Intellectual Asset Management). The forum, held online in the main stage area, invited speakers from Taiwan and abroad to discuss topics related to the value of intangible assets, technology cooperation, and transfer, among other intellectual property management issues.
2020 Innovation Technology Forum - Address by Minister of Economic Affairs Wang Meihua
Prior to the event, Minister of Economic Affairs Wang Meihua delivered an online speech, mentioning, "The COVID-19 pandemic and the U.S.-China trade war have brought significant changes to the competitive landscape of industries. Not only does the nation need to reexamine its industrial development policies, but companies themselves also need to adjust their research and development strategies and intellectual property layout strategies accordingly." Minister Wang emphasized that during her tenure as the director-general of the Intellectual Property Office, she actively improved the intellectual property environment in Taiwan, including ongoing reforms of intellectual property-related systems, training and certification of intellectual property professionals, evaluation and financing of intangible assets, as well as collaborations with international organizations. It's because of the protection of intellectual property rights that innovative technology can be wielded like a warrior in armor with sharp weapons, ready to enter the battle!
Liu Wen-hsiung, the president of the Industrial Technology Research Institute, referred to data from the World Economic Forum, highlighting that Taiwan ranks 3rd in technology innovation indicators (including patents per million people), but only 25th in capital market indicators. This indicates an issue with the linkage between Taiwan's technology market and capital market. However, President Liu emphasized that this dilemma is changing. He mentioned a representative case from last year, in which the Industrial Technology Research Institute, with the support of the Industrial Development Bureau of the Ministry of Economic Affairs, successfully collaborated with the Small and Medium Enterprise Credit Guarantee Fund of Taiwan and Taiwan SME Bank to create the first case in Taiwan of financing based on intangible asset valuation. Compared to the past when loans were often secured using real estate, this successful case has made various sectors believe in the potential value of intangible assets, becoming an indicator of industrial and intellectual property upgrade (learn more: Small and Medium Enterprise Credit Guarantee Fund, Taiwan SME Bank, and Industrial Technology Research Institute successfully complete Taiwan's first intangible asset financing case).
Top Left: Daniel Cole, Asia Director, Law Business Research; Bottom Left: Jeff Holman, Chief Intellectual Property Strategist
Top Center: Su Meng-Tsung, Director of Industrial Technology International Center, Industrial Technology Research Institute; Bottom Center: Chao Ting-mao, Director of Patent Licensing, Dolby Laboratories
Top Right: Yu Yi-sheng, Director of Intellectual Property Division, AU Optronics; Bottom Right: Ed Fish, Co-founder of Tech+IP Capital
So, how is the value of intangible assets actually manifested?
Ed Fish, Co-founder of Tech+IP Capital, LLC, who has been involved in facilitating transactions worth over six million US dollars in the past three years, stated, "Because of the intangible nature of intellectual property, its ecosystem has become quite diverse!" In other words, there are numerous ways to play with it. However, I believe that both readers and I can agree that in Taiwan, the following methods are quite rare.
Ed Fish, Co-founder of Tech+IP Capital, summarizing
He categorized three main models in the market, including Patent Litigation Financing, Investment Managers, and Activist Investors:
From the above insights by Ed Fish, it's evident that the value manifestation methods for intangible assets are quite diverse. However, he emphasizes that companies must first activate their thinking about intellectual property management, break away from traditional usage, and evaluate and recognize their desired objectives to choose suitable partner models.
Yu Yi-sheng, Director of Intellectual Property Division at AU Optronics, reminds everyone to start from the source. After all, to generate high-value returns, the most important aspect is to have high-quality intangible assets. Using AU Optronics as an example, in the face of numerous patent lawsuits from competitors and NPEs in the past, the company learned valuable lessons and realized that "high-value patents need to be cultivated from the early stages of R&D!" Taking that further, Chao Ting-mao, Director of Patent Licensing at Dolby Laboratories, who has been actively involved in patent transactions, licensing, and international patent pools, joked, "The value of patents is often subjective, like beauty in the eye of the beholder." But he shifted his focus and emphasized, "When evaluating, we must not make too many assumptions. It's important to rely on objective data!"
Sharing by Satoshi Matsuo, Chief Intellectual Property Officer at Hitachi
Satoshi Matsuo, Chief Intellectual Property Officer at Hitachi, shared insights from his own company. As Hitachi's business gradually shifted from physical products to digital solutions, their overall intellectual property strategy also underwent a transformation. They changed their strategy from competitiveness that hinders others from entering the market to collaboration that focuses on coexistence. The specific steps are twofold: firstly, they clearly take stock of and define the value of intellectual property assets, differentiating transferable and non-transferable assets. In this process, conducting thorough due diligence is crucial. Secondly, they use transferable assets to engage in strategic cooperation with suppliers, customers, and even competitors. The concept of strategic cooperation is also versatile, including Cross Licensing, Licensing Back, and more.
Kurt Brasch, Director of Patent Transactions at Uber, who has been deeply involved in facilitating transactions, shared his profound insights as well. He mentioned that when Uber was still in its startup stage and had few patents, they used patent transactions and sales to rapidly build a large patent portfolio to prevent potential attacks. However, since 2018, Uber recognized the importance of asset trimming! Kurt Brasch emphasized, "Compared to companies with tens of thousands of patents, having a patent portfolio of 3,000 to 5,000 patents might seem small. However, the annual maintenance costs for such a portfolio can still be a substantial expense for Uber." In recent years, Uber has shifted to a more precise and strategic way of building its patent portfolio! In response, the host of the event, Wu Chih-yi, Director of the Electro-Optics System Department at the Industrial Technology Research Institute, echoed, "In recent years, the Industrial Technology Research Institute has also been conducting lean practices on patent assets to ensure each patent has a strategic purpose. We cannot afford to have 'fat' patents!"
According to the "Current Status and Needs of Enterprise Intellectual Property Management Survey" by the Institute for Information Industry in 2019, most surveyed listed and OTC-listed companies had a perception of intellectual property management that focused on patent and trademark applications and maintenance. Based on my observations over the past few years, I strongly agree. Except for a few companies that focus on the international market, most companies still have fairly traditional perspectives on intellectual property management and application. The speakers at this Innovative Technology Forum shared many innovative perspectives on intellectual property management, and I learned a great deal. I hope this will also inspire companies in our country!