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Are injunctions at the ITC and district court within reach for SEPs?
27th of February 2023 | 15.30 GMT

Legal underpinnings of patent damage calculations in Germany
With Dr Dietrich Kamlah, Partner Taylor Wessing

Damage Calculations in Patent Infringement Cases in the United Kingdom
With Patrick Cantrill, President of the LES UK & Ireland & Senior Counsel Womble, Bond Dickinson
Professor Enrico Bonadio, City University London

Damage Calculations in IP Infringement Cases on Canada
With Professor Norman Siebrasse, University of New Brunswick

Some Novel, Non-obvious and (hopefully) Useful Views on IPRs, Open Innovation and Licensing
15TH DECEMBER 2022 | 15:00 – 16:00 GMT

Perspectives on the valuation of FRAND, injunctions and licensing commitments in the UK
2ND DECEMBER 2022| 15:00 GMT

UPC Judges Released – A Conversation on the Unified Patent Court
28TH OCTOBER 2022 | 15:30 GMT

The Influence of Women in IP: Women and the Unified Patent Court.
28TH APRIL 2022 | 16:00 GMT

Intellectual Property Valuation & Technology Transfer. Current Practices and Challenges
Intellectual Property Valuation & Technology Transfer. Current Practices and Challenges Join OxFirst for a Free Webinar Contact us to find out more how we can

Damage Calculations in Patent Infringement Cases in the United States of America
Damage Calculations in Patent Infringement Cases in the United States of America Oxfirst Webinar, 24 February 2022 Find out more here What this Event is

Intellectual Property Valuation – Are Patent Attorneys underpaid?
Intellectual Property Valuation – Are Patent Attorneys underpaid? Professor Roya Ghafele Presents for the Chartered Institute of Patent Attorneys: Webinar, 22.2.2022 Find out more here

Professor Roya Ghafele in European Parliament
Professor Roya Ghafele in European Parliament

Intellectual Property Management & Valuation in Turbulent Times
Intellectual Property Management & Valuation in Turbulent Times

Japanese Perspectives on Valuation and Licensing of Standard Essential Patents
Japanese Perspectives on Valuation and Licensing of Standard Essential Patents

Unleashing Patent Value in Early Stage Companies
Unleashing Patent Value in Early Stage Companies

Damages for Noneconomic Harm in IP Infringement Cases
Damages for Noneconomic Harm in IP Infringement Cases

Managing Intellectual Property for Public Health
Managing Intellectual Property for Public Health

Patents Work: Don’t Erode the Patent Incentive
Patents Work: Don’t Erode the Patent Incentive

University Intellectual Property – A Source of Finance and Impact
University Intellectual Property – A Source of Finance and Impact

University Intellectual Property – A Source of Finance and Impact
University Intellectual Property – A Source of Finance and Impact

Do we need an Intellectual Property Valuation?
Do we need an Intellectual Property Valuation?

Intellectual Property Management Approaches to solve the Covid crisis
Intellectual Property Management Approaches to solve the Covid crisis

IP portfolios are regularly viewed in commercial terms; more than 80% of a firm’s value can be manifest in its intangible assets, of which IP is a feature. However, we suggest that IP can also be viewed as an asset with appreciable social valuealongside its commercial value. This article reviews two examples where the social value of IP is recognised, the United States Patent and Trademark Office’s (USPTO)‘Patents for Humanity’ awards programme, and UC Berkeley’s Socially Responsible Licensing Programme. We argue that existing patent management strategies could be adapted to take into account social value that potentially exists within a firm’s IP portfolio. The two initiatives profiled here offer cues for how business might optimise this social value.
The United States Patent and Trademark Office (USPTO) offers accelerated progression through the patent process as a prize for winners of their ‘Patents for Humanity’ awards programme. Patents for Humanity is an effort to incentivise businesses to innovate in the interest of otherwise underserved markets and those in need. Submissions are evaluated by the humanitarian value they hold through a review of the subject matter, the target population, the contribution the applicant has made to making the technology more available for humanitarian uses, and the impact the technology has or will have. Importantly, awards are also given to those who make available patented technologies to other researchers working on humanitarian issues. These criteria offer insights into the means by which patents can be employed to generate social value both directly – by catering to underserved populations – or indirectly – by supporting the development of new humanitarian technologies. Previous winners have included mechanical alternatives to blood transfusion, malaria vaccines, and prosthetic limbs that are affordable and easily adjustable. Yet with fewer than 15 awards made each year, the large-scale impact of this programme in delivering socially impactful returns is limited.
University policies can also assist in achieving social impact. UC Berkeley, for example, operates a Socially Responsible Licensing Programme (SRLP). Begun in 2003, the SRLP outlines the management expectations of IP owned by the university or arising from it (for example, through spin-outs) with the goal of promoting widespread availability or technology and healthcare in the developing world. In practice, this involves supporting spin-outs with social impact by inducing philanthropic funding, by stimulating the creation of non-profit product development companies, by licensing university IP on a royalty free or at-cost basis and byensuring public access to vital technologies is not impeded. This is an admirable programme but is limited by a pharmaceutical focus characterising many of its headline projects and only having influence over technologies arising from the university.
Programmes like Patents for Humanity can assist the progression of select technologies and university technology transfer policies like SRLP can offer guidance and support for the implementation of socially impactful IP. However, it is business – as the holder of most of the world’s IP – which has the greatest opportunity to employ IP in generating social value.
“Society expects much more from companies than simply a well-made product or a reliable service at the right price” (Dees, 2002). That statement from Gregory Dees will increasingly ring true. Yet whilst the prevalence of CSR and ESG initiatives within business has grown in the last two decades, traditional patent strategy still does not account for the potential to use patents to generate social impact. This is an oversight, given several studies of CSR activities have shown there are commercial advantages to engaging in activities which deliver social impact, in particular improvement to company reputation (Frombrun & Shanley, 1990; Black, Carnes & Richardson, 2000; Cole, 2012). Instead, patent strategy to date has focussed on protecting rent yielding assets from imitation, maximising licensing revenues or using patents defensively (Somaya & Smith, 2002).
This is regrettable, but not unchangeable. We might consider the words of Antony Taubman, Director of the IP Division at the World Trade Organisation (WTO), who notes that IP management in the public interest is a practical discipline requiring active management on a case-by-case basis (Taubman, 2010). Firms could adopt an approach like that of SRLP, and employ patents that would otherwise go under- or un-utilised for social impact. Access-oriented licensing agreements, which reduce the cost barrier for firms wishing to license products in LMICs, or supporting philanthropic organisations through donation of patent rights are two means of generating social impact. Supporting the development of new technologies, as highlighted through Patents for Humanity, would also be a valuable approach.
Perhaps business’ greatest strength is the opportunity to collaborate in generating social impact. Some industries have already made significant progress in this area. The Medicines Patent Pool (MPP), for instance, seeks to enable access to affordable treatments – particularly for HIV, hepatitis C and tuberculosis – in low- and middle-income countries (LMICs). Pharmaceutical companies agree to license their patents to the MPP which in turn sublicenses to generic manufacturers, enabling low-cost yet still effective treatments to be delivered to LMICs. Other industries might look to follow this lead and work together in novel, social-impact-focussed ways.
Businesses have the opportunity to leverage their IP portfolios to generate social value. Reframing patent strategy policies and taking cues from university technology transfer policies like SRLP or initiatives like Patents for Humanity can increase a patent portfolio’s overall value by developing its social value. Collaboration with other organisations within the industry can also be an effective means of making using IP to positive social difference. OxFirst’s extensive patent valuation expertise makes uswell placed to assist businesses looking to better understand the value of their patents, both in commercial and social terms. Our patent landscape reports can also help businesses comprehensively understand the market within which they operate.

Tesla recently announced record sales in 2022, delivering 1.3 million vehicles during the year. Despite this apparent success, the value of Tesla shares dropped by 65% and cut more than $700 billion from the firm’s market value, outdoing losses of the wider market by some margin. The electric vehicle (EV) pioneer faces fierce competition from established automakers in a market that is rapidly growing. At present, IP is an underappreciated as an asset in the EV industry. We suggest IP will become crucial as the importance of this market grows, and that investors and management should start paying attention to IP now.
Market growth
Elon Musk’s Tesla sold its first EV in 2008. Although prohibitively expensive for the general public, the price of EVs has fallen in recent years and consumer uptake has concurrently grown. 75% of cars sold in Norway in 2021 were EVs, as were 28% of all vehicles in Europe. Over one quarter of all new cars sold in the UK in December 2021 were EVs, an increase from 2% in December 2019.
This growth has been supported by governments keen to encourage ‘clean’ driving. Incentives for buying EV’s have included tax credits, reduced interest rates on loans and exemption from emissions-based restrictions. The UK Government has gone so far as to commit to ending the sale of petrol and diesel cars by 2030, whilst the EU has set out ambitious regulatory targets to reduce emissions output of vehicles up to 2030. One prediction suggests the EV market will be worth $1,299.3 billion by 2030 arising from a combined annual growth rate (CAGR) of 19.8%.
Intellectual Property is an underappreciated asset
Against a backdrop of such dramatic growth, technologies that support the EV market will rise in value too. Yet IP comes currently across as currently an underappreciated asset within the EV sector. Whilst Toyota holds a leading patent portfolio arising from its headline position in the hybrid cars and concurrent substantial investment into battery powered vehicles, it may well be the exception. Tesla, despite being the leading EV manufacturer by market share, holds far fewer patents and its founder has given free reign for others to use them.
At present, the industry lacks clarity on what patents are owned by who. Market participants seeking to get ahead in their understanding would benefit from an inquiry into the patent landscape and its corresponding economic mechanisms in the EV market. In addition, EV manufacturers may seek to collaborate and explore ways to extract value from the IP and find avenues to adequately manage their IP.Individual firms may also seek to increase the value of their IP position through acquisition, as Google did through acquisition of Motorola. What roles intermediaries and in particular patent assertion entities will play in this sector remains yet to be seen. Given the high potential for standardisation within the industry it is likely the overarching question as to how to value standard essential patents and appreciate the FRAND (fair, reasonable and non-discriminatory) agreement may also arise here. So far, this sector lacks a position or point of view on the issue.
Standards and Patents
Whilst not yet present, the interoperable nature of EV use means standardisation could emerge. For example, vehicles of different marques will use the same public charging facilities and proposals for exchangeable battery packs would require technological standardisation to ensure compatibility between marques. A parallel can be drawn with the wireless communications sector, where disputes around standard essential patents (SEPs) and the FRAND terms on which they are to be licensed have been prevalent in the last decade. EV manufacturers would benefit from an assessment of their own portfolios to understand how standardisation and corresponding patent portfolios might affect them.
Conclusion
The EV market remains young but is entering a period of substantial and sustained growth. Prudent investors and managers should be proactive in understanding their own and their competitors’ patent positions. Those able to appreciate the risks and opportunities first will be best placed to profit as the EV market grows.
OxFirst has assisted clients in innovative industries to utilise their IP for over a decade. Our patent valuation services help businesses understand the patent landscape they operate in, the strengths and weaknesses of their own portfolio, and potential commercialisation opportunities.

What is economic growth? why is it so important?
According to Nobel Prize winning economist Simon Kuznets a country’s economic growth may be defined as “a long-term rise in capacity to supply increasingly diverse economic goods to its population, this growing capacity based on advancing technology and the institutional and ideological adjustments that it demands.”1
To answer the question of why economic growth is important, we need to look at it from two different perspectives – from a developing and a developed countries perspective. According to an OECD report, economic growth is the most powerful instrument for “reducing poverty and improving the quality of life” in developing countries. 2 In the case of developed countries, high economic growth leads to increased profitability for firms, enabling more spending on research and development which can lead to technological breakthroughs, and it also increases confidence and encourages firms to take risks and innovate. According to the Bank of England, “the citizens of a country with high GDP are likely to have high incomes, people are likely to be earning and spending more and businesses are likely to be hiring and investing more (heavily in R&D).”3
Explanations of economic growth have increasingly focused on the role of innovation and on the power of expected profits to motivate innovation. 4 Private-sector companies and industries likewise are looking for ever-more competitive ways to succeed, by developing and incorporating creative and useful innovations into products and services that we all benefit from and enjoy in virtually every area of life. Intellectual property (IP)– the copyrights, patents, trademarks and other similar rights upon which creative and innovative products and services rely upon – have an important role in growing the economies of developed and developing countries all over the world.5 IP protection benefits the economy, promotes innovation, helps firms monetize their innovations and grow, helps small and medium enterprises (SME), and finally it benefits consumers and society. This is the patent bargain: the trade-off between short term monopoly and long-term social service by bringing innovation to market. The monopoly on commercialisation encourages firms to innovate and profit (and so for the purposes of this article drives the economy).
The macroeconomic effects of IP:
Sectors that rely on IP protection are contributors to the economy. For example, according to a study by the EU IPO IP-intensive industries generated 29.2% of all jobs in the EU during the period 2014-2016 with 11% being patent intensive industries. In addition, another 21 million jobs were generated in industries that supply goods and services to IP-intensive industries. Over the same period, IP-intensive industries generated almost 45% of total economic activity (GDP) in the EU, worth €6.6 trillion out of which patent intensive industries accounting for 16%. It is also interesting to note that wages in IP intensive industries are higher compared to non-IPintensive industries with this wage premium being 72% in patent intensive industries.6 Also, in the G8 countries, copyright-based industries and interdependent sectors alone account for approximately 4-11% of Gross Domestic Product.7 IP also generates substantial economic activity, employment and growth in developing anddeveloped countries. WIPO and other organizations and economists have done several studies on the economic contribution of patent-related industries in developing countries and found that patent-related industries generate GDP contributions of between approximately 2-6% and employment contributions of between 3–11% of total employment. 8 A more recent study by the OECD has further quantified the benefits of IP protection for foreign direct investment, not just with respect to patent protection but also copyright and trademark. A 1% increase in the strength of patent correlates to a 2.8% increase in FDI. 9 Patents are an engine of economic growth, which is quite evident based on the above evidence presented.
However, it is also important to note that in some instances the analyses simply focuses on quantitative patent data without taking into account the quality of the underlying patents. For example, patents from innovative areas such as artificial intelligence should not be weighted equally to less relevant technologies. Furthermore,the only figures used in some analyses are ones regarding a country’s patent applications. Many years may pass between the patent application and the final grant. Therefore, it is a country’s active patent portfolio and not merely the number of patent applications relevant to economic analysis.
As the ‘knowledge economy’ advances, more and more of the value that firms and the overall economy achieve will come from intangible assets—including IP. IP is on the rise of becoming the currency of the knowledge based economy, helping to promote economic growth, company competitiveness and innovation world-wide.

A primary benefit for future users of the UPC is that legal proceedings in relation to a Unitary patent or a non-opt-out European patent will not need to be divided throughout Europe and can instead be heard by a single court, with judgement applied to the entire territory – potentially 24 countries. This promises to reduce costs and time associated with the litigative process and may minimize the risk of ‘Forum Shopping’ within the E.U., where parties seek to take advantage of differences in the procedures and judgements of national courts. Given the importance of the UPC, we wish to outline the important factors that must be considered by parties when it comes to damage calculations.
Determination of damages: routes
On the 8th July 2022 the UPC’s Administrative Committee adopted the final version of the Rules of Procedure (RoP, accessible here). Those rules offer two routes for determining damages and compensation in the event patent infringement is found to have occurred. Rule 118.1 outlines that “[t]he amount of the damages or the compensation may be stated in the order or determined in separate proceedings”. A successful party can – within one year of the final decision – apply for separate proceedings for the determination of damages (Rule 126). The court may also award interim damages (Rule 119), to “cover the expected costs of the procedure for the award of damages … on the part of the successful party”.
Determination of damages: calculation factors
When seeking to understand what factors contribute to damage calculation we lookto the UPC Agreement (UPCA, available here), which defines the legal basis of court activity. That makes two commitments in relation to the award of damages: (1) the court will instruct an infringer to pay the injured party damages “appropriate to the harm actually suffered … as a result of the infringement” and (2) the court will – as far as is possible – place the injured party in a position as if no infringement had taken place. Additionally, the infringer shall not benefit from the infringement and damages shall somewhat not be punitive.
Having made these commitments the Agreement then seeks to define what the court should look to when calculating damages. The court is to take account of “all appropriate aspects” such as negative economic consequences, which may includelost profits, any unfair profits made by the infringer, and non-economic factors where necessary (for example, damage to a brand’s reputation). The court can also set damages on the basis of royalties that would have been due if the infringer had sought a licence. In a case where the infringer did so not knowingly, the court can order compensation.
Determination of damages: IP valuation expertise
Whilst the UPCA suggests areas of consideration for damage calculation, there remains substantial room for the presence of expert analysis in reaching that calculation. OxFirst Director Dr Roya Ghafele has authored many scholarly articleson patent valuation methods for assessing damages in patent infringement cases before the UPC. This work illustrates three important means of valuation: the income, cost and market approaches. These approaches appear in publicly sanctioned IP guidelines and assist in portraying value in a dynamic manner. All three play a role in delivering effective valuation and OxFirst operates a proprietaryvaluation method which accounts for their advantages. Method selection represents a crucial consideration when embarking upon a valuation and pays particular attention to the utility of the income method as the only method that can incorporate risk as a consideration. Using the income method, patent value is presumed to be based on future returns over the course of the time it retains protection. Whilst the commonly applied method by courts and regulators, the income method requires particular attention to be paid to contextual information and so requires particular expertise for its effective application.
The UPC is well equipped to exercise judgement on patents at question themselves – the technical judges bring the specialist knowledge required for this. Yet when calculating appropriate damages, the UPC will – like other courts – require assistance from patent valuation experts. This will be particularly true when the UPC has to, inevitably, consider FRAND cases. In these cases, debate has already been established around defining a royalty base, either the smallest saleable practicing unit (SSPU) or the entire market value (EMV). The choice of royalty base is decisive in calculations of appropriate FRAND rates as, in most cases, damages are calculated by factoring a royalty base with a royalty rate to establish a valuation. Patent valuation expertise will therefore be especially valuable in such circumstances.
Yet in all cases where damage calculations must be made as a consequence of infringement, well evidenced, well communicated and clear expert patent valuation analysis is potentially worth a great deal. OxFirst remains an experienced specialist in patent valuation for litigation.

Last week, Professor Adam Jaffe (Brandeis University, USA & Motu Economic and Policy Research, New Zealand) joined OxFirst for a presentation assessing the implications on the patent system from the rise of inventions created by AI.
The subject is topical; we’ve previously covered Thaler -v- Comptroller, a case to be heard by the UK Supreme Court relating to an AI that generated two inventions and a dispute following the AI being listed as an inventor, and we’ve considered non-human inventions from a patent valuation perspective.
The talk was founded on a dual premise that: (1) AI systems soon will be (or already are) making inventions, and (2) the patent system as it stands is not ready for that. Whilst patent law in most jurisdictions does not make allowances for AI to be an inventor, and that position looks likely to hold, Professor Jaffe suggested it is both unavoidable and undesirable to seek to halt the rise of AI invention machines. A change in the law will likely be required.
It is theorised that AI would be capable of creating inventions at a very low marginal cost and in substantial number. Should those inventions be patentable, either because the law changes to accommodate AI as an inventor or because AI owners exploit the indistinct line between machine-assisted invention and machine-generated invention to list themselves as inventors, patent offices could be flooded with new applications. It is important, therefore, to discuss how AI inventions relate to the fundamental goals of the patent system. A predictable and fair patent system, and one that incentivises innovation are obviously desirable, yet it is on the goal of protecting investments that develop an invention to a marketable product or process that is particularly interesting.
In a previous article considering AI inventions, OxFirst speculated that AI inventors would lead to ‘invention factories’ – businesses who produce patentable inventionsusing their AI invention machine and sell or license those patents to others who exploit them to bring patents to market as products. We can therefore envisage a scenario with three elements: (1) AI inventors producing many more inventions each year than are currently created, (2) we assume patent offices are able to keep up, and so many more patents are granted on these inventions each year, and (3) those patent owners are unwilling or unable to exploit those patents and bring products to market. In this scenario, a substantial patent marketplace emerges.
This raises important questions for patent valuation. In any market, value is most simply determined by what someone else might pay for a product, and therefore an increase of supply (patents) into that marketplace depresses the value of each individual item given the increase in choice for buyers. Comparative IP valuation methods may need to adjust to account for this if the comparison is based on a different, non-AI generated, patent marketplace. Yet, each potential buyer of patents will have different capacities to exploit different types of patents – a chemical manufacturer has no use for a patent relating to the production of bread, for example. Increase in supply therefore, may not substantially depress value. We must also keep sight of the importance of a patent’s quality to patent valuation. A high-quality patent – by which we mean one with a long term of protection, substantial coverage and strong potential commercial gains when properly exploited – remains a valuable item whether created by a human or AI. Identifying those patents will be crucial for commercial success in an AI invention landscape.
Should a patent marketplace emerge as we have speculated, the demand for effective patent valuation to complement patent-related dealmaking will rise. Moreover, with so many patents potentially on offer, the importance of good patent valuation only grows. The problem for patent valuation therefore may be the same as for the patent offices – volume. The skills, however, remain the same. Patent valuation experts who can identify and understand market outlooks, growth implications and draw valuable insights from the comparative deal landscape to make well-founded, accurate and commercially useful judgements on these patents will be invaluable.
We are very grateful to Professor Jaffe for sharing his ongoing work with us. The question of AI inventions and how they fit into the patent system is an important and fluid issue. This talk demonstrated both the considerable interest in the area, and the need for open-minded thinking about how we might negotiate the problems and opportunities raised by AI inventions to achieve the greatest benefit from them.
The full webinar is available on OxFirst’s YouTube channel: https://www.youtube.com/user/Oxfirst.
OxFirst’s discussion article on non-human inventions from a patent valuation perspective: https://oxfirst.com/insights-&-news/thaler-v-comptroller-a-patent-valuation-perspective-on-non-human-inventions/.

Most people recognise the utility of patents to be the exclusivity, albeit temporary exclusivity, they impart on their owners to profit from an invention. Yet patents also hold real value for companies that may not even sell a product yet: they can help in the quest for capital.
At present there is often a difference in approaches to patents depending on the industry. For the chemical or biotechnology industries, patents are vital intangible assets. In others though, for example software start-ups, a patent strategy might not be so high on the list of priorities. Yet patents ought to be important to all innovative enterprises looking to bring something new to the market.
Once start-ups run out of friends and family to seek funds from, they often turn to early-stage venture capital firms as a source of funds. For example, OxFirst has helped a young innovative company in the SaaS – Software as a Service – space access further capital. The patent valuation we undertook helped the firm access over 25 Million UK Pounds in funding. The patent valuation served as a substantial instrument to communicate the value proposition of the firm to investors.
Investors looking to assess the risk/return profile of early-stage technology often content themselves with a simple Freedom to Operate search. However, a patent valuation goes way beyond such simple question. It allows an assessment ofpotential revenues associated with the intellectual property while at the same time supporting senior management decisions.
As this simple example illustrates, not only venture capital firms, but also investment banks, high net worth individuals and family offices may be prepared to finance otherwise risky technology ventures, provided the patent valuation allows them to get a better understanding as to what they may be getting themselves involved in.
Patents go a long way to mitigating the risk assumed by venture capital firms, and therefore making the start-up a more appetising investment opportunity by ensuring the future product they are investing in cannot be copied by another and a return can be made on that investment. The patent valuation can again help to size markets related to patents. There are several ways a patent valuation can be undertaken. Often one turns to the market, income or cost approach. In the case of start-ups, the early-stage nature of the firm often requires further assumptions, quite simply because markets are yet to be grasped. In an IP valuation this is often reflected in the risk rate.
The same basic logic also applies to later stage venture capital funding. A business need not have a product on the market to make themselves appealing to investors, a patent can be enough.
Should a business choose to go public through an IPO later in its life, knowledge that a company’s intellectual property is adequately managed and used to maximize revenues, will be an important element in enticing investors and driving up the potential funds from entrance to the stock market. Further use cases of a patent valuation can be the support of licensing revenues, technology transfer, transfer pricing and fostering a firm’s reputation.
Some estimations put 80-90% of a firm’s value in its intangible assets, of which patents are a component. That’s potentially a lot of money in the event of a sale. In 2021 Elon Musk’s Tesla bought Springpower International, a small Canadian start-up working on battery manufacturing technologies. At the time, Springpower had patents pending on core technologies – those patents changed ownership to Tesla following the purchase. Whilst by no means the only motivator behind the purchase, Tesla acquired Springboard’s employees and their expertise too, it is obvious the intellectual property was an important driver behind Tesla’s decision.
Patents, then, are crucial throughout the full business lifecycle: from sourcing initial intuitional funding through to selling the company. A patent valuation can help realise these opportunities and render otherwise intangible assets into tangible business opportunities. Business owners should take advantage of the opportunities it presents.

The Unified Patent Court (UPC) has announced the appointment of 85 judges to the court, as well as announcing the composition of the UPC’s Presidium following election.
The court will be led by Mr Klaus Grabinski as President of the Court of Appeal and Ms Florence Butin as President of the Court of First Instance. The Presidium is further composed of two Court of Appeal Judges and three Court of First Instance Judges.
Seven judges have been appointed to the Court of Appeal, and twenty-seven appointed to the Court of First Instance in the various divisions: Paris, Munich, Vienna, Brussels, Helsinki, Düsseldorf, Hamburg, Mannheim, Milan, The Hague, Lisbon, Ljubljana and the Nordic-Baltic regional division comprising Sweden, Estonia, Latvia and Lithuania. The post for the Copenhagen local division is yet to be filled.
In addition, 51 technically qualified judges have been appointed by field of technology: biotechnology, chemistry and pharmaceutics, electricity, mechanical engineering, and physics.
The complete list of appointments:
Appointed to the Court of Appeal:
• Mr Klaus Grabinski (DE)
• Ms Françoise Barutel (FR)
• Mr Peter Blok (NL)
• Ms Emanuela Germano (IT)
• Ms Rian Kalden (NL)
• Ms Patricia Rombach (DE)
• Ms Ingeborg Simonsson (SE)
Appointed to the Court of First Instance:
Seat of the central division in Paris:
• Ms Florence Butin (FR)
• Mr Paolo Catallozzi (IT)
• Mr Maximilian Haedicke (DE)
• Ms Tatyana Zhilova (BG)
Section of the central division in Munich:
• Ms Mélanie Bessaud (FR)
• Ms Ulrike Voß (DE)
Local division Vienna:
• Mr Walter Schober (AT)
Local division Brussels:
• Mr Samuel Granata (BE)
Local division Helsinki:
• Mr Petri Rinkinen (FI)
Local division Paris:
• Ms Carine Gillet (FR)
• Ms Camille Lignieres (FR)
Local division Düsseldorf:
• Ms Bérénice Thom (DE)
• Mr Ronny Thomas (DE)
Local division Hamburg:
• Ms Sabine Klepsch (DE)
• Mr Stefan Schilling (DE)
Local division Mannheim:
• Mr Holger Kircher (DE)
• Mr Peter Michael Tochtermann (DE)
Local division Munich:
• Mr Tobias Pichlmaier (DE)
• Mr Matthias Zigann (DE)
Local division Milan:
• Mr Pierluigi Perrotti (IT)
• Ms Alima Zana (IT)
Local division The Hague:
• Mr Edger Brinkman (NL)
• Ms Margot Kokke (NL)
Local division Lisbon:
• Ms Rute Lopes (PT)
Local division Ljubljana:
• Ms Mojca Mlakar (SI)
Nordic-Baltic Regional Division (EE, LT, LV, SE):
• Ms Kai Härmand (EE)
• Mr Stefan Johansson (SE)
Technically qualified judges appointed by field of technology:
Biotechnology:
• Mr Arwed Andreas Burrichter (DE)
• Mr Eric Enderlin (FR)
• Mr Rainer Friedrich (DE)
• Mr Paolo Gerli (IT)
• Mr Krister Karlsson (FI)
• Mr András Kupecz (NL)
• Mr Roman Maksymiw (DE)
• Mr Cornelis Schüller (NL)
Chemistry and Pharmaceutics:
• Mr Michael Alt (DE)
• Ms Kirsikka Etuaho (FI)
• Mr Renaud Fulconis (FR)
• Mr Rudi Goedeweeck (BE)
• Mr John Meidahl Petersen (DK)
• Ms Stefanie Parchmann (DE)
• Ms Laure Sarlin (FR)
• Mr Casper Struve (DK)
• Mr Steen Wadskov-Hansen (DK)
• Ms Carola Wagner (DE)
Electricity:
• Mr Pascal Attali (FR)
• Mr Eric Augarde (FR)
• Mr Bertrand Cochet (FR)
• Mr Grégoire Desrousseaux (FR)
• Mr Alain Dumont (BE) (take up of duties as of 1 Nov 2023)
• Mr Dennis Kretschmann (DE)
• Mr Alessandro Sanchini (IT)
• Mr Andrea Scilletta (IT)
• Mr Simon Walker (FI)
Mechanical Engineering:
• Mr Michel Abello (FR)
• Mr Uwe Ausfelder (DE)
• Mr Koen Callewaert (BE)
• Mr Giorgio Checcacci (IT)
• Mr Paolo Ernesto Crippa (IT)
• Mr Claus Elmeros (DK)
• Mr Frédéric Gaillarde (FR)
• Mr Bernard Christiaan Ledeboer (NL)
• Ms Elisabetta Papa (IT)
• Mr Martin Schmidt (FR/DE)
• Mr Uwe Schwengelbeck (DE)
• Mr Max Tilmann (DE)
• Ms Marie-Paule Vandeberg (BE)
• Mr Patrice Vidon (FR)
• Mr Pascal Lucien Pierre Weber (FR)
• Mr Stefan Wilhelm (DE)
Physics:
• Mr Michael Fleuchaus (DE)
• Mr Anders Max Hansson (SE)
• Ms Ulrike Keltsch (DE)
• Mr Gérard Myon (FR)
• Ms Dörte Otten-Dünnweber (DE)
• Mr Andrea Perronace (IT)
• Mr Christoph Dominik Schober (DE)
• Mr Patrik Rydman (SE)

The Institute of Electrical and Electronic Engineers (IEEE) has announced a change to its IPR policy in relation to standards which will take effect from 1st January 2023.
The changes relate to Standard Essential Patents (SEPs) which patentees agree to license to downstream innovators on a fair, reasonable and non-discriminatory (FRAND) basis. These changes hold relevance to FRAND royalty rate determinations. A press release from IEEE stated these changes “are intended to improve the clarity of IEEE’s standard processes relating to patented technologies, while offering more options for stakeholders”.
IEEE’s changes relate to the Reasonable Rate definition within the Bylaws (accessible here, p.2). They have implications for the choice of the royalty based in a FRAND royalty rate calculation and relate to the bigger picture as to what is FRAND. practicingPP
The Adequate Royalty Base in the FRAND Royalty rate valuation
The choice of a royalty base is decisive in the calculation of an appropriate FRAND royalty rate. The debate has focused on deciding whether the smallest saleable practicing unit (SSPPU) or the entire market value (EMV) is the most appropriate methodology.
And as in many cases, damages are calculated by factoring a royalty base with a royalty rate; the value of the royalty base is of substantial importance. In the SSPPU approach, the price of the component which houses the SEP technology is used as the calculation base.
On the other hand, if the conditions for EMV is met and the technology is concluded to be the primary driver of demand to the entire end-product and the primary contributor to the functionality, the entire market value approach is used.
The SSPPU methodology originates from a suit between Cornell v. Hewlett Packard Co. where the Plaintiff initially sought damages based on the end-product, but later had to change its claim as the court held the end-product as an inappropriate royalty base, concluding that calculation must be apportioned down to “the smallest saleableinfringing unit with close relation to the claimed invention.”
Shortly after, the same reasoning would be echoed in Lucent Technologies, Inc. v. Gateway, Inc where the court concluded that there was no evidence that the infringed feature in question drove the entire demand for the end-product and therefore a calculation with the end-product as the royalty base would be misplaced. In Lucent v. Gateway, as in Cornell v. Hewlett Packard, decisions did however leave the door open for the future usage of the end-product as a royalty rate while calculating damages. More specifically, in Lucent, the court concluded that there was ‘nothing inherently wrong’ with using the end-product given that the proportionate value of the infringed feature or component to the product is taken into account.
What the changes are about and how they affect the valuation of patents
We think it is valuable to show these amendments in full, with the changes italicised. Where eliminations have been made, they are shown with a strikethrough:
““Reasonable Rate” shall mean appropriate compensation to the patent holder for the practice of an Essential Patent Claim excluding the value, if any, resulting from the inclusion of that Essential Patent Claim’s technology in the IEEE Standard. In addition, determination of such Reasonable Rates should include, but need not be limited to, the consideration of:
Some optional considerations for determination of Reasonable Rates are:
- The value that the functionality of the claimed invention or inventive feature within the Essential Patent Claim contributes to the value of the relevant functionality of the smallest saleable Compliant Implementation that practices the Essential Patent Claim or to another appropriate value level of the Compliant Implementation.
- The value that the Essential Patent Claim contributes to the smallest saleable Compliant Implementation or to another appropriate value level of the Compliant Implementation that practices that Essential Patent Claim, in light of the value contributed by all Essential Patent Claims for the same IEEE Standard practiced in that Compliant Implementation.
- Existing licenses covering use of the Essential Patent Claim, where such licenses were not obtained under the explicit or implicit threat of a Prohibitive Order, and where the circumstances and resulting licenses are otherwisesufficiently comparable to the circumstances of the contemplated license.”
The bylaws have also been amended in relation to licence negotiations (p.4). Again, the accepted amendments are shown by italics with eliminations shown with a strikethrough:
“The Submitter and the Applicant should engage in good faith negotiations (if sought by either party) without unreasonable delay or may litigate or, with the parties’ mutual agreement, arbitrate: over patent validity, enforceability, essentiality, or infringement; Reasonable Rates or other reasonable licensing terms and conditions; compensation for unpaid past royalties or a future royalty rate; any defenses orcounterclaims; or any other related issues. The Submitter of an Accepted LOA who has committed to make available a license for one or more Essential Patent Claims agrees that it shall neither seek nor seek to
enforce a Prohibitive Order based on such Essential Patent Claim(s) in a jurisdiction unless the against an implementer who is willing to negotiate in good faith for a license. Seeking further information upon initial notice of infringement or choosing to litigate or arbitrate over any of the foregoing issues, however, does not by itself mean that a party so choosing is unwilling to negotiate in good faith. fails to participate in, or to comply with the outcome of, an adjudication, including an affirming first-level appellate review, if sought by any party within applicable deadlines, in that jurisdiction by one or more courts that have the authority to: determine Reasonable Rates and other reasonable terms and conditions; adjudicate patent validity, enforceability, essentiality, and infringement; award monetary damages; and resolve any defenses and counterclaims. In jurisdictions where the failure to request a Prohibitive Order in a pleading waives the right to seek a Prohibitive Order at a later time, a Submitter may conditionally plead the right to seek a Prohibitive Order to preserve its right to do so later, if and when this policy’s conditions for seeking, orseeking to enforce, a Prohibitive Order are met.”
There are three documents related to these changes: The IEEE Standards Association Board of Governors (IEEE SA BOG) approved proposed updates to the IEEE SA Standards Board Bylaws, approved proposed updates to the IEEE SA Letter of Assurance (LOA) form, and approved proposed updates to the patent policy FAQs. The changes detailed above appear in the Bylaws, but the changes are also reflected in the other two documents.
Take Away
These changes further illustrate IEEE’s desire to review its position on the bigger questions within the SEPs landscape, particularly ongoing debates relating to holdup v. holdout. For valuation professionals these updates are of importance as any FRAND royalty rate calculation needs to consider the IPR policy of the Standard Setting Organization as they govern the standards with which the patents are associated. In particular the choice of the royalty base is an important decision to make in any FRAND royalty rate calculation. By updating its IPR policy the IEEE appears to offer further choices for the valuation of standard essential patents. How this will affect the practice of FRAND royalty rate calculation and IP valuation remains to be seen.

Meta, the parent company of Facebook and Instagram, has been ordered to pay almost $175 million having been found to have infringed patents belonging to Voxer.
The ruling follows a two-year legal battle between the companies with echoes of David and Goliath relating to communications technologies patented by Voxer used in Meta’s Facebook Live and Instagram Live features. Voxer owns the Walkie-Talkie app.
Voxer shared patents and proprietary information with Facebook (as it was then known before a 2021 rebrand) following an offer to collaborate in 2012. That collaboration did not materialise and Facebook Live was launched in 2015 followed by Instagram Live the next year. Voxer alleged both products incorporated its patents, and the Texas jury ruled in their favour and imposed determined the value of damages to be $174,530,785, paid via running royalty. Meta intends to appeal.
US patent valuation for damages reflects lost profits and/or lost royalties. In this case, Voxer and Meta do not compete in the same market and so it is unlikely lost profits played a substantial role in the damage calculation. US Courts often consider at least some of the fifteen factors established in Georgia-Pacific Corp. -v- US Plywood Corp. 1970. The final factor asks that an estimate of the royalty a willing licensors and willing licensee would have agreed to just prior to the infringement be established. This is the “hypothetical bargain” or “willing licensor-willing licensee” framework.
In constructing the hypothetical bargain, juries can take into account considerations, such as comparable licensing transactions, patent value to the defendant, and apportionment. Georgia-Pacific factor 2 accounts for the rates paid by the licensee of the use of similar patents. Factors 8 – 11 concern the patent’s value to the defendant covering such factors as its commercial success and current popularity, its utility over others, the nature of the patented invention including its benefits to users, and the extent to which the patent was used by the infringer. The thirteenth factor concerns the apportionment of realised profits that can be credited as arising out of the infringed patent against realised profits from other elements of the infringing product, such as the manufacturing process or improvements made by the infringer.
Court documents relating to the patent valuation are not available, but we might also safely assume these considerations were incorporated into the jury’s consideration. The case and its outcome (so far, this story evidently has further to run) reiterates the importance of effective valuation. Whilst the financial implications for Meta are perhaps not substantial, the company reported $100 billion in revenue in 2021, for Voxer they will be much more so. This determination has ratified the validity of their US patents and opened a new revenue stream of substantial value.
Expert testimony is required to perform and effectively communicate patent valuations and damage estimations. These conclusions must be well-founded and withstand intense scrutiny throughout the course of litigative proceedings. OxFirst is well accustomed to performing patent valuations for litigation with well over ten years of experience.
Infringed patents: US10142270 and US10511557.
Voxer’s complaint: https://ia801906.us.archive.org/16/items/gov.uscourts.txwd.1099537/gov.uscourts.txwd.1099537.1.0.pdf
Jury verdict form: https://aboutblaw.com/40j.
Georgia-Pacific Factors: https://www.ipglossary.com/glossary/georgia-pacific-factors/#.YzqgmbTMK3A

As other commentators have already noted, the ‘mini-budget’ delivered by new Chancellor Kwasi Kwarteng on Friday (23/09) was anything but mini, carrying £45 billion in tax cuts across a range of instruments. Innovation was a phrase that appeared several times in his speech to the House and, whilst much analysis has already been produced following the budget, we seek to consider what its implications are for IP and IP management more broadly in the UK.
Perhaps the most fundamental point is that these measures have immediately impacted the value of the British pound, which plummeted to a fifty year low. Times remain tough and by all accounts a recession is oncoming. In this environment, the high cost and uncertain return nature of innovative activity, be that R&D or implementation of new technologies, remains risky. Some, particularly those for whom innovation is the business such as Information and Communication Technologies or Pharmaceuticals, will continue to innovate. Others may choose not to.
One of the most prominent announcements was that corporation tax will remain at 19% beyond April 2023. That will be encouraging for business, a smaller tax bill is always better after all. Yet one advantage of the proposed rate rise would be the increase in relative advantage imparted onto innovative businesses able to exploit the Patent Box tax regime.
The Patent Box is a preferential tax regime which seeks to reward businesses who keep R&D and the commercialisation of resulting IP within the UK by offering a lower rate of corporation tax on profits derived from that IP. That rate is currently 10%. Initially an Irish creation, there are now several such schemes in operation across Europe, and most states have some facility for encouraging R&D. At the core of the Patent Box Regime is an adequate valuation of patent rights.
The patent valuation under the Patent Box is very much business dependant; those that use patents intensively stand to benefit the most from it, obviously. A simple cut in corporation tax rate benefits all business. However, the patent valuations enabled under the Patent Box regime, allow companies to better appreciate the commercial opportunities associated with intellectual property; an area many businesses still strive to come to grips with.
The new Chancellor appears to like innovation, seeing it as integral to the Government’s growth goals. He sees the cancellation of corporate tax rate rise as a means to allow businesses to “keep more of their own money to invest, to innovate and to grow”. He is keen that financial instruments, notably pensions, be “unlocked” and used to support “innovative, high-growth businesses” and particularly UK science and technology start-ups. This once more underlines the necessity to adequately value intellectual property.
Patents are crucial for business; they protect the innovations upon which a businessis built upon and assist in raising capital. It is perhaps therefore surprising that the Patent Box has not featured in the Chancellor’s moves against taxes immediately. The Patent Box regime can be a means of targeted support for many enterprises. A cut in the Patent Box rate would achieve exactly the Chancellor’s aim with the adjustment to corporation rates: allow more money to be retained for utilisation into further innovation and growth. Preserving the regime, to the contrary, appears to be a good means to assure sustainable IP management strategies.
Perhaps another ‘mini’ intervention will recognise this potential.

Dr. Ghafele’s paper, ‘A valuation perspective on the FRAND injunction issued in Unwired Planet vs Huawei’ has now been published. The paper can be read at: https://authors.elsevier.com/a/1fgzpdA7TeK1b.
Abstract:
On August 26, 2020 the UK Supreme issued a landmark decision in the matter of Unwired Planet vs Huawei. The decision revolutionised the debate on standard essential patents as the Court held that a Global FRAND (fair, reasonable and non-discriminatory) rate can be sanctioned with an injunction in/the U.K. Against this background the article assesses whether the issuance of an injunction in that case was commensurate with the FRAND licensing rate set by the Court itself. In doing so, the article builds upon the valuation approaches contained in the judgment itself. It does so, by comparing the value of the injunction to the implied FRAND value of the SEPs that caused the British injunction. Comparing a slightly adjusted FRAND valuation approach accepted by the Court to the direct value of the injunction, shows that the direct value of the injunction outweighs the estimated value of the SEPs in question. Whether this is commensurate with the FRAND commitment should be further examined.

OxFirst joins the nation, the Commonwealth, and the world in mourning the passing of Her Majesty Queen Elizabeth II. Her era-defining reign was characterised by devoted public service and absolute dedication to the United Kingdom. Through official activities, charitable works, moments of great national celebration and great sorrow, she has remained a fixture of our lives. Her stoicism, her grace, and her sense of duty to all subjects throughout the world shall be sorely missed. We extend our heartfelt sympathies to the Royal Family at this most challenging time, in particular to His Majesty the King.

The UK’s Supreme Court will consider the appeal of Stephen Thaler in the case of ‘Thaler -v- Comptroller-General of Patents, Designs and Trade Marks’.
The case centres on the question of whether a non-human can own IP. It is a question that has been asked before: between 2011 and 2018 a series of (frankly humorous) disputes took place to determine if a monkey owned the copyright on an image it took of itself.
Thaler -v- Comptroller is more serious. In 2018, Dr. Steven Thaler made two patent applications which named an AI of his creation, ‘Device for the Autonomous Bootstrapping or Unified Sequence’ (DABUS), as the inventor. Following rejection of these patents by the Comptroller, the case was taken to the Court of Appeal. The appellate court upheld the Comptroller’s decision by determining AI is not a person and Thaler failed to comply with his obligations to identify a person as the inventor. The Supreme Court will now consider the case.
Thaler has, however, already had success elsewhere. In August 2021 South Africa issued a patent listing DABUS as the inventor, and two days later Justice Beach of Australia’s Federal Court ruled in favour of the AI, finding a non-human can be named as the inventor of a patent there. At the same time as the UK Court of Appeal judgement was delivered, the UK Government published its National AI Strategy. It promised to make a formal consultation about potential changes in UK patent law in relation to AI, acknowledging the emerging presence of AI within potentially patentable inventions. For the time being, then, the law is clear; “Machines are not persons … [DABUS] has no right to be mentioned as the inventor”. That may be soon to change as the case is heard once more, and as the Government considers whether current legislation is adequate for a new AI age.
Should AI be determined to be a valid inventor, what are the implications for patent valuation?
Establishing adequate licensing rates will be an important consideration. One would assume that valuations for patents generated by AI would be equivalent to those created by a human, at least initially. There is no reason to suspect that a patent generated as a result of an AI invention would be in some way less valuable than a human equivalent; it would impart the same exclusivity and be subject to the same quality criteria within the patent offices.
Moreover, the criteria for making a valuation assessment will likely remain the same. The potential market impact of a patent, its implications for firm revenue and growth production, and the nature of comparable deals – all features of current valuation practice – would surely apply to those patents generated by AI.
What may see real change, is the sheer volume of valuations that need to be made. It is entirely plausible that ‘invention factories’ could emerge as patent producing AI is put to work. This might see a growth in the conception of patents as articles of trade, not simple exclusionary rights, but we would undoubtedly expect an increase in the requirements for licensing agreements and other arrangements which permit value to be extracted from patents by those who could not otherwise effectively commercialise them.
Thaler’s patents, for example, relate to an emergency warning light and a food container, hardly related areas of production. To what extent these patents have commercial value remains to be seen.
Under these circumstances, the importance of good patent valuations only grows. So too does the requirement for valuation experts who understand the market outlooks, growth implications and comparative deal landscape to make accurate, well-founded judgements on the potential value of these patent portfolios. In a world where AI increases inventive output and patent-related dealmaking rises to meet it, patent valuations really matter. OxFirst remains a leader in this specialised field.
Court of Appeal judgement: https://www.judiciary.uk/wp-content/uploads/2021/10/Thaler-v-Comptroller-judgment.pdf
UK National AI Strategy: https://www.gov.uk/government/publications/national-ai-strategy
Portrait of a female Macaca nigra (Celebes crested macaque) in North Sulawesi, Indonesia, who triggered photographer David Slater’s camera: https://upload.wikimedia.org/wikipedia/commons/4/4e/Macaca_nigra_self-portrait_large.jpg

In a significant step, Moderna will sue Pfizer-BioNTech for patent infringement of mRNA technology used in both companies’ incredibly successful COVID-19vaccines.
Courts in Massachusetts and Düsseldorf will determine if Pfizer’s product infringes on Moderna’s patented technology underpinning the mRNA platform used in both vaccines. Moderna alleges infringement in relation to both the chemical modifications made to mRNA, which act to stabilise it and prevent an immune response, and the lipid shells which deliver the mRNA to the cells. This second element has already seen substantial litigation as others seek a slice of the COVID pie; Arbutus Biopharma Corp. and Genevant Sciences Inc. sued Moderna over this technology, followed by Alnylam Pharmaceuticals Inc. who sued both Modern and Pfizer over a component of these lipid shells.
Of particular importance in this case will be how the courts treat Moderna’s two patent pledges made in October 2020 and March of this year. Initially, Moderna made a public commitment not to enforce patents relating to its COVID-19 vaccine whilst the pandemic was ongoing. In March, that commitment was revised, and Moderna stated it was open to enforcing its patents outside of 92 named low- and middle-income countries (LMICs), or against any manufacturer making vaccines exclusively for that market. Elsewhere, companies would be expected to respect its IP. Analysts suggest Pfizer will, in part, rely on Moderna’s promises not to sue. A key decision for the courts will be whether or not the second, less generous pledge, replaces the first. This determination could have significant impact on patent pledges as a tool of public-interest IP management.
The courts may also be required to decide if the pandemic is ongoing. Moderna’s complaint suggests the pandemic became endemic at some point in early 2022, and it had been made clear once the pandemic was over companies that continued to infringe would be sued. However, major health organisations including the World Health Organisation and the US Center for Disease Control and Prevention (CDC) maintain the pandemic is ongoing.
Patent valuation and damages valuation will be crucial in this case. Analysis by Bloomberg Intelligence suggests that, if successful, Moderna could gain “at least mid-single-digit royalties on past and future Covid vaccine sales”. Given 360 million doses of Pfizer’s vaccine have been administered in the US alone (over 100 million more than Moderna’s product), the company reported adjusted earnings of $7.7 billion and the vaccine was responsible for 60% of sales last year, even such an ostensibly small gain could have substantial financial implications. Further, at the beginning of August the US Government finalised supply agreements with both companies in relation to their omicron boosters. Whilst both deals are for 300 million doses, Pfizer-BioNTech’s initial order is greater – 105 million doses to Moderna’s initial order of 66 million – and the price per dose is greater, $30.48 per dose to Moderna’s $26.36. Moderna’s motivations for engaging in this litigation are therefore quite clear.
Moderna’s move is an aggressive one, and some analysis speculates that Moderna has placed itself at risk of challenge to its patents or a countersuit from Pfizer. Professor Jeremy Sheff of St. Johns University School of Law has suggested Moderna’s patents are broad, something that Pfizer’s lawyers will seek to review. He notes Pfizer is a “large and well-resourced defendant” who will be well motivated to assess the validity of those patents.
This is a case, therefore, with potentially significant implications for not only the finances of the participants, but also for the way pharmaceutical patents are deployed (or not) at times of public health necessity through patent pledges, and for the validity of the very patents Moderna seeks to enforce. Moderna -v- Pfizer will be worth following closely.
The Massachusetts complaint can be viewed at: https://storage.courtlistener.com/recap/gov.uscourts.mad.247673/gov.uscourts.mad.247673.1.0_1.pdf
Standard Essential Patents and Innovation: Call for views

The Intellectual Property Office of the UK (UKIPO) has recently released a landmark report assessing the efficiency of the existing regulatory framework for Standard Essential Patents (SEPs) in the UK. The report is the result of a 12-week consultation process which took place between the end of 2021 and the first quarter of 2022 and involved engagement with industry stakeholders, academic experts, and legal professionals.
SEPs protect technological inventions which are deemed to be essential to implementing a technical standard. As such, technology implementers cannot adhere to technical standards without using patented inventions which comprise those standards. The report reaffirms the importance of creating an efficient regulatory environment for SEPs in relation to the UK’s broader ambition to become a global superpower for science and technology by 2035 and to ensure that the benefits of technical standards are enjoyed by producers and consumers alike.
While much of the evidence gathered in the consultation indicates that the current regulatory ecosystem is evolving, several consulted agencies raised concerns about inefficiencies and anticompetitive behaviour resulting from imperfections in the existing framework. It is perhaps unsurprising that divergent views emerged among those that offered criticisms.
Among considerations of licensing rate transparency, patent pools, and anti-suit injunctions, a great deal of the report focusses on analysing the legal and economic consequences of the existing regulatory guidelines for Fair, Reasonable, and Non-Discriminatory (FRAND) SEP licensing terms. As a voluntary agreement between standard-setting organisations and SEP holders, FRAND licensing terms are crucial for the harmonisation of the private interests of patent holders and the public interests of standard setters and innovators. One of the central findings of the consultation was that the underdetermined nature of the existing regulatory guidelines for FRAND terms has led to substantial misalignments between SEP holders and implementers.
The absence of consensus around what constitutes FRAND terms has led to SEP holders and implementers to accuse one another of adopting anti-competitive behaviours aimed at gaining greater market power in SEP licensing markets. On the one hand, SEP implementers claim that patent holders employ a strategy of ‘holding-up’ licensing agreements by intentionally setting licensing fees above a fair and reasonable rate while threatening implementers with injunctions in the case that terms were not agreed upon. Implementers also raise the issue of information asymmetries resulting from non-transparency among SEP holders who do not disclose the licensing prices of comparable SEP licensing agreements. On the other hand, SEP holders claim that implementers employ a strategy of ‘holding-out’ on licensing agreements in order to delay royalty payments and to put pressure on SEP holders to agree on lower licensing fees than would otherwise be deemed fair and reasonable. SEP holders also point to the disparity in economic resources between holders and implementers as the source of unbalanced bargaining power and legal resources in negotiations and disputes over FRAND licensing.
At the centre of these debates is the question of which reforms will best promote the creation of a competitive, efficient, and innovation-incentivising SEP licensing market. The UKIPO will assess various proposals for regulatory reform in collaboration with other relevant branches of the UK administration before it submits its findings to UK ministers in 2023. While it remains to be seen which proposals the IPO seriously considers as a means to correct for current inefficiencies and the litigious character of the environments, the consultation reaffirms the fact that more can still be done to build out regulatory guidelines for FRAND licensing terms and improve upon the existing SEP regulatory ecosystem.

Why developing countries are woefully short of tobacco harm reduction patent protection?
Originally published on IP Kat. Says Neil Wilkoff: Kat friend Roya Ghafele offers a challenging analysis of why (the lack of) IP protection for harm reduction technologies is contributing to the rise of smoking in the developing world.
Though global public health governance has taken strides against smoking in recent years, the epidemic persists, and nearly 8 million people globally die from smoking-related diseases every year. The economic toll of tobacco is equally striking. The World Health Organization (WHO) estimates that, globally, smoking causes over US$500 billion in economic damage each year. Worst still, smoking is not spread equally, with over 85% of all smokers residing in low- and middle-income countries (LMICs).
From a business perspective, this situation can also not be maintained. No corporation can build a sustainable future on the basis of such circumstances. Given the choice to perish or innovate, the tobacco industry must continue to innovate.
The way forward appears to be technologies that aim to reduce the adverse effects of smoking. Three different technologies have emerged as an alternative to traditional cigarettes. The oldest are smokeless forms of tobacco such as snus. Second are heated tobacco products that heat tobacco sticks in a device, emitting nicotine but not tar. More recently, electronic nicotine delivery systems (e-cigarettes) have been introduced, which heat a liquid nicotine mixture to form vapour that is then inhaled. Though still addictive, by providing nicotine without tar inhalation, these products appear to be a healthier alternative to traditional cigarettes.
Jointly with a technical expert trained at Imperial College London, a preliminary patent landscape analysis was prepared, which looks at these technologies. Patents are often seen as a proxy for innovation and can provide otherwise unavailable information. The Patent Landscape Report study suggests that leading tobacco companies, such as Philip Morris International and British American Tobacco, now maintain large and growing patent portfolios in the claimed tobacco harm-reduction space, with the number of nicotine vapour technology patents published rising by 9.1% annually during the past 10 years. Growth in smokeless tobacco patents was notably slower, at only 1.1% annually. This sounds positive, but there is a growing international challenge.

For market leaders in the developed world, intellectual property investment in many low- and middle-income countries (LMICs) can be a risky prospect. Often local IP institutions are seen as dysfunctional, such that industry shies away from the difficulties associated with protecting intellectual property. Problems associated with enforcing intellectual property, counterfeiting and piracy, do not increase the motivation to invest and spread new technologies in these countries either.
As a consequence, consumers in LMICs can miss out on the latest technology trends. This can be explained by the fact that corporations tend not to disseminate products in countries where their technology does not enjoy patent protection. For the smoking pandemic, this may be particularly problematic as the vast majority of smokers are in LMICs. This untapped opportunity is bad for business as well as public health, yet reversing the current state of play is tricky.
Though patent portfolios are growing in the developed world, preliminary findings of our report suggest that this may not be matched in many LMICs. In particular, no significant patents were filed across the vast majority of countries in Africa and the Middle East, with the only exceptions being Israel, Morocco and South Africa. Contrast that with the United States, where 42,189 patents were registered over the past decade.
Compare those patent registrations to the trends in smoking rates and it tells a concerning story. In 2005, 21% of adults in the U.S. smoked cigarettes, in 2019, that had fallen to 14.0%. This, while in Africa, the opposite trend is happening, with rates climbing sharply across the continent; in some countries, smoking rates are now over 50%. Lesotho, for example, has seen the largest spike in smoking from 15% of its population in 2004 to 54% in 2015.
One constraint is that developing countries are supposed to be Trade-Related Intellectual Property Rights (TRIPS) compliant. This requires them to develop IP institutions, such as patent offices or adequate enforcement agencies and patent courts. Unfortunately, many developing nations are new to the patent system and some may have little knowledge of the importance of IP. Foreign imposed IP systems also rarely reflect the existing local culture or local legal identity. In addition, establishing IP systems is time-consuming and costly – training patent attorneys, judges and patent examiners does not happen overnight.
The tendency is to simply blacklist such countries because they have still to come to grips with TRIPS criteria, but this is unquestionably not the best solution. IP-related development aid is the way forward and provides a possible way out of this dilemma. Historically, such efforts have shown to be rather poorly funded and dispersed around the world. But a concerted global effort to help LMICs come to grips with harm reduction IP could be transformational, save lives and reduce smoking’s crippling impact on already strained health systems.
With intellectual property not getting the attention it deserves, there is a significant risk that the democratisation of alternatives to cigarettes is hampered at the global level.
Any effort to combat the smoking epidemic cannot afford to overlook the importance of intellectual property. Using intellectual property to promote products that aim to reduce the harms of tobacco is a complex enterprise that requires significant political and business will, but it has the potential to be a key resource in combatting smoking in the developing world. In the absence of adequate consideration for the patent system, we risk technology take off at different speeds across the world. This calls for a change of course.
This means, as it currently stands, we risk a significant rise in smoking in the developing world, even as declines in richer countries are observed. This is a sorry state of affairs, which further widens the global health and development gap.
Key words: smoking, tobacco hard reduction, patent protection, low- and middle-income countries
The preliminary patent landscape report is available here

In recent years, we have seen leadership roles drastically transforming to cater, to the needs of the dynamic business environment. Traditionally leadership was under less scrutiny than it is today. At present, leaders have to perform all sorts of roles and duties along with running the businesses. Another challenge added in the leadership role is dealing with pandemic and post-pandemic situations. We can say that numerous leaders were forced to reinvent themselves and their companies to meet the rapid demand. Roya Ghafele, Founder and Managing Director of OxFirst Ltd is the ideal leader who has transformed the Intellectual Property Valuation and Competition Economics space with her vision and sheer determination. “I am fascinated with the economics of intellectual property and competition law. Intellectual property valuation remains by and large understudied and we embarked on a journey to change that,” says Roya.
With the Establishment of OxFirst in 2011, Roya saw the opportunity to fill the gap between intellectual property law and economics. In particular, she saw a massive opportunity for companies to proactively manage intellectual property. Moving from a primarily legal approach to an IP business strategy is the key motivator for the team. ‘Worldwide, the patent volume is continuously increasing, but much IP sits gathering the dust and many firms lack an understanding of the business of IP,’ observes Roya. Since its inception, the company has been able to shake up a well-established legal industry and force legally trained minds to think about the economics of intellectual property.
OxFirst has successfully helped Fortune 100 companies, alongside Law Firms, Private Equity Firms, and Public Institutions around the world unleash the value of intellectual property and foster competition strategy. OxFirst’s Intellectual Property valuations and economic analysis have been instrumental in assessing the value of patent infringements, the economic impact of investments, or the determination of an adequate licensing rate for IP. OxFirst’s valuations and economic assessments have a proven track record of success. They have assured innovators, lawmakers, and investors alike to get a grasp of the economic value of intellectual property, while adequately managing competition concerns. This helped formulate policies, determine business decisions, and execute on mergers and acquisitions.
Meeting current Demands
The IP and Competition space has been characterized by intense patent filing and litigation. Similarly, the new US presidency and Brexit have translated into demand for research on the economic role of intellectual property in the innovation ecosystem. OxFirst’s economic research and IP valuations have been key in meeting these current demands. The company has contributed to formulating the debate and understanding key drivers of economic performance.
OxFirst focuses on two key areas; Intellectual property valuation and economic assessments of intellectual property and competition law. An IP valuation helps to better understand the business dynamics around IP. It is at the core of any managerial, financial, legal, or business decision pertaining to the firm’s technology. Patents, copyrights, trademarks, trade secrets, and more broadly also software and data rights offer a business the opportunity to generate income.
The OxFirst law and economics approach allows clients to get in- depth insights into the economic effects of the law. The company’s IP Valuation allows to uncover this relationship. The practical applications of the firm’s expert analysis can be used in a wide range of use cases. It has for example been used for licensing, sales, litigation, and policy formulation, or the commercialization of intellectual property.

A Team of Experts
Roya and her team at OxFirst have been constantly working towards offering a quality service to clients. Through its IP valuations, OxFirst has helped several companies obtain the capital needed to bring groundbreaking technologies to market. For instance, it has helped, a high-tech firm focusing on enabling super conductivity at room temperature access institutional funding of a significant amount through an IP valuation. Recently, it also succeeded in pulling off a major licensing program for a company specialized in social entrepreneurship. In the spirit of Open Innovation, the company’s IP valuation formed the cornerstone of a business strategy hinged on licensing key IP. In less than six months, the company (a three-men show!) generated over 20 Million Dollars. Furthermore, the OxFirst patent valuation helped sell patents of a distressed European company to a US-based private equity firm. Within 16 weeks, this raised 10 million for the firm.
At OxFirst, the team knows the science that underpins the work:“I think what sets us apart, is that we have our roots in academia. I spent over a decade as both a law and economics scholar at Oxford, Berkeley, and Edinburgh University. In addition, I also worked as an economist for the World Intellectual Property Organization. Very few can claim such a wealth of experience in patent valuation and economics,” says Roya.
The outbreak of COVID-19 redefined the team. They utilized the opportunity to fully digitalize their services and operations. For them, it has been an amazing leap forward for the usage of a whole range of ICT applications. Instead of sitting all in the same office, the team operates across the globe.
The team at OxFirst consists of a highly motivated group of young and dynamic entrepreneurs who are highly focused on offering the best services to their clients. The culture in the company motivates to release one’s own fascination for the economics of innovation. They are always looking to explore more in each scenario.
A Special Message to the Readers
Says Roya, 'this article is not about me. It is about a much bigger challenge: How do we establish an intellectual property economy and how do we make use of patent, copyright, data rights, and trademark valuations to help come to grips with the economic relevance of intellectual property. This is why I offered to contribute to this article.'
Inventing The Future
The team at OxFirst is active in the field of innovation. Innovation is a key driver of growth and also great fun. In doing so, the company is paving the way for a new era. An era, where businesses trade intellectual property like any other commodity. The Intellectual Property valuations OxFirst undertakes will be key in achieving this.
Who would not like to be part of inventing the future?
The futuristic approach of OxFirst has helped in gaining numerous positive testimonials along with several rewards and recognitions. “I am extremely grateful to our clients and colleagues who have voted for us in these various competitions. The recognition of our peers is very important to us. We have worked very hard to achieve the award as ‘Best Intellectual Property Valuation Company’, ‘Best Intellectual Property Management Consultancy’ and ‘Best IP Law and Economics Firm,” asserts Roya. These awards, prices, and recognitions showcase the importance of advancing the state of IP valuation and economic analysis of IP and Competition. “I very much hope that going forward, we will be able to help more people unleash the value of their IP assets and how to go best along in managing them,” concludes Roya.

Oxford, 20th July 2020.
Award-winning OxFirst, a specialist in the law and economics of IP, has released research that reveals the hidden secrets behind global patent registrations and information on the economic value of patents in the AI sector. While Samsung, IBM and Tencent dominate with the highest number of patents filed, fierce competition between the US and China overshadows other countries, including the EU.
Multiple neural nets, ML and speech recognition driving the market
Patents are mainly filed in the area of interconnectivity and system architecture, suggesting that top players focus primarily on protecting technologies covering multiple neural nets. Other areas of crucial importance are Machine Learning (ML) and bootstrap methods, alongside procedures used during speech recognition processes; e.g. the further establishment of human-machine dialogue.
Source: OxFirst internal analysis
An analysis of the patent landscape between 2010 and 2020 shows that patents reading on Machine Learning experienced their greatest filing growth in 2017/2018. During this time period global patent applications increased by over 68%. The research highlights just how important the global market for patents is becoming.
A sector specific analysis suggests that top players focus particularly on AI applications in the medical space. Particularly medical diagnosis, medical simulation and data mining in the medical space appear as key trends. Possibly, the current Covid-19 crisis has triggered further interest in modelling pandemics.
Dr Roya Ghafele, Executive Director of OxFirst explains: ‘To come to grips with market trends in AI, analysts traditionally study the value of corporations and the competitive dynamics within an industry. However, many ignore the fact that Intellectual Property (IP) can fundamentally restructure the economic dynamics between companies.’
Indeed, IP is the currency of the knowledge-based economy. Patents provide innovators with the ability to commercialise their inventions, paving the way for business success.
‘Patents not only bear the potential to empower a company’s unique position in the market, but provide it also with the ability to generate income by licensing or selling patents. Equally, patents allow a company to make substantial savings in R&D when using the IP of others. This can be achieved by in-licensing IP or acquiring IP. As such, patents can be a source of revenue in and by themselves.’
Patent trends in AI
In the last ten years Samsung, IBM and Tencent have emerged as the most important patent owners in AI. Samsung by and large dominates the space with over 5,000 patents worldwide. Important to note is that no European company can be found among the top 20 patent owners Rather, the market appears to be led by Korean headquartered Samsung and sees otherwise fierce competition between US and Chinese firms.
Company
| Patent count |
Samsung Electronics | 5, 073 |
IBM | 2, 062 |
Tencent | 2, 062 |
LG Electronics Inc | 1, 541 |
Microsoft Technology | 1, 388 |
Baidu | 1, 221 |
State Grid Corp China | 1, 027 |
AT&T | 941 |
Ping An Tech Shenzen | 802 |
Intel | 746 |
Source: OxFirst internal analysis
The fight for market share in the AI space is clearly reflected in the geographical assessment of patents. China, the US and the Republic of Korea report most patent filings. Compared to the over 100,000 filings with the Chinese Patent Office, the barely over 5,000 patents filed with the European Patent Office appear negligible in comparison.
Legal limitations in this space should not be ignored, however. In the EU for example, the European Patent Convention has imposed restrictions on software patents. Equally, the U.S. Supreme Court’s Decision in Alice Corp. v. Cls Bank (134 S. Ct. 2347 (2014)) established further boundaries on the eligibility of patent protection for software. Arguably, Chinese patent law may offer further scope for patent protection.
Countries
| Patent count |
China (SIPO) | 106,650 |
United States (USPTO) | 60,003 |
World Intellectual Property Organization (WIPO) | 20,407 |
Republic of Korea (KIPO) | 12, 897 |
Japan (JPO) | 9,682 |
European Patent Office (EPO) | 5,201 |
Australia (AU) | 3,715 |
Canada (CA) | 2,702 |
Taiwan (TW) | 682 |
Great Britain (GB) | 535 |
Source: OxFirst internal analysis
Dr Roya Ghafele, Executive Director of OxFirst concludes: ‘This data suggests that companies are recognising the economic potential of patents. The analysis above helps assess how different patent owners perform in comparison to each other and how the patent space is distributed among them. Match this against a patent licensing rate of 15%, which can be caught across the sector and it becomes evident that even a small fraction of the patents in this space could offer attractive financial returns. This can be achieved by either trading the patents directly or indirectly.
Even a simple assessment suggests that adopting a patent valuation perspective enables educated business decisions. After all, every investors and managers alike are keen to maximise returns while minimising risks. It is time to embrace IP as an asset.
About OxFirst
OxFirst is a boutique consulting firm specialized in the law and economics of IP. We were several times awarded as ‘the best IP Valuation Firm in the UK.’ As a spin out from Oxford University, OxFirst can rely strongly on cutting edge economic insights. We support technology and competition strategy through sound economic analysis.

The UK litigation landscape remains dominated by FRAND disputes. Litigations such as Panoptis vs Apple (UK, 2019), Conversant vs Huawei and ZTE (UK, 2017)[1], IPCom vs Vodafone (UK, 2021) or Mitsubishi & Sisvel v OnePlus, Oppo & Xiaomi (UK, 2021), suggests that the UK is increasingly attracting high value litigation.
The question hence arises what path British Courts will be pursuing to value the standard essential patents at stake. One valuation rationale that English Courts may rely on going forward could be the UK High Court’s Approach to patent valuation in Unwired Planet vs Huawei (UK, 2017). There the court relied primarily on two key valuation approaches. The Top Down and the Comparable Licenses Approach.
The Unwired Planet vs Huawei’s Court choice for these two methods is commensurate with the valuation approaches adopted in other Courts. In Huawei vs Samsung (China 2018), TCL vs Ericsson (USA, 2017) [2], Samsung vs Apple (Japan, 2014) and In Re Innovatio IP Ventures (2013) the Top Down Approach was also used.
The Comparable licenses Approach has also found recognition in various landmark decisions pertaining to standard essential patents. As a method it was for example applied in Microsoft vs Motorola (USA 2013), SK Hynix v Rambus (USA 2013) or TCL vs Ericsson (USA 2013).
Against this background, this article offers suggestions as to how the valuation of standard essential patents could potentially be addressed in pending and future cases pertaining to standard essential patents.
[1] ZTE recently settled with Conversant
[2] I understand that TCL vs Ericsson was vacated. However, it was not vacated on the grounds of its (F)RAND royalty rate determination. Hence, I consider this case nonetheless to offer insights as to how to approach a (F)RAND royalty rate.
The Top-Down Approach
The Top-Down Approach aims at offering an aggregate rate for a given standard. The method requires two steps. First one needs to identify an estimate for the entire standard, then one needs to split this estimate among the various patents that read on the standard. This analysis allows to understand the value of the standard and the relationship of a set of standard essential patents in relation to the whole.
Courts have accepted different ways to come to grips with this analysis. Commonly, public statements made by major standard essential patent owners have been used to come to grips with the value of the standard as a whole. In TCL vs Ericsson, as well as in Samsung vs Apple or in Huawei vs Samsung for example, the total aggregate rate for the standard was identified with the support of public statements made by major Standard Essential Patent Owners.
In Unwired Planet vs Huawei again, the Court referred back to the findings of the Japanese Courts in Samsung vs Apple and used these as an additional cross check for the royalty rate it identified for setting a global FRAND rate.
To furthermore understand the value of a given standard essential patent portfolio, the counting of patents has also been recognized. The Unwired Planet vs Huawei Court for example argued that the counting of patents is a common market practice and hence used this approach to come to grips with the Top-Down approach.
Yet another approach to assess the value under the Top-Down Approach was applied in the ‘in re Innovatio IP Ventures’ case. There the Court based the licensing rate on the average profit of the Wi-Fi chip. Singling out the average profit served the same purpose as setting a total aggregate royalty burden. The maximum amount available for paying royalties would stay unaffected regardless of the number of entities holding and asserting SEPs.
To complicate things further, it is however also possible to start off with identifying comparable licenses and then establish the Top-Down approach on that basis. This was for example done in Unwired Planet vs Huawei. The Court began with the identification of comparable licensing rates and then went on to run a sensitivity check with the support of the Top-Down approach. This allowed the Court to check the risks associated with a potential cumulative royalty stack; even if it were just hypothetical.
The Comparable Licenses Approach
The Comparable Licenses Approach offers different insights on what the value of standard essential patents could be. Rather than seeking to determine the value of the standard as a whole, the comparable licenses approach can help understand the value of a given set of standard essential patents with reference to licensing contracts deemed to be comparable.
In comparison to the Top-Down Approach, the underlying reasoning of the Comparable licenses approach is very easy to understand. It seeks to determine value with reference to ‘others.’ While this does not require much more explanation, the art is to figure out if the comparison to ‘others’ is actually justified. Here, both substantial legal considerations and econometric assessments come into play. Just because a licensing deal was a transaction that actually happened, does not make it a (F)RAND offer or pro-competitive for that matter.
Take Away
Where other FRAND cases could depart from the Unwired Planet vs Huawei’s Court’s reasoning is that they could for example accept the Top Down Approach as a principal method rather than a cross check. The royalty base could also be subject to further debate. It may also be further discussed why the Unwired Planet vs Huawei Court accepted some licenses as comparable and rejected others.
This suggests that existing valuation approaches can be considered a starting point, but the valuation of standard essential patents may require some further thought. If and to what extent additional guidelines can be expected from current FRAND cases remains to be seen. I personally hope these cases won’t settle, so it will be possible to have further insights on judicially determined valuations of standard essential patents.
Professor Roya Ghafele is the Director of law and economics consultancy OxFirst and a Visiting Professor in IP Law with Brunel University London.

In this interview, Dr Roya Ghafele discusses the dire need to value intellectual property. As humanity is in need for a cure for the Corona virus, the adequate assessment of the economic worth of intellectual property is more than ever a necessity.
Dr Ghafele, how would you describe your contribution in the current Corona crisis?
More than ever before has the current Corona crisis shown that there is a need to invest wisely in technology. Humanity is faced with the necessity to find a cure as fast as possible. Possible approaches range from Apps, tracking services to biotech approaches and ultimately new vaccines.
In all of these endeavours intellectual property plays a major role. Patents help protect the technology itself, copyright helps protect code and software, trade secrets offer the protection of strategic business information and trademarks help leverage the brand of a firm. These various forms of IP are crucial for a firm to succeed. In particular, it is the congruence of various forms of IP that help a business to succeed.
Dr Ghafele, What can be expected of an OxFirst IP valuation?
The OxFirst IP valuation helps to better understand these business dynamics. OxFirst’s IP valuation consists of an initial due diligence followed by a strategic assessment of the various opportunities provided by the IP to maximize profits. It also helps manage costs, which many companies may find important in the current situation. OxFirst then makes use of various recognized valuation approaches that give insights on the economic worth of IP.
As a result, companies are often in a position to maximize their business opportunities or attract investors. Private Equity, Venture Capital and Business Angels again are in a position to better assess risks and return. Because OxFirst is an economic consultancy, it can offer insights on IP, which are otherwise not available.
Translated to the current crisis, this may mean that we may be in a better position to leverage IP in search for a cure for Corona.
Dr Ghafele, to sum up, what are the key benefits of engaging you?
OxFirst’s IP valuations have a proven track record of success. They have helped companies of various sizes and stages in their lives maximise revenues, while minimizing costs. At the same time, they have helped investors make educated investment decisions. These advantages are immensely valuable in the age of Corona, where we need to assure every Pound is spent wisely. The path to finding a cure to the virus is invariably interlinked with an adequate analysis of the economic impact of intellectual property.
Dr Roya Ghafele, thank you for this interview.

Q: Dr Ghafele, why is it so important to look at IP from an economic point of view?
A: In the current crisis we cannot afford to lose money. At the same time, we need a solution fast. These goals stand somewhat in contrast to how markets for technology work. Markets to technology are invariably surrounded by risk. Uncertainties pertain to the technological risk itself, financial risks as well as market risks. In such an environment it is instrumental to better comprehend the economic dynamics of intellectual property. OxFirst’s IP valuation can help in such a situation.
Q: Dr Roya Ghafele, how can the valuation of IP help unleash its economic potential?
A: In the current Covid19 crisis it is particularly important to look at IP from an Open Innovation perspective. At present we see a lot of ‘national champions’, but fairly little effort seems to be going into transnational ventures. This is unfortunate as humanity will need a team approach to resolve the puzzle of finding a cure for the virus. The valuation of intellectual property can help opening up such strategies.
Q: Dr Ghafele, can you offer some real word results that have stemmed from your work?
A: Recently we were approached by a biotech firm aiming at regenerating damaged tissue. Their approach is hinged on stem cell research. If successful, it will allow to combat the damage caused by a host of different diseases and potentially even offer an anti-ageing solution.
OxFirst’s IP valuation helped the firm come to grips with Open Innovation. Rather than going solo, we helped them team up with research and business partners around the world to find ways to recreate damaged tissue. The valuation of the IP set the baseline that allowed each partner figure out its share in the venture and allowed it to mitigate against potential risks. OxFirst’s IP valuation was instrumental for the leverage of Open Innovation.
Q: Dr Roya Ghafele, what can we expect from you in next 12 months?
A: The next year will be crucial to help find a cure for Covid19. With the help of my team at OxFirst I hope to be able to contribute with my economic skills and knowledge about intellectual property to help humanity come back to normality.

Why would I engage OxFirst?
Quite simply; because OxFirst (www.oxfirst.com) helps you turn intellectual property into a business opportunity. Our award-winning advisory firm assures that firms, governments, international and supra- national government institutions leverage intellectual property for growth. We do that by offering high quality economic analysis on intellectual property. This enables IP commercialization and IP driven business strategy. Key to our work is sound economic analysis. This helps shed light on otherwise untapped business opportunities. A mere legal perspective on IP is not enough to unleash the untapped wealth of intangible assets.
But, I thought intellectual property is just about the law? Why do you use an economic approach to commercial law?
OxFirst’s aim is to systematically establish the commercial element in commercial law. The global market for patent filing is growing consistently at 10%, but evidence shows that only a fairly small fraction of that IP can be linked to commercial activity!
This IP commercialization gap can to a large extent be explained by the fact that there are not enough economists in this area who can bridge the gap between IP law and economics. This gap means that many firms do not even know the value of their IP assets, let alone how to manage their IP assets for wealth generation. By consequence, much IP sits gathering the dust and IP departments are often perceived as a mere cost center.
So, why value your intellectual property?
- Can you manage what you cannot measure?
- Can you trade if you don’t know what the worth of your assets?
- How can you adequately communicate the value of all your firm’s assets, be they tangible or intangible to investors, if you have not valued them?
The valuation of intellectual property allows a firm to identify the commercial worth of its IP assets, it also helps understand where there are gaps in the portfolio and what steps can be undertaken to commercialize IP. Such commercial steps should not be misunderstood with launching action in case of infringement. In fact, I think that the future of IP lies in taking it out of the Court room and into the Board room. IP based financial transactions need to occur in a free and open market environment and not be determined by Courts. The adequate valuation of IP is a crucial step to achieve this.
Can you give us some examples where OxFirst has succeeded in helping firms win business?
Sure!
OxFirst acted for example as an IP valuation expert in a commercial transaction between a high tech firm and a private equity company. The high tech firm owned some fairly interesting intellectual property, but those had to be first identified. The valuation of the IP was crucial to identify interested trading partners, helped with price formation and was crucial to the commercial transaction.
At another occasion we helped a high tech firm value its IP, so to help investors come to grips with the economic value of its IP. Ultimately, this helped the high-tech firm raise its profile and contributed to letting it do further research in a hot new area of technology by assuring adequate revenue streams for its R&D. These funds were made available because of the perceived commercial value of the IP generated.
As for Governments, our IP valuation led the Republic of Austria to formulating its First National IP Strategy since its first written mention over a thousand years ago! This work is driven by an eagerness to help the country leverages it’s IP as an economic opportunity rather than a negative right.
But can IP even be valued?
Absolutely, yes!
In fact, within the European Union, there is a convergence of opinions among National Patent Offices, Standard Setting Organizations, the European Commission and the European Patent Office that IP can be valued with reference to three paradigmatic approaches: The income, market and cost approach.
Now, certainly, within these three methods one can find many sub-methods and nuances and as experienced IP valuation professionals the OxFirst team will make a detailed analysis first before engaging in an IP valuation.
But, if you want to find out more about IP valuation and IP business for yourself, we also offer accredited training courses on IP wealth generation through the OxFirst Academy. (www.oxfirst.com/academy)
Everybody, welcomed to join!

Could you provide our readers with a brief introduction to OxFirst?
OxFirst is an award-winning law and economics advisory firm founded in 2011 by academics from Oxford University. We offer independent expert testimony on behalf of companies, governments and international organizations, produce authoritative studies for business and public policy formulation and conduct economic analysis in litigation and commercial disputes. Our aim is to integrate high quality economic analysis into the everyday practice of technology transfer, intellectual property commercialization, commercial litigation and public policy formulation in the high-tech area. As such we support intellectual property and competition strategy through sound economic analysis.
Our clients include Fortune 500 firms, as well as national Governments throughout the world, but we also assist start-ups with in-depth economic analysis that allows to fully leverage creativity and innovation as an engine of growth. We believe that breaking away from conventional solutions is a vital asset in streamlining operations to achieve efficient solutions in the 21st century. Our services are outside the box and tailored to the specific requirements of a client.
You’ve recently been awarded as 'Best Intellectual Property Valuation Firm' in the UK; could you tell us something more?
The extremely prestigious prize was awarded by Corporate Finance Magazine ‘Acquisition International’ as OxFirst repeatedly succeeded in commercializing Intellectual Property (IP) through high quality IP valuations. This earned it recognition in the UK 2018 IP Excellence Awards.
OxFirst’s IP valuations paved the way for a better understanding of the worth of IP. This made it possible to not only assess the economic relevance of IP for sales, licensing, litigation purposes and a host of other use cases.
At several instances OxFirst served as an IP Valuation and IP Commercialization expert to the European Commission, the UK Intellectual Property Office, as well as the Austrian Government. Back in 2013, it also prepared a key Expert report on IP valuation jointly with others. The work allowed for the first time to establish a pan-European understanding on how to value IP.
What can be obtained out of your services?
- Valuation of Intellectual Property
One of its flagship projects allowed an early-stage high-tech firm to raise over 10 Million US Dollars on the basis of its IP valuation. At another instance, the valuation of the IP undertaken by OxFirst formed a cornerstone of a patent acquisition, which gave the seller a significant boost to its cash reserves.
- Expert Testimonials for Commercial Disputes, Litigation and Licensing Negotiations
OxFirst has been multiple times involved as an economic expert in commercial disputes, litigation and licensing negotiations. Our economic analysis have formed the cornerstone of price formation in licensing negotiations, have helped Courts identify the adequate value of a damage award and allowed also to assess the economic risk of litigation in mergers and acquisitions.
- Economic Analysis of intellectual property and competition policy formulation
Equally, we have had a substantial contribution to policy formulation. In the copyright space for example, OxFirst economic analysis contributed to the formulation of a New Directive on Collective Rights Management. We did so, by showing that there was a significant gap between what collecting societies could be making from digital licensing revenues and what they are in fact generation from this segment. We estimated the 2012 market for digital music royalties in ten different E.U. countries at well over €18 billion. However, only €116 million were reported by corresponding Collective Rights Management Organizations in that same year. The findings of the study were also published in a well- regarded scientific journal.
What’s the vision that guides you?
Our vision is a world where innovation fuels progress for everyone. A world, where people develop their creativity freely, where businesses realize their full economic potential through innovation and where Governments provide the necessary institutional framework that enables these activities.
At OxFirst we maintain a strong interest in the evolving role of IP in the knowledge-based society, but also passion for training and education, as well as an overall drive to explain to a wide audience the decisive role IP can play for transformative and disruptive future technological innovations.
Our expertise, experience and ideas help clients to address the new challenges of the 21st century and embrace the transformative changes needed to find winning solutions in the IP economy. As such, we are keen to raise awareness about the opportunities and pitfalls associated with the IP economy beyond a narrow circle of experts, which in turn gives us the chance to discuss an overlooked question on which most people lack awareness
What are your plans for the future?
IP bears the potential to be the currency of the knowledge-based economy. At the same time, it has been the source of much criticism. At OxFirst we seek to come to grips with a concept which has by and large not been yet understood for what it is worth. Hence, it is so crucial to understand the value of intellectual property from an economic point of view and identify key models of IP driven value capture. In a wider sense, we seek to identify how the introduction of intellectual property rights over technologies can be used to foster inclusive growth and what corresponding business and policy measures and strategies are need to achieve this.
As such, intellectual property (IP) alongside considerations for competition law, will play a key role in upcoming technology spaces such as Artificial Intelligence, Big Data or the Internet of Things and we at OxFirst seek to address how various approaches to IP and Competition strategy and policy can lead humanity to a better social and economic context.

The dire need for a cure for Corona illustrates the necessity to come to grips with the valuation of intellectual property. There is neither time nor budget to waste. Ideally, a straight forward solution should be found in the next couple of months, if not even weeks.
Yet, and here lies the dilemma, markets for technology don’t work like that. Technology development is riddled with uncertainty. Risks stem from the technology itself, which may not be viable after all, as well as macroeconomic and financial risks; to name a few.
Because creative learning is central to innovation processes it is also difficult to predict how much money will be needed to create viable long-term technology solutions. Penicillin was discovered by mere coincidence and when 3M aimed at finding a glue that would stick really well, it discovered a glue that did just the opposite. Then again, there are those examples where millions are spent and in spite of that the technology is ultimately abandoned.
Intellectual Property which is adequately valued can in such contexts help. While the valuation of intellectual property can do little to prevent such risks, it can help enhance transparency. This in turn allows to better manage a firm and make enhanced investment decisions.
Intellectual property protects various different business segments. Patents protect the technology itself, copyright helps protect code and software, trade secrets offer the protection of strategic business information and trademarks help leverage the brand of a firm. These various forms of IP are crucial for a firm to succeed. In particular, it is the congruence of different forms of IP that help a business to succeed. The valuation of IP helps shed light on the many tactics a company has at its disposal to leverage synergies. At the same time, it can help manage risk. This helps attract investments and enhance ROI (return on investment).
IP Valuation works in Practice
I have had many opportunities to show that such approaches work in the real world. Just recently I undertook the valuation of a tech start up specialized in urban mining. The firm focuses on extracting valuable materials from electronic trash. In doing so, it addresses a massive environmental challenge, while at the same time opening up previously unknown business opportunities.
The IP valuation I undertook helped the firm reorient its strategy. The IP business strategy set the baseline for a massive increase in revenues. At the same time, it helped the firm minimize its operational costs.
Quite simply, this was possible because of the immaterial nature of IP. Trading in intangible assets is a good deal more cost effective than in tangible property rights. Such approaches may also work for firms specializing in a cure for Corona. An IP valuation can help a firm save costs, increase returns and enhance its technology strategy. At the same time, an IP valuation helps investors make educated investment decisions. These advantages are immensely valuable in the age of Corona, where we need to assure every Pound is spent wisely. The path to finding a cure to the virus is invariably interlinked with an adequate analysis of the economic impact of intellectual property.

Under the leadership of Dr Roya Ghafele OxFirst has been for the third time in a row awarded the prestigious prize as ‘Best IP Valuation Firm in the UK’ by the Global 100 Award. According to Global 100, ‘the award consists of only 100 of the world’s leading firms and individuals. The purpose of the Global 100 is to provide a comprehensive understanding of those firms that are truly leaders within their chosen areas of specialisation.’
‘I thank our clients and those who voted for OxFirst for their long-standing trust. This award underlines the importance of an economic perspective on intellectual property. It shows that the valuation of IP opens up technology approaches, which are simply not available under a mere legal view,’ says OxFirst Managing Director Roya Ghafele. She continues to explain that ‘the big challenge ahead of us is to raise further awareness on the economic worth of IP. Too many firms miss out on business as they can’t relate patents to cash flow. An IP valuation helps to make such relations visible.’
A good example of OxFirst’s success was its IP valuation for an AI firm focusing on conversational software. The IP valuation formed the cornerstone of the relationship between the private equity firm and the AI company. It also helped the AI firm restructure its debt and look at its business strategy from a fresh perspective.
At another instance, the OxFirst IP valuation helped structure an acquisition in the area of autonomous vehicles. The IP valuation allowed to assess any potential anti-competitive dynamics that the acquisition could trigger and also assisted in the determination of a price for the patented technology. Most recently, OxFirst’s IP valuation enabled the formulation of an IP strategy for the recycling of electronic waste. With millions of cell phones, tablets and PCs thrown away every year, the question of how to recover potentially useful resources from such trash is essential.
OxFirst helped by assessing the economic value of the patents and assisted in formulating a licensing program. This was undertaken in the spirit of social entrepreneurship.
OxFirst is an advisory firm specialized in law and economics. Its expertise covers IP valuation and strategy. Dr Roya Ghafele is an accredited damage expert. She worked an economist with WIPO, the OECD and McKinsey Info@oxfirst.com, www.oxfirst.com

Q: Dr Ghafele, you have been multiple times awarded as a Top IP Valuation Expert. What differentiates your work at OxFirst from that of others?
A: The OxFirst IP valuations have systematically allowed firms to maximize their economic interests. The reason why the OxFirst IP valuations are so successful is that they communicate in a swift and simple manner why IP matters to the company. They put a monetary value on intellectual property. This turns otherwise intangible assets into a tangible business opportunity.
The valuation methods OxFirst has developed over the years offer its clients unique economic insights on their legal position in the technology space. I am not aware of any other company that has consistently been in a position to offer such instrumental insights.
OxFirst is at the forefront of latest thinking on intellectual property and can in a swift and uncomplicated manner combine business acumen with legal know-how.
Q: Dr Ghafele, according to Global 100 OxFirst is among the Top 100 in its field. How did you achieve such strong results for OxFirst?
A: This award illustrates how highly satisfied our clients are with our services. It is an expression of their trust and the confidence they have in our services. Such a success would however been impossible without the commitment of the OxFirst team and I would also like to thank them for their dedication and hard work.
This award is however also an ample illustration of the fact the companies are increasingly keen on getting a grasp of the economic worth of intellectual property. It is only through the lens of an IP valuation that companies are in a position to fully extract value from all their assets; be they tangible or intangible in nature. I feel very privileged that the OxFirst IP valuations are a key part of this.
Q: Dr Ghafele, what is an IP valuation and what is its meaning to business?
A: An IP valuation is an economic assessment of legal rights. It is based on a thorough economic analysis of various forms of IP. It draws upon technical, legal and economic data and combines these insights in a way that they offer a firm to make ample decisions on their business strategy. An IP valuation is a central element of a business strategy. It offers quantitative insights on the value of patents as well as other forms of IP. Often it also allows to understand the effects that a litigation could have. In legal disputes it can also provide insights on the costs of an injunction and the worth of a potential damage award.
Q: Dr Ghafele, what are the various use cases for an IP valuation?
A: An IP valuation can be used to identify the worth of a licensing rate, it can also help a company get a better understanding how to optimize its IP portfolio. In particular it offers insights on what IP to hold on tightly to, what to divest and what to use for joint ventures, collaboration or further exchange. It can also help a company with insights as to how to orient its overarching business. Technology is central to most firms we work with. An economic understanding of the underlying rights to the technology allows firms to better leverage technology for their own benefit. Often, IP valuations allow start-ups and scale-ups to attract funding. After all, the IP is the only asset they have.
Q: Dr Ghafele, what role can IP valuations play in contentious work?
A: Legal disputes are decided on the merits of the case. Economic arguments can be crucial in this exercise. Often IP infringement is established, but where opinions diverge is as to the economic harm the infringement has caused. As an accredited court expert, I strive to offer unbiased insights.
Q: Dr Ghafele, does the world need more data on the value of IP?
A: Without an economic understanding on the worth of IP companies are unable to leverage all means possible to generate and preserve business. They are reducing their business opportunities and this can mean that they lose out on their competitive edge. The economic insights provided by an IP valuation are crucial to turn IP into commercial assets. IP, being genuinely associated with R&D is mainly seen as a cost. The valuation of IP can change that and turn IP into a viable business asset.
Managing Director
OxFirst Ltd
www.oxfirst.com | info@oxfirst.com
Dr Ghafele has been the Director of OxFirst, an award-winning law and economics consultancy, since 2011. In addition, she has held a Lectureship (Assistant Professor) in International Political Economy with Oxford University and was also a tenured Lecturer (Assistant Professor) in Law with Edinburgh University. Prior to that, she had post-doctoral assignments at Harvard and U.C. Berkeley. From 2002-2007 she worked as an Economist with the World Intellectual Property Organization (WIPO) and the OECD. She started her career with McKinsey in corporate finance. Her PhD was awarded the Theodor Koerner Research Prize by the President of the Republic of Austria. Dr Ghafele was trained at Johns Hopkins University, School of Advanced International Studies, the Sorbonne and Vienna University. During the course of her studies, she was fully funded by the Austrian Government because her academic merits were continuously of outstanding quality. She is native in German and fluent in English, French and Italian. Specialities: IP valuation, Damage Calculations, Competition Law & Economics, Royalty Rate Determination, Economic Assessment of Legal Contexts, IPR

With a rapidly growing market that offers both, attractive returns on investment and the genuine ability to transform the way humans and machines interact with each other, I was keen to understand the economic value of patents reading on Conversational Artificial Intelligence.
Patents offer strategic insights, yet they are often overlooked by the business and investor community. Classified primarily as an esoteric field of law, the economic analysis of patents has gone by and large unnoticed.
I see things differently. I look at patents as an economic asset that helps generate income. Patents offer key intelligence, which is nowhere else available. Combined with economic data, this allows one to forecast market trends based on patents. It also opens up opportunities to commercialize patents. Such business opportunities can be detached from the classical approach of investing in companies, which may or may not be solid from a patent perspective.
Conversational AI – Exciting Upward Potential
Conversational Artificial Intelligence is on the rise. The market for Conversational Software is a prime example of platform businesses that thrive in the spirit of Open Innovation. Players, such as Apple or Google focus on digital assistants, but the market is also populated with Chatbots and voice experience technology.
The advantages for consumers are important. Say you want to book a holiday in Spain. Instead of filling out complicated forms online, you can simply have a chat with your computer, which can then point you to the holiday of your dreams, following a brief chat.
Analysts estimate a deal volume of 15.7 USD Billion and a Compounded Annual Growth Rate (CAGR) of 302% by 2023. (data does not reflect potential effects of Covid19).
While companies in the space seek to monetize on data generated during this process, patent ownership remains instrumental to fence one’s tech space.
A Brief Description of the Patent Space
The OxFirst analysis suggests that there is tough competition between the United States and China, with patents filed in the Republic of Korea emerging also as a key market.
Top countries where AI patents were filed in the last 10 years
Countries
| Count |
United States (USPTO) | 7615
|
China (SIPO) | 5581
|
Republic of Korea (KIPO) | 1387
|
Source: OxFirst internal analysis[1]
A look at the key patent trends makes it apparent where companies focus primarily on. An economic patent analysis suggests that machine learning, semantic analysis, the interconnectivity between as well as neural combinations are top trends companies pursue in their patent strategies.
[1] Based on data from Espacenet.
Key Technology Focus in Conversational AI
Source: OxFirst internal analysis[1]
[1] ibid
Untapped Economic Opportunities?
Based on this information one can quite easily undertake a valuation of patents in that space. Patents on conversational AI can probably fetch licensing rates of 15%. Combined with an analysis of patent distribution in this space, as well as an expected market volume of 15.7 billion US, one can likely argue that even a small patent portfolio could fetch significant sums.
Even just a back of the envelope assessment like this suggests that a concerted patent strategy can allow firms to maximize revenues and allow investors to make educated investment decisions. Companies can enter into strategic alliance, re-assess their position vis-à-vis competitors and it can also allow them to re-mortgage their debt or review their relationships with their equity investors. From an investor’s point of view again it can help make better decisions. After all, every investor is keen to maximize returns while keeping risks minimal. An economic assessment of patents can just provide the necessary toolkit to do so. Against the many opportunities provided by assessing patents through an economic lens, it is time to embrace patents as economic assets.
The Author’s Background

Emerging Vaccine Nationalism
‘Vaccine nationalism’ could slow the search for a cure for Covid19. [1] The nationalism that prevails in the fight for a Covid19 vaccine is not only overshadowed by the geopolitical tensions between the United States and China, but also by individual nations seeking to find a cure on their own. In the UK the government bets on a collaboration between Oxford University and the British Pharmaceutical Company Astra Zeneca. Germany backs BioNTech, China focuses on Fosun Pharma and the US support Pfizer. In this race, nations also cautiously prevent take overs of firms in their countries by firms in other countries.
While I remain fairly indifferent when nations compete against each other to conquer space, I doubt that nationalism is the best innovation strategy to find a cure for Covid19. That the first man on the moon was American and not Chinese or Russian had no larger impact on humanity. In this global crisis situation however, working in silos and without adequate international linkages is simply not the best strategy to find a cure for Covid19.
[1] Why vaccine ‘nationalism could slow coronavirus fight.’ https://www.ft.com/content/6d542894-6483-446c-87b0-96c65e89bb2c
Global Patent Strategy
In an Open Innovation eco system patents can become instruments of exchange and allow for the creation of pools, aggregators and larger knowledge clusters. They can also give way to cross licences and tech transfer arrangements.
While patent aggregators and pools have proven to be successful in the telecommunications sector, they can also be instrumental in bringing new technologies to market faster. The underlying cluster approach helps to aggregate otherwise disperse IP and, in this way, allows to bridge scattered knowledge islands created by research silos A good example of such an approach are the pharmaceutical research clusters between Oxford, Cambridge and big Pharmaceutical companies. Such pharmaceutical clusters can look back at a track record of success. Clusters like these need to be expanded, nurtured and further developed.
The Need to Establish Patent Clusters
The Comparable Licenses approach is easily understood. It seeks to establish a valuation by reference to other licensing transactions. As such, it allows to model real world licensing transactions. Being rooted in historical transactions, it offers insights into licensing contracts that have actually been concluded.
Important to note is that, just because a licensing transaction has occurred, it does not necessarily mean that the transaction was commensurate with the FRAND commitment. As with the Top-Down approach, the Comparable Licenses approach can be used as a sole or secondary method and, as well, serve as a cross-check or a sensitivity analysis.
It should be clear that key to the successful usage of this method is the identification of comparable licensing rates. Here, Europe is at a disadvantage. Whereas the United States and Canadian Financial Authorities have fairly strict disclosure requirements in place, GDPR provisions prevailing in Europe may actually prevent the adequate access to comparable licensing rates.
In the USA and Canada, licensing transactions of significant size must be publicly disclosed. No such regulation exists in Europe. To the contrary, data privacy requirements under European GDPR requirements actually do the exact opposite and prevent adequate access to licensing contracts. Accordingly, this method may be more easily used in a North American context.
Take Away
Dr Roya Ghafele is the Managing Director of Oxfirst Ltd, a law and economics consultancy She has held Lectureships (Assistant Prof. in the US Academy) in international IP law and international political economy with Oxford and Edinburgh University and served as an economist to the United Nation’s World Intellectual Property Organization, the OECD and McKinsey.

Equally, the string of literature discussing Open Innovation is well developed, but the two do not often intersect in any meaningful way. At the rare occasions the two worlds meet, it is an encounter of mutual scepticism. For the patent community Open Innovation is associated with issues such as the preservation of confidentiality in Non-Disclosure Agreements. Often, patent lawyers fear that Open Innovation aims to give away patentable technology for free. For the Open Innovation community again, patents appear to be little more than an esoteric and mostly costly instrument of law. In this brief note I am trying to offer a bridge between the two communities.
What is Open Innovation?
Open Innovation has been one of the most successful innovation paradigms of our times. It argues that innovation is omni present and that companies should look beyond their own firm to innovate. As such it encourages the collaboration between large and small firms, universities and public research institutions and proposes boundary spanning as an innovation paradigm.
Open Innovation is concerned with slashing the narrow boundaries set by institutions. Knowledge creation, according to Open Innovation, is more successful if different agents come together in a spirit of mutual exchange so to find joint solutions for established challenges. The underlying reasoning of open innovation is quite simple. Innovation becomes richer, the more diverse the community is that strives to innovate.
The concept of innovation in silos is replaced by a notion that creative and innovative ideas can be found all over the world. Tapping into this wealth of international creativity can help bring new ideas to market.
What about Patents?
Does the patent system constitute an antagonism to the aspiration to tap into the world’s global creativity?
After all, a patent is designed to exclude to the best extent possible others from using the technological innovation it protects for the period of exclusivity prescribed by the law. In practice, companies often use patents to fence in their innovation territory, oppose other firms’ aspirations to do just the same or to pursue legal proceedings in case of infringement.
Without a question these are important strategies that help firms succeed in business.
At the same time however, one can also observe that many companies maintain patent portfolios without being overly aggressive to maximize the commercial potential of their patents. Particularly large companies prefer to maintain patents rather than give them up, even though they may not be able to trace a direct line between corporate performance and their patent portfolios. IP managers generally tend to be in the unfortunate situation to have to inform the CFO that their departments remain cost rather than profit centres.
Patent strategy under an open innovation lens
I am not the first to suggest that patent portfolios can be the source of profits rather than costs. There is a wealth of literature that has sought to argue that patents are a source of wealth. They are ‘the Rembrandts in the Attic’ and all that seems to be needed is to dedust them and previously unknown wealth will come to those who find such intangible treasures. Just, for many this never happened.
In particular, it has been argued that patents can offer attractive licensing revenues. This idea triggered a rush to license patents out. An active market is however not only driven by sellers. It also needs equally motivated buyers. Open Innovation provides just such a motivation for firms to license patents in. As such it establishes a motivation that bears the potential to establish active markets for IP.
Nothing lends itself better to transferring knowledge across firms than a patent. A patent is a codified piece of knowledge where the invention is laid out in great detail. This distinguishes a patent from tacit know-how. Such know-how is very difficult to transfer as it is not clearly deciphered and somewhat inherent to the understanding of a community.
A patent to the contrary is a legally sanctioned instrument that makes technological know-how explicit. It accords with some of the most fundamental aspirations of Open Innovation. It allows firms to exchange and enrich their know how by licensing each others’ IP in and out. Such a wealth of knowledge exchange stands in opposition to the type of licensing discourse that is particularly common in the ICT sector. It is not a licensing that is strongly interwoven with litigation, or the risk of litigation. Rather, licensing is used as a mediating structure between various firms or between firms and universities and serves the purpose of enriching one’s innovation capabilities by entering in exchange with others.
Next steps
Dr Roya Ghafele is the Managing Director of Oxfirst Ltd, a law and economics consultancy She has held Lectureships (Assistant Prof. in the US Academy) in international IP law and international political economy with Oxford and Edinburgh University and served as an economist to the United Nation’s World Intellectual Property Organization, the OECD and McKinsey.

Give Up Patents for Free?
For sure, patents that read on a potential cure for Covid19 deserve special treatment. After all, the cure for Covid19 is not only crucial to save lives all over the world, but also to avoid the collapse of the global economy. Yet, what such a special treatment can look like and how special a treatment is necessary, this is where opinions diverge.
In the United States activists demand that the government should have the rights to the anti-retro viral ‘Remdesivir’. The Open Covid Pledge proposes that all IP related to Covid19 should be made freely available. Its founding adopters were technology companies such as Facebook, Microsoft, Intel, IBM and Amazon, who apparently did not find it too difficult to give away patents for free. Among pharmaceutical companies to the contrast, the idea of giving up related IP for free has been seen in a rather critical way.
With this in mind, the question for me is therefore not, whether patents related to Covid19 should be given away for free or not, rather the question arises how the profit motive can be managed in public private partnerships for health.
Public Private Partnerships for Health
Universities are often the source of valuable IP that is later on picked up by pharmaceutical companies. To turn potentially valuable patents into medications and vaccines, Universities need the support of companies. A university cannot take the leap from academic research to vaccine production on its own. The mechanisms provided by corporations allow to turn potentially valuable IP into products. It is only with the support of a company that original ideas of academics can be turned into solutions that serve the public health. Often universities pass on these patents to the private sector through a licensing agreement.
Pharmaceutical companies that ultimately bring vaccines and medications to the market are subject to market forces. They need to assure they stay profitable; they are forced to address competitive market dynamics and need to ultimately guarantee their products meet demand. While without a doubt, a pharmaceutical company has an equally important responsibility to preserve public health, but it needs at the same time remain profitable; quite simply because it is a business.
Managing the Profit Motive in Public Private Partnerships
Managing the profit motive in such public private partnerships remains a delicate balancing act. Coming to grips with the need to preserve public health, while giving companies a chance to be profitable has many facets. At present a binary approach prevails that either suggests to pass on IP ‘royalty free’ or to commercialize the IP to the best extent possible. I think there can be a middle ground between the two and this has so far gone unnoticed.
I call this IP management for public health. It allows pharmaceutical companies to remain profitable while, nonetheless preserving the assuring health for all. In this brief note I cannot explain all the facets of managing IP for public health. I can only focus here on two aspects. The terms of a licensing agreement and the royalty rate agreed in a licensing agreement.
The terms of a licensing agreement can contain clauses that help assure public health. A good example here is the technology transfer agreement that Yale University concluded with Bristol Myers Squibb. The university insisted that patients in Africa would have access to medication potentially resulting out of the technology transfer.
The other aspect, which I am ultimately more familiar with, pertains to the determination of a royalty rate. Royalty rates can be determined with the support of a host of different valuation methods. One can look for example look at the incremental value that the patents bring to the technology, one can also look at what royalty rates similarly situated patents have been able to fetch in the market or one can critically assess a royalty rate, while keeping the cumulative royalty stack in mind. These are just a few examples and the list is not exhaustive.
Licensing Rate Determination for Public Health
I briefly explain the underlying reasoning of the different methods. The incremental value approach is keen on encapsulating the worth a patent brings to the technology in comparison the value added that is derived from other factors, such as for example a firm’s own marketing efforts. The approach has been used by Courts to determine royalty rates. In the United States it is commensurate with the Georgia Pacific Criteria.
If this reasoning is applied to the question how to assure public health, then the determination of the rate is not based on its relationship to profits, but on its relationship to preserve public health. The approach and reasoning remain the same, but rather than look at turn over, revenues etc. one looks at the ability to preserve lives for patients in need.
Similarly, the approach to determine a royalty rate on the grounds of a comparison can be approached from a public health perspective. Here, one will need to spend time to find comparable licensing contracts that reflect the need to preserve health for all. The deal already mentioned with Yale University could for example serve as a blue print.
It is furthermore helpful to verify that the cumulative royalty stack a licensee may be facing allows it to remain profitable. Here, one can undertake calculations that allow to understand what a cumulative licensing rate, even if hypothetical, would look like. Equally such calculations occur regularly in licensing rate determinations. Translated to the need to preserve public health, such questions become even more important as a pharmaceutical company in need to preserve public health may not be able to obtain the same profit margins as a firm just simply eager to get as much money as it can.
Take Away
Equipped with such a nuanced understanding of how to approach licensing contracts and licensing rates, there are strong chances to better meet the need to preserve health for all. It clearly offers a third way to mere binary approach to patents, where patents are either given up for free or commercialized to the best extent possible. Licensing strategies like these should be further explored and new ideas be promoted that allow to bridge corporate interests with public needs.
The Author’s Background
Dr Roya Ghafele is the Managing Director of Oxfirst Ltd, a law and economics consultancy. She has held lectureships (called ‘Assistant Professor’ in the US Academy) in law and international political economy with Oxford and Edinburgh University and served as an economist to the United Nation’s World Intellectual Property Organization, the OECD and McKinsey.
Lawyer Monthly
An Interview with Dr Roya Ghafele. Managing Director of OxFirst Ltd. www.oxfirst.com
email: info@oxfirst.com

Dr Ghafele, can you please tell what an IP valuation is and how can it change the scope of an invention and a business?
An IP valuation helps to better understand the business dynamics around IP. An IP Valuation is core to any legal, business or financial decision pertaining to a firm’s technology. Patens, copyrights, trademarks, trade secrets and more broadly also software and data rights offer a firm the opportunity to generate income. An IP Valuation allows to make such a relationship visible.
Dr Ghafele, can you tell me a bit more about the use of an IP valuation in legal disputes?
OxFirst’s IP valuatios help determine determine damages or licensing rates. Litigations, arbitrations and mediations are a very central use case for an IP valuation. OxFirst’s IP valuations have been several times used in legal disputes and have helped the parties to the case come to grips with the economic worth of the IP. I myself offered training to the German Judiciary in IP Valuation and have offered my support to judges so to come to grips with this important part of a case. Many cases do not center around infringement, but around the economic impact of the infringement. Such questions are core to the work OxFirst does.
Dr Ghafele, can you share the method and steps you take to finalise an IP Valuation?
An OxFirst IP valuation consists of an initial due diligence followed by a strategic assessment of the various opportunities provided by the IP to maximize profits. OxFirst then makes use of various recognized valuation approaches that give insights on the economic worth of IP. In legal disputes, one can look at issues such as unjustified enrichment or lost profits, for example. One may also discuss how the IP relates to business success and failures or how it affects cash flows.
Dr Ghafele, how can the results you end up with change and impact a legal case you are instructed on?
In a legal dispute, it can help determine a damage award or an adequate licensing rate. It can also assist with an IP sales or licensing negotiation.
An IP valuation is however also central to a firm’s business strategy. It can allow a company to understand what IP to hold on tightly to and what to license out or in. It is only through an adequate economic analysis that the many business options associated with IP become visible.
Just to give you an example, we recently completed an IP valuation for a high tech venture. With the help of the OxFirst IP valuation, the firm was in a position to launch a new licensing programme. The OxFirst IP valuation was central for the launch of this new venture.
At another instance, the OxFirst IP valuation helped assess the economic risks associated with IP in a M&A transaction. The economic analysis of the IP helped assess any potential anticometitive market situation the merger could trigger and also helped the parties come to grips with the acquisition price.
Dr Ghafele, what impact can the above have on the economy and businesses?
OxFirst’s IP valuations have a proven track record of success. In legal disputes they have been central to coming to grips with damages and royalty rates. Because OxFirst is an economic consultancy, it can offer insights on IP, which are not available when looking at IP for a legal lens.
OxFirst’s IP valuations have helped companies of various sizes and stages in their lives maximise revenues, while being in a position to control costs. At the same time, they have allowed IPR managers make educated strategy choices.
All of these advantages are immensely valuable in the age of Corona, where we need to assure every Pound is spent wisely.
To view the interview click https://www.lawyer-monthly.com/2020/06/why-ip-valuation-matters/
For further information email: info@oxfirst.com, https://www.oxfirst.com
OxFirst. Oxford. U.K.

By Roya Ghafele, OxFirst Ltd. www.oxfirst.com
The continent of Europe is not short of creative and innovative entrepreneurs eager to make a difference. Yet, their attitude and mindset towards IP sets them apart from their counterparts in the United States. While a study undertaken by UC Berkeley shows the many different ways which the young and mighty of Silicon valley put their IP to work, a study undertaken by the UK Intellectual Property Office suggests that only 13% of British companies consider IP to be important to their business and only 7% state that they own patents. Such statistics are alarming.
For sure, not every patent is a capital catch and a lot of patents may not even be worth the paper they are written on, but to ignore patents all together seems irresponsible. For sure, at the gist of such misconceptions lies a lack of awareness about the many opportunities and potential pitfalls associated with intellectual property. To equip start-ups and scale-ups with a minimal understanding on the value of IP is the purpose of this brief note.
Why Patents matter
Patents are the legal dress of an invention. As such, they equip you with a temporary monopoly right over your invention. For usually a period of twenty years you own the invention. In exchange you disclose your invention to the world. Because a patent allows you to stack your rights in a given technology space, you have an entry ticket to the market based economy. This is a very powerful tool.
Like any other form of ownership, the ownership of a patent gives you the opportunity to use it for your own purposes, but it also allows you to trade. Through a patent your tacit knowledge, your inherent insights, bear the potential to create surplus value. The property notion inherent to IP gives you the ability to license or sell your IP, but also to use it for your own internal purposes, such as protecting your products or services.
How you can put patents to work
Using patents as a fence around a product or technology or taking advantage of it to keep competitors at bay is a fairly established tactic. What I find more exciting, is how to make use of patents to attract investors, renegotiate an interest rate or identify opportunities to enhance a company’s capital base.
Access to adequate financial means can often be a stumbling block for various forward looking and promising technology fields. In my practice, I have been repeatedly able to help firms overcome this problem by undertaking an IP valuation. Through an IP valuation it is possible to associate rights to an invention with a potential financial revenue stream. It can help understand how risks relate to potential revenues and what strategy a firm needs to make use of to live up to its full potential. As such, an IP valuation is more than just a simple report that offers insights into the economic worth of intellectual property. It is an instrument of business strategy.
I understand strategy as the most effective way to get you where you want to be. A strategy is a means that allows you to achieve your goals. You can only achieve these goals when you have adequate insights on all your assets, be they tangible or intangible in nature. While your firm’s balance sheet will tell you a lot about your tangible assets, it will stay silent about the economic worth of your IP. The old tale that you cannot manage what you cannot measure reflects well this dilemma.
However, an IP valuation can changes this. As an off-book assessment of the economic accounts of your patents, it sheds light on the possibilities and potential pitfalls IP can have. As such, it is a key instrument of your firm’s IP strategy.
Case study
If all of this sounds a bit too hypothetical, I will explain myself with the help of an example. X is a company we undertook an IP valuation for in Mach 2020. X was a spin out from a North American University that obtained its IP by means of a license from the University itself. The firm consisted of four entrepreneurs who had an environmentally friendly technology that allowed to resolve a substantial problem in the area of urban waste. Experiments in the lab did prove that the technology was functioning. The firm had about 10 million in investments already. They approached me asking how much the patents could be worth. During the course of the valuation, we guided them through a process of potential opportunities for an IP strategy. The team was rather skeptical. After all, their experience with the license from the university was not particularly positive. Their thinking went more in the direction of exiting the company in a fast manner, or alternatively brining the technology solution to market on their own, with the support of a few investors. Once they saw the results of the IP valuation they opted for an IP business model. The advantage was that it allowed them to scale the technology fast without losing ownership over it. The IP approach we recommended allowed them to take advantage of the best of both worlds. Growing without having to ‘go solo’, while at the same time having the ability to benefit from a continuous growth opportunity provided by the IP strategy. We heard that in the last four months this firm was already able to obtain a further 20 million Dollars against their IP alone. Further deals are in the pipeline.
Successfully Maneuvering the patent space
IP can be a source of wealth, if approached under an economic paradigm. To untap such potential, it is important to critically assess IP from a business perspective. This can be achieved through an IP valuation.
By OxFirst. www.oxfirst.com

More than ever before has the current Corona crisis shown that there is a need to invest wisely in technology. Humanity is faced with the necessity to find a cure as fast as possible. Possible approaches range from tracking devices to new vaccines.
In all of these endeavours intellectual property plays a major role. Patents help protect the technology itself, copyright helps protect code and software, trade secrets offer the protection of strategic business information and trademarks help leverage the brand of a firm. These various forms of IP are crucial for a firm to succeed. In particular, it is the congruence of various forms of IP that help a business to succeed.
An IP valuation helps to better understand these business dynamics. OxFirst’s IP valuation consists of an initial due diligence followed by a strategic assessment of the various opportunities provided by the IP to maximize profits. It also helps manage costs, which many companies may find important in the current situation. OxFirst then makes use of various recognized valuation approaches that give insights on the economic worth of IP.
As a result, companies are often in a position to maximize their business opportunities or attract investors. Private Equity, Venture Capital and Business Angels again are in a position to better assess risks and return. An IP valuation can offer insights which are otherwise not available. Translated to the current crisis, this may mean that we may be in a better position to leverage IP in search for a cure for Corona.
An IP valuation is structured into three parts. An IP due diligence, a business assessment of the IP and an in-depth analysis of the role of the IP within the business. Also important is to understand is how the IP can be positioned in relation to forces at work. Such forces at work consist of regulatory challenges, technology challenges, potential new competitive entrants, as well as competitive dynamics in the market.
The assessment of these forces at work helps determine a potential net value for the IP at stake. In doing so, it allows to establish a relationship between the IP and the business environment it is situated in. However, such analysis is not just narrative in character. The valuation of the IP allows to quantify such forces at work. This is an amazing value proposition as it helps understand potential returns and sets them in relation to risk.
Unsurprisingly this allows a firm to reorient its strategy and sets the baseline for the entire business strategy, not just the narrow circle of the IP strategy itself. A firm can be in a position to maximize revenues, while at the same time minimize its costs.
Quite simply, because of the immaterial nature of IP. Trading in intangible assets is a good deal more cost effective than in tangible property rights. Such approaches may also work for firms specializing in a cure for Corona.
IP valuations have a proven track record of success. They have helped companies of various sizes and stages in their lives maximise revenues, while minimizing costs. At the same time, they have helped investors make educated investment decisions. These advantages are immensely valuable in the age of Corona, where we need to assure every Pound is spent wisely. The path to finding a cure to the virus is invariably interlinked with an adequate analysis of the economic impact of intellectual property.

IP Valuation helps Manage Firms
The dire need for a cure for Corona illustrates the necessity to come to grips with the valuation of intellectual property. There is neither time nor budget to waste. Ideally, a straight forward solution should be found in the next couple of months, if not even weeks.
Yet, and here lies the dilemma, markets for technology don’t work like that. Technology development is riddled with uncertainty. Risks stem from the technology itself, which may not be viable after all, as well as macroeconomic and financial risks; to name a few.
Because creative learning is central to innovation processes it is also difficult to predict how much money will be needed to create viable long-term technology solutions. Penicillin was discovered by mere coincidence and when 3M aimed at finding a glue that would stick really well, it discovered a glue that did just the opposite. Then again, there are those examples where millions are spent and in spite of that the technology is ultimately abandoned.
Intellectual Property which is adequately valued can in such contexts help. While the valuation of intellectual property can do little to prevent such risks, it can help enhance transparency. This in turn allows to better manage a firm and make enhanced investment decisions.
Intellectual property protects various different business segments. Patents protect the technology itself, copyright helps protect code and software, trade secrets offer the protection of strategic business information and trademarks help leverage the brand of a firm. These various forms of IP are crucial for a firm to succeed. In particular, it is the congruence of different forms of IP that help a business to succeed. The valuation of IP helps shed light on the many tactics a company has at its disposal to leverage synergies. At the same time, it can help manage risk. This helps attract investments and enhance ROI (return on investment).
IP Valuation works in Practice
I have had many opportunities to show that such approaches work in the real world. Just recently I undertook the valuation of a tech start up specialized in urban mining. The firm focuses on extracting valuable materials from electronic trash. In doing so, it addresses a massive environmental challenge, while at the same time opening up previously unknown business opportunities.
The IP valuation I undertook helped the firm reorient its strategy. The IP business strategy set the baseline for a massive increase in revenues. At the same time, it helped the firm minimize its operational costs.
Quite simply, this was possible because of the immaterial nature of IP. Trading in intangible assets is a good deal more cost effective than in tangible property rights. Such approaches may also work for firms specializing in a cure for Corona. An IP valuation can help a firm save costs, increase returns and enhance its technology strategy. At the same time, an IP valuation helps investors make educated investment decisions. These advantages are immensely valuable in the age of Corona, where we need to assure every Pound is spent wisely. The path to finding a cure to the virus is invariably interlinked with an adequate analysis of the economic impact of intellectual property.

An OxFirst Interview with Superbcrew.
Available at: https://www.superbcrew.com/oxfirst-enables-ip-and-competition-strategy-through-sound-economic-analysis/
Q: Can you please tell us about your company and the specific problem or challenge that you are addressing?
OxFirst is an award-winning law and economics advisory firm founded in 2011 by Academics from Oxford University. We offer independent expert testimony on behalf of companies, governments and international organizations, produce authoritative studies for business and public policy formulation and conduct economic analysis in litigation and commercial disputes. Our aim is to integrate high quality economic analysis into the everyday practice of technology transfer, intellectual property commercialization, commercial litigation and public policy formulation in the high-tech area. As such we support intellectual property and competition strategy through sound economic analysis.
We were recently awarded as ‘Best IP Valuation Firm’ in the U.K. by Corporate Finance Magazine ‘Acquisition International.’
We won this prize for helping high-tech scale ups assess the economic value of their IP portfolio and subsequently monetize it. This earned OxFirst also the recognition in the UK 2018 IP Excellence Awards.
Other than scale-ups, we work also with Fortune 500 firms, as well as national Governments throughout the world and assist with in-depth economic analysis that allows to formulate strategies and policies so to fully leverage creativity and innovation as an engine of growth. We believe that breaking away from conventional solutions is a vital asset in today’s knowledge driven economy. Our services are outside the box and tailored to the specific requirements of the people we work with.
Q: Can you please tell us a little about the market and the market opportunity?
OxFirst’s aim is to systematically establish the commercial element in commercial law. The global market for patent filing is growing consistently at 10%, but evidence shows that only a fairly small fraction of that IP can truly be linked to commercial activity!
This IP commercialization gap can to a large extent be explained by the fact that there are not enough economists in this area who can bridge the gap between IP law and economics. This gap means that many firms do not even know the value of their IP assets, let alone how to manage their IP assets for wealth generation. By consequence, much IP sits gathering the dust and IP departments are often perceived as a mere cost center.
This is why it is so important to value intellectual property. An economic valuation of IP is core to turning an intellectual property right into an intellectual property asset. Without an adequate valuation of the intellectual property, it is really difficult, if not impossible, to manage IP as a commercial asset.
- Can you manage what you cannot measure?
- Can you trade if you don’t know the worth of your assets?
- How can you adequately communicate the value of all your firm’s assets, be they tangible or intangible to investors, if you have not valued them?
The valuation of intellectual property allows a firm to identify the commercial worth of its IP assets, it also helps understand where there are gaps in the portfolio and what steps can be undertaken to commercialize IP. Such commercial steps should not be misunderstood with launching action in case of infringement.
In fact, I think that the future of IP lies in taking it out of the Court room and into the Board room. IP based financial transactions need to occur in a free and open market environment and not be determined by Courts. The adequate valuation of IP is a crucial step to achieve this.
Intellectual Property has long viewed as the exclusive domain of the legal profession. Work was undertaken by lawyers for lawyers. The economic, business and management opportunities associated with intellectual property were more or less ignored.
OxFirst has systematically and continuously proven that taking a continuous business perspective is the future for IP. Companies we worked with were able to gain substantial income streams from their intellectual property. Equally, our work helped Governments formulate IP policies which allow to leverage IP for economic growth and prosperity.
Q: What geographic markets are you focusing on currently?
We focus on the intellectual property rich regions in Europe and in the United States.
Q: What are the key benefits and features of your work?
Quite simply; OxFirst helps you turn intellectual property into a business opportunity. Our award winning advisory firm assures that firms, governments, international and supra- national government institutions leverage intellectual property for growth. We do that by offering high quality economic analysis on intellectual property. This enables IP commercialization and IP driven business strategy. Key to our work is sound economic analysis. This helps shed light on otherwise untapped business opportunities. A mere legal perspective on IP is not enough to unleash the untapped wealth of intangible assets.
For example, OxFirst acted as an IP valuation expert in a commercial transaction between a high-tech firm and a private equity company. The high-tech firm owned some fairly interesting intellectual property, but those had to be first identified. The valuation of the IP was crucial to identify interested trading partners, helped with price formation and was crucial to the commercial transaction.
At another occasion, we helped a high tech firm value its IP, so to help investors come to grips with the economic value of the IP. Ultimately, this helped the high-tech firm raise its profile and contributed to assuring adequate revenue streams for its R&D. These funds were made available because of the perceived commercial value of the IP generated.
As for Governments, our IP valuation led the Republic of Austria to formulating its First National IP Strategy since its first written mention over a thousand years ago! This work is driven by an eagerness to help the country leverages it’s IP as an economic opportunity rather than a negative right.
Q: Who are your competitors?
McKinsey & Company was founded in the 1930s with the idea to bring the concept of a law firm to the world of Management. The very term ‘Management Consultancy’ originated in the 1930s. But what the world was missing for a long time was ‘Management Consulting for IP.’ In 2011 OxFirst brought this concept to the world of commercial law.
So, just like McKinsey, the Boston Consulting Group or Accenture we offer high level economic analysis; however solely directed towards the strategic management of intellectual property assets. With such a highly-specialized expertise, there are hardly any firms that can truly compete with us.
Q: What advantage does your services offer in contrast to your competitors?
OxFirst is systematically looking at IP from an economic perspective. We are not a law firm and we are not a general top-management consultancy. We are a law and economics consultancy and it is this unique combination that gives us the competing edge in an era where knowledge and rights in knowledge assets will be the key driving force of wealth generation.
Q: What makes your services stand out?
OxFirst focuses on three specific areas of IP and competition law and policy. As such, we are highly experienced in the valuation of IP, the preparation of Expert Testimonials for licensing, litigation, damages analysis and IP driven investments. Other than that we focus on IP management and IP policy formulation for growth.
- The Valuation of Intellectual Property
One of its flagship projects allowed an early stage high-tech firm to raise over 10 Million US Dollars on the basis of its IP valuation. At another instance, the valuation of the IP undertaken by OxFirst formed a cornerstone of a patent acquisition, which gave the seller a significant boost to its cash reserves.
- Accredited Expert Testimonials for Commercial Disputes, Litigation and Licensing Negotiations
OxFirst has been multiple times involved as an economic expert in commercial disputes, litigation and licensing negotiations. Our economic analysis formed the cornerstone of price formation in licensing negotiations, have helped Courts identify the adequate value of a damage award and allowed also to assess the economic risk of litigation in mergers and acquisitions.
- Economic Analysis of intellectual property and competition policy formulation
Equally, we have had a substantial contribution to policy formulation. In the copyright space for example, OxFirst economic analysis contributed to the formulation of a New Directive on Collective Rights Management
We did so, by showing that there was a significant gap between what collecting societies could be making from digital licensing revenues and what they are in fact generation from this segment. We estimated the 2012 market for digital music royalties in ten different E.U. countries at well over €18 billion. However, only €116 million were reported by corresponding Collective Rights Management Organizations in that same year. The findings of the study were also published in a well- regarded scientific journal.
Q: Tell us about your team?
What makes us unique is that all of us have worked in the IP space for decades and gained substantial experience in the ‘real world of Academia’, but also in practice. Very few can offer such depth of expertise and knowledge on IP and competition law and economics.
Q: How will you succeed in such a saturated market?
The market for IP assets commercialization is farm from saturated. The current addressable market in the United States alone is the $12.6 billion that the patent licensing sector generates annually,[1] and the approximately $80 billion in annual private value of patent licensing in the U.S.[2] The U.S. Patent Office reports that 97% of all U.S. patents fail to generate any revenue due to the current system being difficult, expensive and time consuming. The IP valuation of OxFirst should increase the volume and value of patent licensing transactions in the US and overseas.
Q: Anything else that you would like to add?
Intellectual property (IP) will play in upcoming technology spaces such as Artificial Intelligence, Big Data or the Internet of Things and it is crucial to address how various approaches to IP strategy and policy can lead humanity to substantially different social and economic contexts.
The question of IP strategy and policy is particularly pronounced as the nature of wealth generation is radically changing. While at the end of the 19th century the richest man in the world, John D. Rockefeller, made his wealth in the petrol industry, one of the richest man of much of the 21st century, Bill Gates, possesses primarily one resource: intellectual property. This alone, seems reason enough to systematically identify economic approaches to IP and competition law. IP bears the potential to be the currency of the knowledge-based economy, but for this to happen, it is crucial that we start treating it as an economic asset and use it to foster inclusive growth and assure strategy and policy measures to achieve this.
[1] Data from the 2012 Economic Census, available at: http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_53I3&prodType=table (last accessed August 11, 2014).
[2] Litan, Robert and Hal Singer. 2014. Unlocking Patents: Cost of Failure, Benefits of Success. Economists Incorporated.

By Roya Ghafele, OxFirst. www.oxfirst.com
Last month, a small mobility company based in Texas popped up on my regular online monitoring of the IP world. This company had written a clever press release about the value of its patent portfolio. While I can’t vouch for the veracity of its claims, I do think more entrepreneurs can learn from its tactics.
As an IP specialist, I am frequently surprised by how little start-up founders and entrepreneurs think about harnessing the value of their IP. Several years ago, I did some work for a start-up working with high-temperature superconductors. Its founders were having trouble determining the value of their IP. But with an IP valuation under their belt, offers began rolling in. IP valuations aren’t just simple PR! Savvy entrepreneurs leverage their patent portfolios for cash, license them or assure they adequately protect their products. And, for a start-up that is pivoting, IP can even be sold to private equity investors, patent aggregators or other market players.
Undertaking an IP valuation on one’s own can be difficult, however. And tech companies get into IP battles all the time on who should pay whom, and how much is at stake. Nevertheless, there are a few simple principles that can help you use your IP to put your company in a better position.
- Determine your goals
Valuing your IP portfolio can help you decide how much to invest in R&D, build a pitch deck, or engage in licensing negotiations. It can also help when you are optimizing your tax structure, enter a joint venture or collaboration, or seek to insure your business success. Your goals may depend on what stage your business is in. And depending on what exactly those goals are, simpler methods for rough estimates can be undertaken to serve your purposes.
- Research several methods to decide which works best for you
In general, the industry recognizes a handful of IP valuation methods. The most common ones focus either on the incremental value, the income, the market approach or a combination of thereof. The UK Intellectual Property Office, for example, emphasizes that it can be helpful to assess the revenues that IP rights may generate in the future. This method focuses on the potential size of the total market and competition, as well as actual cash flow. The discount rate is assumed to reflect risks, which needs to be determined appropriately. A market method may produce additional insights than the ones the income method offers. Often it can be a good idea to use several methods so to understand value through different ways.
- Find a simple way to convey what you find
This is perhaps the most neglected element of IP valuation among companies, particularly those in the high technology industry. Media conglomerates and sports franchises have no trouble demonstrating the value of cartoon characters or football players. But because so much of IP valuation comes from complex economic models, it can become difficult to demonstrate when the IP is not as visible or easily understandable. This is why the Texan mobility company stood out so much for me. They had made their patent portfolio a central feature of their communication strategy. This tactic isn’t going to work for everyone. Nevertheless, you should try where possible to show how your IP is making a difference to the market. Keep that information prominent – on your website, in your investor presentation pack, even in the short description on your press release. Rather than telling people how many patents you have, for instance, emphasize your licensing potential or what technologies your patents are essential to.
Among founders and entrepreneurs, understanding of the importance of IP valuations is growing. Even so, the market is not yet mature. Companies that are early movers within their industry, in communicating the value of their portfolio, stand to gain a great deal in the minds of potential investors, customers, and even employees.
Roya Ghafele is founder of IP consultancy OxFirst. She previously worked for the World Intellectual Property Organization, and now specializes in providing advice on IP valuation and strategy. You can follow her on LinkedIn.

Unleashing the Economic Potential of Patents in Conversational Artificial Intelligence
By Roya Ghafele, OxFirst Ltd. info@oxfirst.com
With a rapidly growing market that offers both, attractive returns on investment and the genuine ability to transform the way humans and machines interact, I was keen to understand the economic value of patents reading on Conversational Artificial Intelligence.
Patents offer strategic insights, yet they are often overlooked by the business and investor community. Classified primarily as an esoteric field of law, the economic analysis of patents has gone by and large unnoticed.
I we see things differently. I look at patents as an economic asset that helps generate income. Patents offer key intelligence, which is nowhere else available. Combined with our cutting-edge economic competence, this allows us to forecast tech and market trends based on patents. It also opens up opportunities to monetize patents. Such commercialization opportunities can be detached from the classical approach of investing in companies, which may or may not be solid from a patent perspective.
Conversational AI – Exciting Upward Potential
Conversational Artificial Intelligence is on the rise. The market for Conversational Software is a prime example of platform businesses that thrive in the spirit of Open Innovation. Players, such as Apple or Google focus on digital assistants, but the market is also populated with Chatbox and voice experience technology.
The advantages for consumers are important. Say you want to book a holiday in Spain. Instead of filling out complicated forms online, you can simply have a chat with your computer, which can then point you to the holiday of your dreams, following a brief chat.
Analysts estimate a deal volume of 15.7 USD Billion and a Compounded Annual Growth Rate (CAGR) of 302% by 2023. (data does not reflect potential effects of Covid19).

While companies in the space seek to monetize also on data generated during this process, patent ownership remains instrumental to fence one’s tech space.
A Brief Description of the Patent Space
The OxFirst analysis suggests that there is tough competition between the United States and China, with patents filed in the Republic of Korea emerging also as a key region.
Top Countries where Patents were filed in the last 10 years
Countries | Count |
United States (USPTO) | 7615 |
China (SIPO) | 5581 |
Republic of Korea (KIPO) | 1387 |
The market also remains dominated by big tech. In particular, IBM and Microsoft have been aggressively filing patents in this area.
A look at the key patent trends makes it apparent where companies focus primarily on. An economic patent analysis suggests that machine learning, semantic analysis, the interconnectivity between as well as neural combinations are top trends companies pursue in their patent strategies.

Untapped Economic Opportunities?
Based on this information one can quite easily undertake a valuation of patents in that space. Patents on conversational AI can probably fetch licensing rates of 15%. Combined with an analysis of patent distribution in this space, as well as an expected market volume of 15.7 billion US, one can likely argue that even a small patent portfolio could fetch around a hundred million US Dollars.
Even just an over the envelope assessment like this suggests that a concerted patent strategy can allow firms to maximize revenues and allow investors to make educated investment decisions. Companies can enter into strategic alliance, re-assess their position vis-à-vis competitors and it can also allow them to re-mortgage their debt or review their relationships with their equity investors. From an investor’s point of view again it can help make better decisions. After all, every investor is keen to maximize returns while keeping risks minimal. An economic assessment of patents can just provide the necessary toolkit to do so. Against the many opportunities provided by assessing patents through an economic lens, it is time to embrace patents as economic assets.
The Author’s Background
Dr Roya Ghafele is the Managing Director of Oxfirst Ltd, a law and economics consultancy. She has held lectureships (called ‘Assistant Professor’ in the US Academy) in law and international political economy with Oxford and Edinburgh University and served as an economist to the United Nation’s World Intellectual Property Organization, the OECD and McKinsey