Www.orbisip.com Accessing Global Innovation in Security Peter Jaco Chief Executive Officer ISACA Mumbai Chapter 18 th March 2009 March 2009.

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Accessing Global

Innovation in Security

Peter Jaco

Chief Executive Officer

ISACA Mumbai Chapter

18th March 2009

March 2009

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Agenda

Security Innovation Technology Consortium (SITC)

OrbisIP – Business Model and Technology Market trends Why is it difficult to Monetise your IP? Patent Commercialisation Strategies

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Security Innovation and Technology Consortium

(SITC)Vision/Mission:

Knowledge and capability for the global security and resilience markets

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SITC Objectives

1. Provide businesses with access to actionable global market intelligence

2. Facilitate collaborations between innovative Security Technology SME businesses and the global innovation supply chain.

3. Get individual businesses and collaborations in front of major customers

4. Join up the region’s business support services so they’re giving businesses and their collaborations, the back-up they need at every stage of this journey

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• Rt Hon The Lord Roger Freeman, Chair • Peter Jaco, Deputy Chair (OrbisIP) • Richard Chisnall (QinetiQ) • Duncan Fisken (Computer Associates) • David Mullin (BAE Systems) • Ross Parsell (Thales e-Security) • Mike Anderson (Radiation Watch) • James Brennan (Sollerta) • David McIntosh (Omniperception) • Colin Atkins (Transport for London) • Bob Rose (APPSS/RISC)• John Williams (HSBC)• Paul Osborne, Company Secretary (Cranfield University)

SITC Board

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SITC Scope

1. Central Government and National Risk Register

2. Private Critical National Infrastructure

3. Law Enforcement

4. Border Security

5. Security Services

6. International Partnerships

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SITC Special Interest Groups

1. Transport

2. Governance, Risk and Compliance

3. Sensors and Detectors

4. Surveillance and Tracking

5. Information Systems Protection

6. Information Assurance

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OrbisIP Overview

OrbisIP is bringing new technologies to the international market for Information Security and Homeland Security

Working with over 120 international IP producers Building a customer network of leading Software / Hardware OEMs

and Prime Contractors To become a one-stop shop for security IP for technology companies To be the exploitation partner of choice for IP producers To drive innovation in the global security R&D supply chain

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OrbisIP Business Model

Advisory Board

Technology Advisers

Operations

OrbisIP

Sources of IP

University Research

Labs

National Research

Labs

SMEs

Security Companies

OEMs

Governments

Consumers of IP

IP RequirementsIP Requirements

Tech Transfer IP Licensing

Payment/RoyaltiesRevenue Share

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OrbisIP Technology Clusters

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OrbisIP Security Technology Market Segmentation

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OrbisIP – Facilitating the Global R&D Supply chain

Scout for IP– Identify security research worldwide– Build OrbisIP knowledge and future requirements– Monitor research outputs and market trends

Assess IP– Perform IP audits– Implement OrbisIP evaluation model– Undertake technical market assessment

Commercialise Information & Homeland Security IP– Take to market through a set of technology clusters– Work with Universities to exploit IP– Combine and integrate IP

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OrbisIP Customer Requirements

Biometrics, crowd analysis, sensors VOIP security and forensics Mobile biometrics, border controls, sensors, voice analysis Text and transcribed voice analysis Image processing and video analysis Image processing and biometrics Cryptographic key management Out-sourced data protection End-point protection and virus clean-up Forensics technology Device and Embedded security Security in mobile applications and digital media protection

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Market trends

The industry has a growing need for innovation and is willing to licence in or acquire new technology

IP consumers are open to new technology from IP creators and global R&D partners

Recognised depth and quality of R&D from emerging nations Universities and SMEs have relevant technology that meets the

requirements of industry IP creators want a better return and wider distribution of their

technology to industry Universities and their Technology Transfer Offices (TTO) welcome

industry expertise IP creators need to understand industry Security requirements and

market trends

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Why is it difficult to Monetise your IP?

Cost of establishing path to markets and channel distribution model

Cost of sales and support of traditional software license model

Complexity and cost of managing IP portfolio – what do you protect? Where? and Why? PCT or not?

Difficulty of enforcing patents and prosecuting infringers

Cost of marketing / distribution / engagement with industry

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Considerations for Patent Valuation

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Patent Commercialisation Strategies

Sale of product build based on Patent Outright Sale of Patent License of Patent to 3rd party / OEM Patent sale with revenue earn out Selling Enforcement rights Friendly or hostile licensing – (RIM etc.) e.g. (RIM

etc.) Capitalisation on Patent assets

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Patent Commercialisation Strategies

Sale of product build based on Patent:– Advantages – product differentiation, build

potential exit value in company with IP pool, create long term revenue and value stream

– Disadvantages – costs of building a commercial organisation, bandwidth and distribution restrictions versus a partnership with established global player

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Patent Commercialisation Strategies

Outright Sale of Patent:– Advantages – early and potentially high revenue

returns, no need to build commercial enterprise so can stay R&D focused

– Disadvantages – lack of future larger upside and long term revenue return, loss of control of ideas and innovation

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Patent Commercialisation Strategies

License of Patent to 3rd party / OEM– Advantages – larger distribution channel for your

technology with established industry partners, earlier revenue streams, input from partner into further R&D partnerships, commissioned to build & enhance technology

– Disadvantages – low percentage revenue split on OEM deals, lack of control or innovation agenda, firm can get ‘tied’ to one corporate technology roadmap, cost of legal fees

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Patent Commercialisation Strategies

Selling Enforcement rights– Advantages – Revenue without selling your IP

assets, 3rd party pays IP maintenance costs– Disadvantages – lock normally long term, difficult

to obtain revenue guarantees, may be dragged into infringement legal battles

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Patent Commercialisation Strategies

Friendly or hostile licensing – (RIM etc.)– Advantages – Hostile - can earn significant cash

through legal campaigns – Disadvantages – lawyer led and expensive with

no guaranteed returns, aggressive reputation

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Patent Commercialisation Strategies

Capitalisation on Patent assets– Advantages – can use patent portfolio as

collateral for finance, retain ownership over IP and control (subject to meeting finance obligations), can provide working capital

– Disadvantages – difficult to value, doesn’t work well for SMEs more a balance sheet exercise for large corporates, requires strong financial position and can entail personal guarantees

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OrbisIP – Contact Information

For further information on OrbisIP please contact:

OrbisIP Limited Peter Jaco 9 – 10 St.Andrew Square

Chief Executive Officer Edinburgh, Scotland

[email protected] United Kingdom

Tel: +44 (0) 20 7929 4467 Fax: +44 (0) 20 7929 4500

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