This
report has been issued from the UK IPO and essentially relates to the situation
in the UK. The ten points given below
are simply what caught our attention and do not fully do justice to this 221
page report.
1. Knowledge assets are not appreciated in
mainstream UK lending. Recent banking
initiatives have found that traditional fixed assets no longer exist for many
companies, and so it seems that change will be needed to allow knowledge assets
to become bankable. 70-80% of company value may now come from intangible
assets.
2. Other countries are already making the
necessary changes. Malaysia and
Singapore are introducing guarantees to facilitate IP-backed lending. Denmark
and India are developing IP marketplaces.
Brazil is experimenting with IP audits.
3. The infrastructure for IP markets and IP
financing needs to be improved. However
a key question remains over how much is the IP worth when the business fails.
If the technology turns out not to work then a patent can be worth nothing.
4. Venture debt and mezzanine-style finance does
exist in the UK, for example from Silicon Valley Bank which participates
alongside venture capital. In this
patents are regarded as very important.
5. At the moment there are 3 FCA-regulated
crowdfunding platforms that can be used to raise money on the internet;
Crowdcube, Seedrs and Abundance.
6. Very few companies have tried to assess the
worth of their IP, and so clearly would not have had knowledge of the worth of
their IP when approaching a lender.
7. Offensive patent aggregators are mentioned as
a (controversial) option for monetising patent rights. Defensive patent aggregators are also mentioned,
the costs of which are met by investors such as IBM, Cisco and HP.
8. The Intellectual Property Exchange
International is a recently opened public exchange that allows IP rights to be
traded as commodity. However it is too
early to assess whether it will be a success.
9. There are IP auctions and brokerages. This is
mostly a US activity, though. In
addition the UK IP insurance market is also immature.
10. Ultimately IP is seen as too complex to
finance with the usual lending means due to the difficulties in understanding what
it is, how it relates to cash and where its values can be realised
independently of the business. Banks
cannot carry out the appropriate due diligence.
The
report is available here.
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