What led you to pursue a career in intellectual property?
Like many other choices in life, pursuing a career in intellectual property was quite serendipitous! I started my career as an accountant, and after obtaining an MBA degree at UC Berkeley, I moved into a new career in litigation consulting, working on economic damages analysis. As IP litigation started to show up more frequently, my focus has shifted to IP damages. I received a great opportunity to join one of the first IP consultancies in the United States, where I launched and ran an IP valuation practice, focused primarily on working with large corporate IP holders on transactions and licensing deals. I currently run my own firm, Foresight Valuation Group, where I still practise IP valuation in addition to litigation services and advising start-ups.
You have worked with companies of all sizes – from start-ups to Fortune 100 corporations. How do you adapt the way that you work between entities with such different needs?
As an IP valuation and strategy expert, I strive to address the unique needs and circumstances of each IP holder. Start-ups have limited budgets and their most common IP valuation need is to raise funding based on their IP portfolio. We have developed processes and unique valuation metrics particularly for start-ups, that leverage on knowledge and processes we already have in-house to keep the budget affordable. Larger corporate clients, on the other hand, have more complex needs: they usually have more intellectual property across several categories (patents, trademarks and copyrights), and there is a need to sort through several monetisation options. These large corporate engagements end up being highly customised and may require dedicating more resources to the analysis.
What common mistakes do businesses make when they first try to commercialise their intellectual property – and how can they avoid these?
The most common mistakes that companies make, as they approach IP commercialisation for the first time, involve underestimating the risk/cost and overestimating the return. This is true for companies of all sizes, although larger companies with more resources are at an advantage, as they can quickly hire an experienced team to run their monetisation programmes. Independent inventors, start-ups and other smaller entities are at a disadvantage because they often try to do it themselves with the resources they have in-house. These are the entities that end up with a failed monetisation campaign.
What, for you, are the most crucial steps of any IP monetisation process?
In order to be successful in an IP monetisation process, I would recommend a three-step approach. First, understand how the assets bring value – a patent, for example, can have stick value (infringement potential) or carrot value (technology transfer into a new product market). Second, identify the business model that is most suitable for these assets - sale, licence or spinoff. Finally, determine what entity is the most suitable monetisation target/partner, operating company or intermediary. This is often a multiple-scenario exercise, where monetisation options are identified and ranked based on some internal criteria.
You have won widespread acclaim for your work as an educator – what is the most important thing that a current student of intellectual property needs to know to prepare for a successful career?
I teach IP management and valuation at the Stanford Graduate School of Business to MBA students. My curriculum is different to the material that is taught at the Law School, where the focus is on IP laws. Instead, my class deals with the business side of intellectual property, and how to manage it as a strategic business asset. The students are all future business leaders, and therefore my goal is for them to understand that intellectual property is one of the most valuable assets in any technology company, and that the management of a company’s IP portfolio should not be left to the lawyers alone. While many of my students will not manage a portfolio, they should still participate in strategic IP decisions using the monetisation models and valuation tools that they have acquired in my class.
Efrat Kasznik is president of Foresight Valuation Group, a Silicon Valley-based IP valuation and strategy firm. She is also a lecturer at the Stanford Graduate School of Business, where she teaches MBA and executive classes. Ms Kasznik has over 25 years’ experience providing IP valuation services in support of licensing deals, technology acquisitions, M&A transactions and fundraising. She frequently serves as an expert in legal disputes involving IP and start-up valuations and damages.