IP, INNOVATION AND INVESTMENTS

2020-01-28

AG E N DA

01 Introduction

02 The Rouse Framework and Use Case

03 Open Discussion & Questions

04 Key Take Aways

years

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29 16 13 680+offices countries people

About Rouse

Stockholm, SE

TODAY’S PRESENTERS

5

Thomas Randes

Business Unit Manager(Experience: Industry, IP Lawer,

Consultant)

Erik Oskarsson

Head of Professional ServicesExperience: Industry, Start-up,

Consultant

INTRODUCTION TO CONTROL POSITIONS

6

Control

IP Based controlSecrecy Based

control

Relationship Based

controlCapability

Based control

IP/IPR Base control – Refers to control that can be established by

using intellectual property rights.

Secrecy based control – Refers to control that can be established

by deploying secrecy processes and behaviors

Relationship based control – refers to control that can be

exercised through relationships with other commercial and non-

commercial entities

Capability based control – Refers to control that is created by a

unique set of capabilities that requires considerable investments

(time & money) to obtain.

Control is defined as - Ownership and/or possession over an asset in relation to a graspable/quantifiable time

horizon.

THE ROUSE FRAMEWORK

3 FUNDAMENTAL QUESTIONS

8

I. What are you selling/offering (or intend to sell)?I

I. How do you compete or intend to compete? II

I. How do you sustain/control competitive advantages over time? III

HIGH RESOLUTION MAP OF COMPETITIVE ADVANTAGES AND THEIR DYNAMICS

9

Level of Establishment

Valu

e

A Technology / Offering / Innovation

Value for Whom?

In this specific business context?

A

C

B

How will this change

over time? Digital to physical conversion

Hardware and systems

Intelligence & analytics

LEVEL OF ESTABLISHMENT VS. VALUE RENDERED

10

Valu

e

Level of establishment

Low High

Low Level of Establishment

The future

High risk

Potentially abstract

Trial & Error

Disruptive?

High Level of Establishment

Less differentiation

Med-Low risk

Established business models

Clear value

Easy(ier) to appraise

Perceived Value?

Quantifiable Value?

FINANCIAL VALUE OF KEY AREAS AND UNDERLYING ASSETS

11

Valu

e

Level of establishment

Low High

A

C

B

Area A – Digital to physical conversion

Est. future revenue and profit

contribution Identifying underlying assets and

gaps

Do we need to control this area?

Area B – Intelligence & analytics

Est. future revenue and profit

contribution Identifying underlying assets and

gaps

Do we need to control this area?

Area C – Hardware and systems

Est. Current & future revenue and profit

contribution Identifying underlying assets and gaps

Do we need to control/strengthen our

control of this area?

Estimating future/current revenue stream and profit is typically conducted by income-based financial models/modelling

USE CASE – SOCIAL MEDIA

ROUSE APPROACH TO INNOVATION DUE DILIGENCE

13

Current Situation Action Plan

Typical Steps,

Interviews with identified key

people

Analyze target company,

public data and information

Draft analyzed map and

current control positions

Output: Detailed map of risks, IP

position(s) and external dependencies

Output: Execution plan with the intent of

closing gaps, reduce risk and leverage

investment

Typical Steps,

Identified necessary actions

in terms of own control

positions

Identified necessary actions

in terms of external situation

Plan execution of remedies to

secure value

USE CASE - SOCIAL MEDIA PLATFORM FOR LIVE STREAMED CONTENT

14

Valu

e fo

r end

-use

r

Level of establishment

Low High

Production equip.

USE CASE - SOCIAL MEDIA PLATFORM FOR LIVE STREAMED CONTENT

15

Valu

e fo

r end

-use

r

Level of establishment

Low High

Social media platf.

Connected dev.

Data

Technical

platform

Subscription

model

Production

Business

Acumen

Production

planning

User interface

Live

Content

Ad Solutions

Intelligence/

analysis

Live streamed

Social media

Production equip.

USE CASE - SOCIAL MEDIA PLATFORM FOR LIVE STREAMED CONTENT

16

Valu

e fo

r end

-use

r

Level of establishment

Low High

Social media platf.

Connected dev.

Data

Technical

platform

Subscription

model

Production

Business

Acumen

Production

planning

User interface

Live

Content

Ad Solutions

Intelligence/

analysis

Value is set from the

perspective of the end-

user of the platform Activities arranged in

terms of perceived value

for user

Live streamed

Social media

Activities arranged according

to level of establishment in the

specific context

Key Question:

Current control and own

IP position?

External IP positions and

risks?

External dependencies?

Production equip.

USE CASE - KEY AREAS FOR PLATFORM EXECUTION AND CONTROL POSITIONS

17

Valu

e fo

r end

-use

r

Level of establishment

Low High

Social media

Connected dev.

Data

Technical

platform

Digital Subscription

model

Production

Business

Acumen

Production

planning

User interface

Live

Content

Ad Solutions

Intelligence/

analysis

Revenue modelThe platform is free for end-users, thus the

revenue is generated by a digital ad solution

and a platform specific digital subscription

model.

Value: 50% of 3y cash flow prediction

Risk: High. A highly litigious and IP intensive area

Current Control: Low. A plausible approach is

partnership, to mitigate risk and strengthen

control. Time and cost effective. Technology EnablersThe underlying technology drives the

platform and the value it creates.

Value: Est. 50% of 3y cash flow

prediction

Risks: High risks due to external IP and

low current control

Current control: Low. Considerable

technology assets exists, but currently

only controlled by informal secrecy.

Additional control is needed.

Transactional Object(s)The live streamed content is the USP of

the platform and the driver behind

both users and revenue.

Value: Est. 20-25 MSEK (3y cash flow)

Risks: Medium, given current control

Current Control: Medium. Draft

contracts are in place (needs

amendments).

ROUSE APPROACH TO INNOVATION DUE DILIGENCE

18

Current Situation Action Plan

Typical Steps,

Interviews with identified key

people

Analyze target company,

public data and information

Draft analyzed map and

current control positions

Output: Detailed map of risks, IP

position(s) and external dependencies

Output: Execution plan with the intent of

closing gaps, reduce risk and leverage

investment

Typical Steps,

Identified necessary actions

in terms of own control

positions

Identified necessary actions

in terms of external situation

Plan execution of remedies to

secure value

Conclusions

The strategic approach of an Ecosystem platform is already partly been

initiated by Client and Company X (see appendix F)

An open approach is likely to drive Clients 's Automation offering and

dismantle current (and future) competitors IP positions

Defining the MMS systems functionality in layers is a key task going

forward, as well as securing ownership to valuable (identified) IP for

Client .

ACTION PLAN FOR BUILDING CONTROL – INTELLIGENT SYSTEM

19

No effort”

The opportunities are

easy to capture since

they fit to our strengths

BA

DC

Current status of Activity Summary of Analysis

Potential hinders

Potential risks

Opportunities to

be exploited

Areas for

improvement Level of Establishment and Current Control

External Dependencies High

Level of Establishment Emerging

Movement Fast

Level of Control Low

Secure ownership through contractual arrangement to the following items,

o Code Package A & B

o Algorithm Xx

The following secrecy considerations are required by Client,

o Future data based cause-effect relationships

o Database access

File patent(s) on edge-analysis technology incl. configuration algorithm.

Definition: Intelligent system using visualization and positioning to support increased production

and production assets utilization. The data is derived from Wi-Fi/LTE/RFID beacons.

Leverage openness

No Established ecosystems

exists today

Client’s market position and

strength

Secure ownership to all

valuable IP

Define functionality of

MMS system in layers

Cross-functional

processes alignment

Current relationships with

partners

Conservative industry

Competing platforms

Lack of internal alignment

Lack of partner alignment

Time to market – being late

and thus not being able to

actively drive/partake in

setting a standard

Business Case(s)

Supporting BCs Automate & Increased

utilization

Recommended control Positions

Financial Value (Revenue)

Current (2018) 60 MSEK

Future (5-7 y) 800 – 1200 MSEK

Collaboration & Partner Considerations

Strictly follow layer structure of know-how and IP (See appendix F) when defining Background,

Sideground & foreground.

Drive towards dived-and-conquer exclusivity for the following geographical areas, CN, South America,

North America, Europe and Australia.

Conclusions

The strategic approach of an Ecosystem platform is already partly been

initiated by Client and Company X (see appendix F)

An open approach is likely to drive Clients 's Automation offering and

dismantle current (and future) competitors IP positions

Defining the MMS systems functionality in layers is a key task going

forward, as well as securing ownership to valuable (identified) IP for

Client .

ACTION PLAN FOR BUILDING CONTROL – INTELLIGENT SYSTEM

20

No effort”

The opportunities are

easy to capture since

they fit to our strengths

BA

DC

Current status of Activity Summary of Analysis

Potential hinders

Potential risks

Opportunities to

be exploited

Areas for

improvement Level of Establishment and Current Control

External Dependencies High

Level of Establishment Emerging

Movement Fast

Level of Control Low

Secure ownership through contractual arrangement to the following items,

o Code Package A & B

o Algorithm Xx

The following secrecy considerations are required by Client,

o Future data based cause-effect relationships

o Database access

File patent(s) on edge-analysis technology incl. configuration algorithm.

Definition: Intelligent system using visualization and positioning to support increased production

and production assets utilization. The data is derived from Wi-Fi/LTE/RFID beacons.

Leverage openness

No Established ecosystems

exists today

Client’s market position and

strength

Secure ownership to all

valuable IP

Define functionality of

MMS system in layers

Cross-functional

processes alignment

Current relationships with

partners

Conservative industry

Competing platforms

Lack of internal alignment

Lack of partner alignment

Time to market – being late

and thus not being able to

actively drive/partake in

setting a standard

Business Case(s)

Supporting BCs Automate & Increased

utilization

Recommended Control Positions

Financial Value (Revenue)

Current (2018) 60 MSEK

Future (5-7 y) 800 – 1200 MSEK

Collaboration & Partner Considerations

Strictly follow layer structure of know-how and IP (See appendix F) when defining Background,

Sideground & foreground.

Drive towards dived-and-conquer exclusivity for the following geographical areas, CN, South America,

North America, Europe and Australia.

SUMMARY OF SEMINAR

WRAP UP AND SUMMARY OF TODAY’S SEMINAR

22

KEY TAKE AWAYS

Think control instead of Intellectual Property

IP is not a sufficient tool to control innovation

Innovation is [mostly] intellectual, i.e. establishing

control is key to secure investments

Focus on the context

Appraising control position is primarily done by

appraising context. Legal dimension are

secondary.

Control and Value

The value of any form of

control position is contextual,

thus in order to secure

investments we need to

understand the context.

APPENDIX A – B

APPENDIX A – MULTINATIONAL EQUIPMENT MANUFACTURER (MNC)

24

Level of Establishment

Birth Emerging Established Common

Val

ue c

lient

A

A

D

C A D

Benchmarking

Monitoring

Telematics

Software

A

B

B

Network LTE

Safety

Systems

Open Integration API:s

Data

Analytics

D D

D

CPositionin

g

for Safety

Managem

ent

Software

Auto-Functions Unit

RCS

Platform

Change Management

C

A

Change Management

Telematics

Hardware

A

Estimated Direct Business Value: 75 – 100 MSEK (per annum)

Estimated Indirect Business Value: 1,5 – 2 BSEK (2-3 years)

- Active movement

C

Estimated Direct Business Value: 1 BSEK (per annum)

- Restricted movement

APPENDIX B – AUTONOMOUS DRIVING VEHICLES (SCALE-UP)

25

Level of Establishment

Birth Emerging Established Common

Val

ue c

lient

CAN-BUS

Sensors

OEM

Backend

API

Aggregation

B

Specific

data

Normalization

3rd

Party

AppsValidationOTAP

Algo

tune

C

Clustering

DSD &

LoadG

EF

Algorithm

Parameter

tuning

DCL

SPP

3rd

Party

Data

Offering

Local Map

matcher

A

Forecast

A/B/C: Parts of the value chain is required a controlled level of

openness

Business implication: Without this approach no OEM will adopt

the technology (dual sourcing issues and transactional costs of

technology adoption).

Business value: Reduced time to market by 5-8 years (subjected

to platform renewals).

D/E/F/G: Strict controlled is required reduce movement

towards common.

Business implication: Core competitive advantages lies in these

activities. To sustain these over time is crucial for client.

Business value: 10-15 m€ over 5 years.

Comment: High and unique customer value activities requires

openness to be leverage on the market. Lower customer value

activities however requires strict control in order to sustain

competitive advantages.

SECTION BREAK

Thank you!