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PATENTING AND LICENSING, ITS TRUE VALUE AND LIMITATION

2ND RESEARCH & INNOVATION SUMMIT 2015


GULF PETROCHEMICALS & CHEMICALS ASSOCIATION (GPCA)

March 18, 2015


John K. Abokhair, J.D.
Senior Director
Chief Intellectual Property Counsel, Legal Affairs
Saudi Basic Industries Corp. (SABIC)

AGENDA

What is a Patent

Degrees of value or expertise


AT SABIC

VALUATION Examples

No. 1

PATENTS: WHAT AND WHY


What:
Agreement with GOVERNMENT
Applicant receives exclusive right of exploitation of the invention
During limited period (20 yrs)
Within Country
In return for publication of the invention

> disclosure must be clear and complete


WHY:
To stimulate industrial activities / economy
To encourage R&D investments

No. 2

PATENT RIGHTS ARE EXCLUSIVE

Right to prevent others from making, using,


selling, or importing the patented invention
Not a right to make, use, or sell the invention
yourself- determining freedom to operate or
freedom to practice is separate from the patent
application process

No. 3

INTELLECTUAL PROPERTY PHASES

Reactionary
Reactionary sporadic
push from inventor
Limited knowledge on
value of patents

Limited alignment with


business objectives
No value add analysis

Value Add
Proactive substantial
pull from IP and T&I
leadership
Knowledgeable
workforce training has
resulted in improved IP
IQ
Inventions tied to
business objectives and
strategic value

Profit Maximizing

IP seen as a profit
center
Outbound licensing
established
Patent portfolio value
review
Inventing open to all
Active enforcement of
rights

Focus on patents for


margin enhancement
monetizing innovation

No. 4

SABIC

TOTAL SABIC IP ESTATE

>10,600
Patent Dockets

>4500

Filed and
Pending

PATENT
ESTATE
365
>6100

Others
Grant
No. 6

2014

2010

2011

2012

2013

2014

No. 7

PATENT PROCESS
Business/Manufacturing
Market use

Patents

R&D
Technology

IP Legal Team
Patent strategy and
management

No. 8

Considerations for Evaluating an Invention for Patent Filing

How would a patent help achieve the business


objectives?
1. Economic Impact (EI)

High (9)

Medium (3)

Low (1)

2. Market Interest (MI)

High (9)

Medium (3)

Low (1)

3. Detectability (D)

Easy (9)

Mod. Difficult (3)

Difficult (1)

4. Design-Around (DA)

Difficult (9)

Mod. Difficult (3)

Easy (1)

Additional relevant information?


Lower bar for filing application, but higher bar for maintaining patent
(high scrutiny for potential past 10 years)
No. 9

PATENT RATING CRITERIA WHEN USED?

Initial invention disclosure review

Prior to filing after claims have been drafted


Prior to secondary filings (PCT, International
designation)

After allowance: comparison of allowed claims


versus initial draft
At each fee (issuance, annuity, maintenance)
evaluation
No. 10

INTELLECTUAL PROPERTY - PATENTS

VALUATION EXAMPLES

APPROACHES TO PATENT VALUE

Patents as a Business Tool


Covers sold products
Prevents others from
offering a me too productsimilar
Can license to customers
Can create new customers
based on our technology
Improves our reputations
as an innovation leader

Examples
Energy Absorber
Technology licenses: ABS,
PC, LAO
New customer after their
failed opposition
Trade licenses with others

No. 12

REPUTATION- INNOVATION
WE HAVE SEEN ENHANCED COVERAGE FOR SABIC AND
INNOVATION

SEVERAL INDEPENDENT ORGANIZATIONS VALUE THE


COMPANY RANKING BASED ON ITS INTELLECTUAL PROPERTY
ESTATE (PATENTS)
SOME USE PATENTS AS ONE OF SEVERAL MEASURES FOR
R&D RESULTS
OUR IP ESTATE IS A FACTOR WHEN NEGOTIATING WITH OTHERS
RELATIVE TO TECHNOLOGY COOPERATION OR JOINT
DEVELOPMENT

No. 13

VALUE LICENSING OF TECHNOLOGY


MOST VISIBLE:

LICENSE TECHNOLOGY TO OTHERS

FROM SABIC:
POLYCARBONATES
LAO

PHENOLS

HIGH RETURNS - $100s Millions


REQUIRES HIGHER SUPPORT AND INVESTMENT
No. 14

PROTECT NEWLY CREATED MARKETS


WE SPEND SIGNIFICANT RESOURCES (PEOPLE,
MONEY) ON CREATING NEW USES FOR OUR
MATERIALS (NEW MARKETS)
USE PATENTS AS A TOOL TO ALLOW US TO RECEIVE A
RETURN ON OUR INVESTMENT
EXAMPLES:
AUTOMOTIVE: ENERGY ABSORBERS
UNIQUE FIBERS FROM OUR HIGH HEAT PLASTICS
SPECIAL VISUAL EFFECT PRODUCTS SUCH AS GOLF CARTS AND
BATHTUBS
No. 15

TRADING VALUE
MONITOR COMPETITION AND IMPACT ON OUR
NEW PRODUCTS AND PROCESSES
IDENTIFY CERTAIN PATENTS OF INTEREST
TRY TO NEGOTIATE WITH OWNERS TO REMOVE
THOSE AS POTENTIAL BARRIERS TO OUR
ADVANCEMENTS
OWNER USUALLY WANTS SOMETHING FROM US
MONEY or
SIMILAR PATENTS OF INTEREST TO THEIR
COMPANY
WE CAN USE OUR PATENTS TO TRADE IN
CERTAIN GEOGRAPHIES OR FIELDS
No. 16

THANK YOU!
QUESTIONS?