Delivering

innovation that
matters to you
Brian Hinman
CEO, Philips Intellectual Property and Standards
Chief Intellectual Property Officer, Royal Philips

Our vision

At Philips we strive to make the world

healthier and more sustainable through
innovation.
Our goal is to improve the lives of
3 billion people a year by 2025.
We will be the best place to work for
people who share our passion.
Together we will deliver superior value for
our customers and shareholders.

A born innovator

Philips founding fathers: Frederik, Gerard and Anton Philips

Founded in 1891, in Eindhoven, The Netherlands, to manufacture incandescent lamps and other electrical products.
For more than 120 years, we have been improving peoples lives with a steady flow of ground-breaking innovations.

Royal Philips
Est.

1891

Headquarters in
Amsterdam, Netherlands

37%
Lighting

42%

113,000+

Healthcare

Employees worldwide
in 100+ countries

23.3

billion

Sales in 2013
Portfolio 70% B2B

21%
Consumer Lifestyle

Based on sales last 12 months June 2014 (Excluding Central sector (IG&S)

$9.8

billion

Brand value in 2013

Presence in more than +100 countries

Philips revenue across geographies

36%

30%

26%

8%

Growth
geographies

North
America

Western
Europe

Other mature
geographies

Based on sales last 12 months June 2014

Growth geographies are all geographies excluding USA, Canada, Western Europe, Australia, New Zealand, South Korea, Japan and Israel

Presence in more than +100 countries

Philips seven largest markets

Netherlands

669

China

million
Germany
North America

6,4
billion

UK

1,4

692

billion

million
France

915
million

Seven largest markets by sales in 2013.

2,9
billion
Japan

1,0
billion

Presence in more than +100 countries

Philips has R&D sites and manufacturing in all continents

North America
Asia

Employees: 29.233
R&D centers: 22
Manufacturing sites: 40

Employees: 40.438
R&D centers: 13
Manufacturing sites: 25

EMEA
Latin America
Employees: 3.189
R&D centers: 3
Manufacturing sites: 6

Source: Philips Annual Report 2013.

Employees: 41.829
R&D centers: 21
Manufacturing sites: 25

We manage a dynamic
portfolio and we turn
unexpected possibilities into
great innovations

+40

64.000

businesses

patents

7%
of sales

in R&D

We hold unique leadership positions globally

Healthcare
Cardiovascular
X-ray

Patient
Monitoring

Image-Guided
interventions

Sleep Therapy
Systems

Ultrasound

Male Electric
Shaving

Electric Hair Care

Rechargeable
Toothbrushes

Mother & Child

Care

Kitchen
Appliances

Lamps

LED Lamps

Automotive
Lighting

Professional
Luminaires

High-performance
LED

Consumer
Lifestyle

Lighting

Global or Regional #1 or #2 position in the market

Philips Brand:
Bringing innovation and you together
With our global presence in over 100 countries - and our
trusted brand, we are uniquely placed to understand the
local challenges people face.

10

Everyone working together to make

Philips a stronger brand
One brand promise
Consistent brand experience
Driving brand preference
Generating brand value

11

9.8

+8%

USD billion

vs. last year

Brand value

Growth

Source: Interbrand Best Global Brands 2013 ranking

12

Philips IP&S Corporate video

13

FIRST VIEW

We define IP strategies based on business strategies and key IP

and industry parameters
Key IP strategy input parameters

Assess key
parameters

Business
strategy
Evaluate
additional
parameters

14

IP strategy

Philips basic IP position

3rd party IP position
Industry maturity

Business control points

IP risk
Identified
differentiating
capabilities
Technology
characteristics
Assess competitive
technology landscape
and trends
Industry
fragmentation and
segment market
shares
Other barriers to entry
Role of software /
services / solutions
Importance of
platforms /
ecosystems

Value
model

IP portfolio
management

Define models: exclusivity, commercial,

mitigation, defensive (incl. market
penetration of our technology)
Evaluate current patent utilization
Define exclusivity enforcement level
Use Sector IP benefits model to assess
IP value
Define IP needs
Identify portfolio generation
opportunities
Right mix of patents, designs, trade
secrets & trademarks
Defined protection layers
Define country filing scheme
Define IP conditions for 3rd party
cooperations

Business
implications
Identify risks and
opportunity
Review decision to
enter a market /
adjacency
Review plans to
continue a business
Review R&D
intensity and
programs based on
identified IP
portfolio generation
opportunity
Identify M&A
targets

15

Pro-active IP portfolio management process enables

structural capturing of IP value
Needs
identification

Portfolio building

On-going optimization / Revaluation

Maintain as is

IP needs
identification

Opportunity
filtering

Case
development

Case
realization

Capture value

Expire

(license / enforce / litigation / sell)

Terminate

Define innovation
needs for short
median long
term
Create portfolio
plan in accordance
with IP strategy

Assess inflow and build portfolio from all

sources (internal & external)
Deploy different IP portfolio building options
covering relevant IP types in relevant countries
Use IP acquisition pro actively to enter new
domains

Revaluate the portfolio in cycles with different

views such that all IP is assessed at least once
every 3 years to identify optimization needs
Realize value via various ways: maintain or
capture value (license-out / enforce / litigation
/ sell)

Strategy driven & strategy driving; Integrated Intellectual Asset Management

16

Philips has developed the worlds most

sophisticated IP Benefits Model
Objectives
Overall objective is to

maximize value out of

the Philips IP portfolio
Rigorous methodology

for determining optimal

IP value model for Philips
Understand synergy
(e.g. platform, data)
effects
Integrate
perspectives from
e.g. B/M, research
Lean governance that

ensures decision making

at appropriate level
Mechanism for

addressing stalemates

17

Strengths

The model enables to measure

value enabled through key
IP&S activities
Quantify the IP
component of business
results (incl. details by
feature, types of IP etc.)
Create awareness on the
importance of IP
Measure the NPV of
transactions realized and
understand the value of
our IP portfolio
Aid resource allocation
decisions (benefits vs.
costs)
Input for business
strategy definition
Reference tool for
accounting treatments

Reliability

Recognition

Shows impact of IP in the period

and going forward
Bottom-up, granular approach by
feature/product group
Using multiple data points as
reference

Adequate level of recognition inside

IP&S
High level calibration done with
each BG GMs
Alignment within each BG to ensure
viability and acceptance of model

Can be used:
As KPI for IP&S (NPV of
transactions)
For licensing vs exclusivity cases
To track under utilization of IP
Accountability
potential by business
To flag the impact of expiring IP
protection
For long term target setting
towards businesses

Philips delivers
innovation
that matters to you
18

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