Investing in Intellectual Property is a Growing Challenge for Unicorns, Litigants, Technology

The value of most companies’ today is derived from their intellectual property. So why are IP rights, especially patents, so difficult for investors to understand and measure? 

Lack of awareness of intellectual property risk and changing trends in the law frequently lead to poor decision-making, say two IP investment veterans.

In newly released episode 8 of season 2 of ‘Understanding IP Matters,’ the podcast series from the Center for Intellectual Property Understanding, the discussion focuses on what today’s patents and other rights can and can not achieve.

The resources for this episode, Efrat Kasznik, an IP financial expert, who works with highly valued private companies on transactions and other matters from Silicon Valley, and Adam Gill, Managing Director at GLS Capital, who was a partner at Kirkland & Ellis and has represented a range of patent infringement defendants and plaintiffs.

Big Win

It was announced on Friday that Samsung Electronics Co. has agreed to pay $150 million to end Nanoco Technologies Ltd.’s lawsuit accusing it of infringing five television display patents. Nanoco’s litigation funding partner is GLS Capital.

While Intellectual property and IP rights are responsible for as much as 90% of company value today, making investments in IP and IP rights, directly or indirectly, is fraught with confusion, because measuring return, exclusive of direct licensing or damages awards, is never simple.

Not Well-Understood

Who is an IP investor? What do they need to know?

Intellectual property is the primary reason most companies are valuable today, but making investments in inventions and patents still isn’t well-understood, says Forbes innovation columnist, Madeleine Key, writing about the episode in a recent IPWatchdog.

“As creators develop a roadmap for profiting from their output,” says Key, “understanding the mechanisms for valuing and monetizing intellectual property are crucial.”

In IP Investing — What Is It? Who Does It? Why It Matters,” the latest episode of the podcast ‘Understanding IP Matters’, which dropped this week, listeners can hear about importance of an accurate and objective risk assessment, and how it has changed over time with technology and the law.

It was announced on Friday that Samsung Electronics Co. has agreed to pay $150 million to end Nanoco Technologies Ltd.’s lawsuit

Today, many e-commerce, Internet and software companies can achieve billion dollar valuations without significant patents.  Inventors and businesses that have invested heavily in inventions and rights, frequently see them ignored by infringers who have the resources and time not to take a license.

Listen to Season 2, Episode 8

Efrat Kasznik is the president of Foresight Valuation Group, a Silicon Valley-based intellectual property consulting firm that works with businesses ranging from startups to Fortune 100 companies. She has been a lecturer at the Stanford Graduate School of Business for over a decade and is a designated co-inventor on patents related to energy use. She is an expert in unicorns use of IP rights to create value.

Adam Gill is the founder and managing director of Chicago-based GLS Capital, a litigation capital provider that funds less than 2% of the opportunities it sees. Adam leads patent related investments and sits on the firm’s investment and valuation committees. Previously, he was a partner in the IP litigation practice at Kirkland & Ellis LLP.


Listen here to the Understanding IP Matters’ IP investing episode, “What is it? Who does it? Why it matters.” 

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