A protein design and engineering company operating in the Life Sciences sector.
The Company had developed an innovative process for the immobilization of proteins onto surface, which offered a significant improvement on a common procedure within Life Sciences. To commercialize this process, management filed the underlying core patent in a number of key territories and had signed a joint venture (“JV”) agreement with a listed multinational entity in Asia to manufacture medical devices. The JV partner had the manufacturing capacity and existing traction in the Asian market; the Company’s contribution to the JV was the patent-protected technology and process.
As the manufacturing of the associated devices was due to commence, it transpired that the patent attorney responsible for renewing the patent in the key territory had failed to do so. As a result, the Company had lost the patent protection in that territory; undermining the potential commercialization of the IP in one of the fastest and most innovative markets for medical devices.
The assignment was referred to us by the Company’s lawyer, who we had previously worked with and who trusted us to perform an IP valuation with professional rigour that would withstand scrutiny from other third parties. The patent attorney had already admitted fault and the parties were now in negotiations to decide the appropriate level of financial compensation as part of a settlement, to avoid court proceedings. The attorney had made an offer that was entirely unacceptable to the Company and was a fraction of the cost to develop the technology. Metis Partners was asked to provide a professional IP Valuation of the Company’s core patent, based on its commercialization in the key territory to help the Company’s efforts to increase the compensation.
We conducted an initial Information Discovery Call with management in order to gain a fuller understanding of the Company’s business strategy to date, market position, competitive advantage, and the key assumptions underlying the Company’s financial forecasts. Our primary focus was on the elements most relevant to the Company’s opportunities in the relevant market and the commercial impact of the patent being lapsed.
A valuation method was selected based on the purpose of the valuation and the specific attributes of the Company. Since the patent would have contributed to the generation of the Company’s revenues, the income method, and specifically the Relief from Royalty Method, was determined to be the most appropriate. We performed the valuation at a date immediately prior to the lapse of the patent and assessed the potential returns from commercialization of the protected patent. It was clear from our analysis that the lapsed patent was crucial to the JV and with a lack of protection, there was little certainty over future revenues and success of the JV, given that there was now no significant barrier to entry for competitors.
Metis Partners provided an IP Valuation and worked closely with the Company’s lawyers, helping them to understand how the valuation figure was arrived at and why it was appropriate. This ensured that the lawyers could confidently negotiate with the patent attorney’s insurer and strengthened their argument as to why the insurer’s financial compensation offer was not acceptable.
