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San Francisco, September 20, 2004
Maximizing the value of Intellectual Property

The Opportunity

A variety of economic and market conditions, have left many US and International technology-based companies/projects struggling for ROI, profitability, as well as generating a sustained revenue base. As a result, a significant amount of Intellectual Property (IP) assets are being under-utilized and there is an opportunity for these IP assets to be sold, licensed, or serve as a foundation for M&A, valuable partnerships or start-up ventures.

While the US economy continues to recover and capital returns to fuel new and existing corporations, numerous buy-out funds have been created to capitalize on earlier efforts to develop technology. These funds are actively looking for companies or for IP which can be spun-off or acquired. Also, larger corporations are looking for ways to increase shareholder value by leveraging their IP.

Based on today's market conditions, European companies could benefit from seeking opportunities and relationships to support their efforts to enter the US market. Earlier attempts by European companies to approach the US market in order to maximize the value of their IP, have sometimes been supported by export-focused programs (often funded/supported by their local governments), their own internal task forces placed in strategic US locations, or relationships with US entities. Most of these programs have now been canceled or drastically reduced, and only a few European companies have managed to create successful local teams and maintain relationships.

In response to this opportunity, Gerbsman Partners and McDermott Will & Emery has formed an Alliance that creates a proven resource to these companies for "Mining" and developing revenue opportunities based on existing IP.

The Alliance for Maximizing Value of Intellectual Property

The alliance for Maximizing value of Intellectual Property will be focusing on:

  • Strategic relationships, licensing and/or merger and acquisition, for international technology companies seeking distribution channels for their Intellectual Property.
  • Proper legal documentation and protection strategies for the company's Intellectual Property.
  • Alternatives for capitalization, commercialization, and maximizing value of intellectual assets.
  • Creating new IP-driven revenue streams and distribution channels to maximize enterprise, stakeholder and shareholder value.

These companies typically will be:

  • International Telecom and Wireless companies with significant intellectual assets and technologies that can be leveraged into other industries and applications;
  • Under-capitalized and under-valued venture capital/private equity-backed or smaller public companies who:
    1. have performed R&D and quality assurance,
    2. have a working Beta test or field operable product(s),
    3. have patents, trademarks, copyrights, logos, systems, processes, and channels of distribution and other intellectual assets that can be leveraged.

Gerbsman Partners and McDermott Will & Emery will assist clients in the development of intellectual capital leveraging strategies and transactions.

Our Process

We define the Intellectual Property as the:

  • Patents and technology
  • Copyrights and creative works
  • Brands, trademarks and domain names
  • Trade secrets and confidential information
  • Customers, vendors and other strategic relationships
  • Know how and show how
  • Trade press
  • The process for developing the technology including custom made tools and utilities, prototypes, lab reports, etc
  • Source code, documentation, presentations, specifications, and other related documents
  • The associated Intellectual Capital

Our action plan and time-line for the utilization of underleveraged intellectual property includes:

Step One - Strategic and legal audit of marketable IP (3 weeks)

  1. Analyze the company's IP for direct and indirect applications.
  2. Select what IP to market first and secure resources needed for step 2 and 3.

Step Two - Prepare prospect/distribution list (3 weeks)

  1. Identify top prospects together with company, equity investor(s) and other sources.
  2. Analyze current customers and competitors - 'who is out there that could benefit from access or ownership of our IP?'
  3. Draw up an additional list of qualified equity investors, investment bankers, lawyers, accounting firms and technology/Internet-related organizations in order to offer the IP to their portfolio companies and/or investments.
  4. Prepare written summaries for prospective purchasers, licensees and partners.
  5. Distribute the offer.

Step Three - Manage the process (4 to 10 weeks)

  1. Follow up, distribute overview presentations, and respond to interested parties.
  2. Prepare due diligence sessions, set due diligence date(s), and manage due diligence sessions.
  3. Set formal date for responses. If auction, set bidding date and bidding process.
  4. Strategic and/or legal assistance in closing the transaction.

Our assignments starts with detailed definition of tasks and time-line, setting milestones, identifying the team and resources, and establishing project management and reporting. The most critical decision points are to continue after Step One or not, what IP to market first, and weather to accept a proposed transaction or not. The process needs support from many parts of the organization, especially in terms of sponsorship and the people who developed the IP, and initial success is important to maintain a high level of motivation. For corporations with abundant IP supply, Step One can be fairly time consuming. In those cases we recommend our clients to focus on specific areas and gradually work their way through it.

Who We Are

Steven Gerbsman, Gerbsman Partners

Steven R. Gerbsman is an internationally recognized Crisis Manager and Private Investment Banker, with a focus on maximizing enterprise, stakeholder and shareholder value.

Gerbsman Partners provides the following services:

  • Maximizing Value of Intellectual Property
  • Private Investment Banking
  • Balance Sheet Restructuring
  • Crisis/Turnaround Management
  • Domain Expertise - Technology & Wireless

Gerbsman Partners has been involved in transactions totaling more then $ 1.5 billion and utilizes proven, seasoned, and experienced CEOs, CFOs, Investment Bankers and an International Board of Intellectual Capital.

Andrew Sherman, McDermott Will & Emery LLP

Andrew J. Sherman is a Capital Partner in the Washington, D.C. office of McDermott Will & Emery LLP, an international commercial law firm with over one thousand (1,000) attorneys worldwide. Mr. Sherman is a recognized international authority on the strategic and legal issues affecting business growth, with a focus on the protection and leveraging of intellectual property. Mr. Sherman also serves as a business growth strategist, with a focus on both external growth strategies (such as franchising, licensing, joint ventures and strategic alliances) as well as internal growth strategies (such as capital formation, technology development and mergers and acquisitions). He is the co-developer and a leader of the Firm's Intellectual Property Protection and Leveraging Analysis (IPPLA) practice.

Mr. Sherman serves as legal counsel to over two hundred (200) franchisors, licensors of intellectual property, entrepreneurs and emerging growth businesses. He has represented clients and served as counsel on international franchising projects, technology transfer, licensing, joint ventures, acquisitions, brand-extension licensing, co-branding and general business transactions in over thirty (30) countries and throughout the world.

Mr. Sherman represents both international and domestic owners of intellectual property. He has worked on projects for clients which range in size from over two dozen multi-billion dollar international conglomerates such as Texaco, Intel, America Online (AOL), Owens Corning, Caterpillar, Shell Oil, Revlon, General Dynamics, Panasonic, Sanyo, Metrocall, Bankers Trust, GAF Corporation, the Scott Fetzer Companies (a division of Berkshire Hathaway), and IDT/Winstar Communications, to a wide range of early-stage, rapidly-growing, publicly-traded, and closely-held franchisors, licensors and middle market companies.

Additional Information

For additional information, please visit our websites at www.gerbsmanpartners.com and www.mwe.com or contact:

Steven R. Gerbsman
+1 415 456 0628
Steve@GerbsmanPartners.com
Gunnar Östergren
+1 415 205 5700
Gunnar@GerbsmanPartners.com
Andrew Sherman
+1 202 756 8610
ajsherman@mwe.com
Svante Rödegård
+1 415 810 0910
svante@rodegard.com
 Motti Abramovitz
+972 54 774 762
Motti@GerbsmanPartners.com

Gerbsman Partners
211 Laurel Grove Avenue, Kentfield, CA 94904
Phone: +1.415.456.0628, Fax: +1.415.459.2278
Email: Info@GerbsmanPartners.com
Web: www.gerbsmanpartners.com
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