IP Technology Trading - Innovative Model

Transcription

1 IP Technology Trading - Innovative Model Technology Transfer in China Jinyong CHANG President Shenzhen United Property and Share Rights Exchange April, 2013

2 Contents: 1 Shenzhen Development 2 Technology Transfer (IP) Innovative Model 3 Introduction of UPEX

3 A City of Legend and its road of innovation Early 1990 s China s first Special Economic Zone founded in 1978 Reform and Open Policy leads to a rapid economic growth for Shenzhen A small fishing village to a modern immigrant city with over 15 million population

4 Geographical Advantage Adjoins to Hong Kong 2 hr to reach Shanghai, Chongqing, Taipei and most of the major cities in China 3 hr to reach Beijing, Tokyo, Seoul, Bangkok and most of the major cities in Asia Shenzhen 6 hr radius covers entire China and Asia

5 Transportation Hubs 18 transportation ports covering land, sea, and air The 4th largest container port in the world Four 24 hour crossing borders connecting Shenzhen and Hong Kong Major Trade Partners Hong Kong No 1 City in total export volume for 19 consecutive years in China Japan Shenzhen USA 188 Fortune 500 corporations have invested in Shenzhen EU ASEAN

6 Invest in innovation & Contribution of Technological Development to Economy 715 R&D institutions/facilities 43 billion RMB (7 billion USD) in 2011, 366% GDP Over 029 million R&D professionals Innovation Outcome: GDP of Hi-Tech Industries exceeded 11 trillion RMB (1774 billion USD), 56% of industrial GDP in 2011 The total economy equals to a mid-size province in China, ranks No billion RMB (292 billion USD) annual increase of Bio Tech, Internet, and Alternative Energy accounted 16% contribution to GDP 4G Mobile Communication and Stern Cell research ability leads the world Example: Tencent is a top three global internet corporation, No1 instant message service provider in the world

7 Industrial Clusters Tele- Communic ation Hardware Software Bio-Tech New Materials Alternative Energy Approximately 420 thousand SMEs based in Shenzhen, over 30 thousand are innovative corporations (hi-tech related) in 2011 Two with annual revenue exceeded 100 billion RMB, 13 with annual revenue exceeded 10 billion RMB, over 700 with annual revenue exceeded 100 million RMB IP rich corporations: ZTE and Huawei ranked No1 and No3 in PCT Patent Application world wide

8 Technological Innovation Improves Living Standard Energy saving and recycling technology improves living standard: Every square kilometer produces 589 million RMB GDP, No1 in China Energy cost decreased to 047 ton standard coal per 10 thousand RMB GDP produced, 1/2 average energy cost in China Water consume decreased to 17 cubic meter per 10 thousand RMB GDP produced, 1/10 of the average water consume in China Alternative energy public transportation: over 3,000 electric vehicle in use, No1 in the world GDP per capital exceeded 18,000 USD in 2011 Innovation Driven Economy

9 Intellectual Property Development PCT Application 55% 45% Shenzhen Rest of China First National Intellectual Property Demonstration City in China No 1 for 9 consecutive years in PCT Patent Application As an Economic Special Zone, Shenzhen Municipal Government is able to create and implement regulation and legislation policy on IP development: Annual announcement of <Shenzhen IP Development White Paper> <Technological Innovation Promotion Policy> <Technology Transfer Regulation Policy>

10 Shenzhen: Not only China s Silicon Valley but also a City of Venture Capital Logistics Cultural 112 B 77 B 156 B Service- Finance No of VC Funds: Around 3000 Hi-Tech 374 B Capital Scale: 300 billions RMB (Around 50 billion USD) =1/3 of Aggregate China Capital Scale Projects Funded> 3500 Hi-Tech Enterprises Listed on Stock Market domestically and internationally > 300 UPEX has incubated 67 public companies Annual GDP increased of 2011 Update to Dec of 2012

11 Technology 55% 45% Transfer (IP) Innovative Model

12 55% 45% Methods: A Separation of Beneficial Right from Ownership in Trading B IP Monetization in Equity Trading by Setting Up a Company

13 A Separation of Beneficial Rights from Ownership in Trading Concept: Separation of Beneficial Rights from Ownership in Trading means trading of standardized unit beneficiary certificates in the market for patented technologies The subject of the aforesaid unit certificates is generated from the usufruct of certain patented technology which has been processed using standard procedures in advance The purchasers of the aforesaid unit certificates will receive the benefit of revenue accordingly and be entitled to transfer them in Secondary Market

14 Advantages: Reduce difficulty in technology transfer Increase transparency in technology trading market Increase success rate in IP trading Increase revenue and lower risk in investment

15 Case 1: Timing Beneficial Rights Certificate Example: To commercialize a new medicine used for curing arthritis requires a $ 5 million in capital Financial plan is designed as following Separation of Beneficial Rights $ 100,000 1 person holding 1 standard share $ 5 millions 50 shares of 3 year/$5 million certificate is issued by IP trading platform $ 100,000 $ 100,000 $ 100,000 1 person holding multiple standard shares 50 standard shares in total

16 Case 1: Timing Beneficial Rights Certificate Revenue/Return $ 1 million 1 standard share has 330% annual rate of return $ 1 million $ 50 millions 3 year period achieves revenue of $ 50 millions $ 1 million $ 1 million 50 standard shares in total

17 Case 2: Piece Beneficial Rights Certificate Example: A new type of multi-layer coating technology used on cell phone camera lens requires a $ 5 million in capital Financial plan is designed as following Separation of Beneficial Rights $ 100,000 per 2 million pieces 1 person holding 1 standard share 100 million pieces $ 5 millions 50 shares of 100 million piece/$5 million certificate is issued by technology trading platform $ 100,000 per 2 million pieces $ 100,000 per 2 million pieces $ 100,000 per 2 million pieces 1 person holding multiple standard shares 50 standard shares in total

18 Case 2: Piece Beneficial Rights Certificate Revenue/Return $ 1 million per 2 million pieces 1 standard share s rate of investment return 100 million pieces $ 50 millions Every piece sold certificate achieves $05 revenue $ 1 million per 2 million pieces $ 1 million per 2 million pieces $ 1 million per 2 million pieces 50 standard shares in total

19 B IP Monetization in Equity Trading by Setting up a company Concept: To reduce the difficulty of technology transfer and the risk of investing in technology, for the technology that can be transferred once and for all, technology transfer can take the form of setting up a company through raising capital for the patented technologies

20 Valuation: 1 IP Valuation: estimate the value of the technology (IPV1) 2 Commercialization Capital Needed (IPV2) 3 IPV1 + IPV2 = total amount to raise capital

21 Case 1: Patent holder Joins the Company and Becomes Share Holder Example: A new type of multi-layer coating technology used on cell phone camera lens requires a $ 5 million in capital Financial trade plan is designed when the patent holder joins the company and becomes share holder IP to Share $ 0 $ 0 Patent holder receives 2 shares for IP contribution $ 5 millions If IPV1 = $ 1 million, IPV2 = $ 4 million, the total amount of capital needed is $ 5 million, technology trading platform issues a $ 5 million PE project for 48 shares, each share is $ 104,170 $ 104,170 $ 104,170 Capital invest for 1 standard share 48 shares

22 Case 2: Patent holder Doesn t Join the Company Example: A new type of multi-layer coating technology used on cell phone camera lens requires a $ 5 million in capital Financial trade plan is designed when the patent holder doesn t join the company $ 100,000 Capital needed for 1 share $ 100,000 $ 5 millions Technology trading platform issues a 50 share $ 5 million PE project, each share is $ 100,000 $ 100,000 $ 100, shares in total

23 Our Organization Shenzhen United Property and Share Rights Exchange (UPEX) Technology Transfer Center Private Equity Litigation Assets Emission Rights Cultural Assets State-owned Assets UPEX Financial Assets Regional Over-the-Counter (OTC) Market Comprehensive property/assets trading marketplace Most profitable trading platform in China 480+ hi-tech non-public shareholding companies are currently listing 67 companies IPO in Mainland China, Hong Kong and United States

24 Performance of UPEX ( ) Annual transaction amount in billion RMB Non-public companies custodian and listed Number of transactions witnessed Source: UPEX 2012

25 Our Investment Funds UPEX Nanhai Growth Fund China s first partnership investment fund Est 2007, 5+ billion CAC Capital Floor (direct) fund Est 2009, 13+ billion Consumer electronics & high-end manufacturing, new material, Internet, medical & health care, and other emerging industries

26 Public Companies INCUBATED by UPEX By the end of 2012, 67 former SMEs listed on UPEX had finished IPOs in Mainland China, Hong Kong, and United States Shenzhen Shenzhen United Property United Property and Share and Rights Share Exchange Rights Exchange All Rights (UPEX) Reserved All Rights Reserved

27 Technology + Finance - Systems Using customized financial tools, services and trading subjects to facilitate the capitalization/monetization of IP to over come the difficulty of pricing and standardizing IP, guiding investment capital to invest in start-ups and technology Capitalization Trading System Support/Guide Evaluation System Index Family Support/Adjust Data Base Expert Committee

28 Technology Assets/Intellectual Property Bank - Systems Cross border Regional/domestic IP rich corporation Universities/R&D institutions Emerging industries Modern Agriculture Systematical Support Evaluation Trading Management Financial Services Over the Counter Market (Merger & Acquisition) Four supporting systems and six trading sections can assist to identify and filter good quality investment subject for OTC market

29 Index Family China IP 180 Index (code: ) 1 China s first Stock Index based on public companies IP Value ( 中 国 第 一 支 基 于 上 市 公 司 无 形 资 产 价 值 的 股 票 指 数 ) 2 Selected constituents with objective and quantitative factors( 以 客 观 量 化 指 标 衡 量 上 市 公 司 智 能 资 产, 并 以 此 作 为 样 本 股 的 标 准 ) 3 Prior to announcement, a five-year back test shows an increase of 34623% ( 上 线 前 的 五 年 回 归 测 试 显 示 34623% 的 增 长 ) 4 Reflects the economy driving factor changed from resources to innovation in China ( 反 映 企 业 发 展 方 式 由 资 源 驱 动 向 创 新 驱 动 转 变, 彰 显 知 识 经 济 时 代 特 征 ) Shenzhen Shenzhen United Property United Property and Share and Rights Share Exchange Rights Exchange All Rights (UPEX) Reserved All Rights Reserved

30 US/China IP 200 Index Index Family World s first stock index based on the value of both US and Chinese intellectual property Comprised of the top 100 companies that own the most valuable US and Chinese intellectual property Index allows the investment community to observe the performance of US and Chinese companies that share a common strength in commercializing patented technology Shenzhen Shenzhen United Property United Property and Share and Rights Share Exchange Rights Exchange All Rights (UPEX) Reserved All Rights Reserved

31 2013 World IP Economic Forum (Shenzhen) Organizers: Shenzhen United Property and Share Rights Exchange (UPEX) Ocean Tomo, LLC Theme Party Host: Intellectual Assets Magazine (IAM) Time: Nov 14 and 15, 2013 Location: Shenzhen, China Our Nov Event Shenzhen Shenzhen United Property United Property and Share and Rights Share Exchange Rights Exchange All Rights (UPEX) Reserved All Rights Reserved

32 Thank you And Welcome to Shenzhen! Jinyong CHANG President Shenzhen United Property and Share Rights Exchange (UPEX) Shenzhen Shenzhen United Property United Property and Share and Rights Share Exchange Rights Exchange All Rights (UPEX) Reserved All Rights Reserved