0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 10 10 10 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 1 0 0 10 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 10 10 0 1 0 1 0 0 1 0 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 0 1 0 00 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 1 10 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 1 10 0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 1 10 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 0 0 0 0 1 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 10 0 10 0 10 0 10 0 10 10 0 10 0 10 0 10 0 0 0 10 0 0 1 0 1 0 0 0 1 0 0 1 1 00 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 10 0 10 0 0 1 0 0 0 0 0 INTELLECTUAL PROPERTY 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 Maximising the investment in your IP 1 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 10 0 1 0 1 0 0 0 0 0 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 1 0 0 0 10 0 1 10 10 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 10 10 1 0 0 0 0 0 1 1 0 1 0 0 0 0 1 10 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 0 0 1 0 1 0 0 0 1 0 0 1 0 1 CHANGING THE 0 0 0 1 0 0 PUSHING 1 0 1 0 NARRATIVE 1 10 0 BOUNDARIES 10 0 10 0 IP100 RESULTS 0 0 0 0 1 1 0 0 0 0 0 1 10 0 0 0 0 1 10 0 1 1 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 10 0 10 0 10 0 Who’s ranked where in the IP100 League Table 2019
M Squared at the cutting edge of scientific research
Metis Partners provides IP100 entrants with a new narrative to impress investors
Business Banking
Proud to back innovative businesses Our team of industry specialists focus on supporting high-growth businesses that have invested in their intellectual property and software assets. From debt origination to customer management, our UK-wide team has a broad and deep understanding of the financial challenges these companies face.
To find out more contact: David Hayers - Head of Growth Finance david.hayers@cybg.com 07483 354 835 Lending subject to status and eligibility, security may be required.
Clydesdale Bank PLC (which also trades as Yorkshire Bank and Virgin Money) registered in Scotland (No. SC001111). Registered office: 30 St. Vincent Place, Glasgow, G1 2HL.
WELCOME ‘IP100 – CHANGING THE NARRATIVE’ Now in its fifth year, Stephen Robertson reflects on how IP100 entrants are successfully utilising their IP assets to increase access to funding and support business expansion.
CONTENTS 06. State-side Success 08. Letting Business Grow 12. Pushing Boundaries 16. Innovate & Inspire 20. The Results 26. Market Leaders 30. Ensuring Secure Strategies 34. Ahead Of The Game 38. Energising Growth 42. Real Time Retail 46. Intellectual Property Should Be A Critical Element Of An SME’s Business Strategy 47. The future is bright 48. Innovate to Succeed 50. Summary
In association with
Since the IP100 launch in 2015, we have eagerly watched as many IP League Table entrants have learned about effective IP management from the IP100 process, improving their IP score each year and using it as a valuable and reliable IP benchmark. Entrants that have successfully developed the key IP assets in their business are armed with a new narrative to impress investors, lenders, partners and customers alike. Effectively building and managing a strong IP portfolio can complement business growth and provide a gateway for high-growth companies to enter new markets and build new business relationships. This year has seen many achievements by IP100 entrants and some notable examples include Smith & Sinclair which achieved a successful exit to Nasdaq listed Tilray Inc. Management acknowledged that the company’s IP strategy combined with their track record of innovation ultimately helped secure a successful M&A deal. Over the five years, we have been pleased to see that entrants are using the IP100 to demonstrate improvements in the management of their IP, measuring the outcomes and ROI of their IP investments. Edinburgh-based golf technology manufacturers Shot Scope Technologies was able to exploit its IP assets to fundraise, procuring more than £5m of private equity funding to support its venture into the U.S. market. Shot Scope climbed the IP League Table ranks, last year entering the top 20, and this year achieving a place in the top 10. M Squared received a £2.9m grant from Scottish Enterprise to help accelerate its worldleading research, and in the process supported the creation of circa 24 new jobs. This additional funding for M Squared builds on prior funding rounds during its time in the IP100 raising almost £5m in equity funding. Grant Fraser, CEO of Glasgow-based Digitonic, featured in the IP100 since 2016, said the IP100 helped them secure an 8-figure valuation; the company used the IP100 benchmark to help identify areas to improve IP management and ultimately increase its business valuation. Where a business focuses time and effort on promoting a strong IP culture it is clear that not only does its IP score increase, so too does its ability to fundraise. This was evident in the case of Cambridge-based biotech entrant Sphere Fluidics, who in 2019 secured another £1.5m of investment building on the £15m in equity funding it raised since joining the IP100 in 2015. This year, Sphere Fluidics has for the first time reached the top ten overall, having scored 25th in 2016, 21st in 2017 and 15th in 2018. Its implementation of a bespoke trade secrets policy resulted in achieving the second place in that category, and helped improve its overall ranking to 7th place. With its IP asset portfolio increasing and bolstered by opportunities afforded by membership of the IP100 Club, perhaps it is no coincidence that Sphere Fluidics has seen such huge success in its fundraising efforts. The IP100 continues to be a real and effective benchmark for companies seeking to boost their profile and increase their access to lucrative business opportunities. Over the coming year, we look forward to seeing these IP100 entrants and others gain the recognition they deserve for the investment they are making in their IP.
The IP100 is a collaborative partnership between Metis Partners and UMi. UMi help businesses go further by taking the hard work out of finding and using the best information, expertise and finance. To find out more about our business community, our current services and how we can help you visit our website at weareumi.co.uk All contents © 2019. All rights reserved. While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, however caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All content in this report should be regarded as advertorial. All information is correct at time of going to print, IP100 December 2019.
CREATED BY
IN PARTNERSHIP WITH
CAMPAIGN AND CONTENT PRODUCTION COMMERCIAL DIRECTOR Bryan Hoare bryan.hoare@weareumi.co.uk Claud Kelley
CHIEF COMMERCIAL OFFICER Suzanne McCreedy suzanne.mccreedy@weareumi.co.uk
Ashleigh Smith
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EDITOR Peter Jackson p.jackson77@btinternet.com
DESIGN REMEMBER MEDIA LTD David Stubbs, Creative Director dave@remembermedia.co.uk
PHOTOGRAPHY KG Photography info@kgphotography.co.uk
IP100 TEAM FOUNDER Stephen Robertson stephen@metispartners.com
HEAD OF MARKETING Hannah Roussel hannah@metispartners.com
JUNIOR ANALYST Fergus Horne fergus@metispartners.com
IP VALUATION ANALYST Miguel Benitez miguel@metispartners.com
JUNIOR ANALYST Ryan Diamond ryan.diamond@metispartners.com
+44 (0)141 353 3011 (GL ASGOW) WWW.IP100.CO. UK METISPARTNERS .COM
@THEIP100
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BAKER BOTTS Technology Lawyers “Combining significant corporate expertise in highly regulated sectors including energy, healthcare, life sciences and financial services with overarching IP prowess, Baker Botts (UK) LLP is well placed to provide ‘strong and knowledgeable advice’“ —Legal 500 UK, 2020 “The team’s ability to pivot between midmarket deals to very large deals is impressive. What is unique is the depth of corporate knowledge and their approach to partnering with clients almost as if they are an extension of the client’s own internal legal team.“ —Legal 500 UK, 2020
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STATE-SIDE
SUCCESS Metis Partners’ expansion to the West Coast, USA has confirmed to Metis Partners’ & IP100 founder, Stephen Robertson, that knowing your IP Score and the value of your IP will be central to future business transactions Metis Partners is the IP Valuation firm behind the IP100. Stephen Robertson is the man behind Metis Partners. As a chartered accountant with a background in corporate finance, Robertson understood the resources that a business relies on to generate revenue and profit, but it was his time with the London Stock Exchange which highlighted that there was an additional narrative being promoted by brokers and analysts. They were telling the market to buy the shares of their client companies because these businesses had great technology, a strong track record of innovation, awesome brands, a strong patent portfolio etc. These discussions were filling in the blanks left by the financial statements – the blanks were focused on the assets that were securing competitive advantage; underpinning the future cash flows that would influence investors; the IP. Stephen identified this as a gap in the advisory market. “In my mind IP wasn’t just a PLC phenomenon, it was an asset class for all growing businesses and more specifically, IP-rich businesses.” He set up Metis Partners in 2003 and grew it into a specialist IP valuation firm with a marketleading service in IP sale. Having been involved in more than 800 IP transactions, Robertson remains committed to creating transparency for dynamic IP-rich businesses. He has always believed that IP scoring, based on the Metis Partners’ proprietary methodology for identifying IP assets in a business, would enable IP-rich companies to track their
progress, both year-on-year and against their competitors and so he launched IP100. “The IP100 has given companies increased visibility in the marketplace and showcased the investment they have made in IP. It is only right that they be allowed to leverage the IP value they have created and have it recognised when raising finance, negotiating joint ventures and on exit”. When we spoke to Stephen in 2018, he was embarking on a whole new adventure – moving to California and expanding Metis Partners’ operations to the US. We caught up with him on his progress. “Firstly, from a personal perspective, it is awesome! My family has settled, and we have just been granted a 2-year visa. From a business perspective it has been a steep learning curve. The structure of the professional advisory market in the US is vastly different from that in the UK. Qualified accountants fulfil a role that is less ‘trusted business advisor’ and more ‘functional tax accountant’. Corporate lawyers are consulted at EVERY step of engagement and transaction. The market is so incredibly huge that it can sustain large numbers of ‘specialist advisors’ – like wealth managers, exit planners, trust & estate planners, and corporate exit coaches. In the UK many of these roles would be performed by accountants and financial advisors because there just isn’t the volume of transactions to justify a market for specialists. I am not sure it counts as CPD, but I have had to navigate the vast array of professional advisors and
build a new network of contacts.” “One of the things I am enjoying in the US is that there is a real appetite for IP. They get it here. They see the value in the investment and validity of the IP narrative in business transactions and negotiations. I read recently that one of the greatest business minds in the US, Warren Buffet, believes in the ‘economic moat’. He is big on investing in companies with strong economic moats, that is, strong barriers to entry and strong competitive advantages around them that can create this economic moat of protection. Of course, to me that’s the IP! We are essentially evangelising about the same thing – maybe one having slightly more success, thus far!” Robertson confirms that while the market is infinitely bigger state-side, the obstacles facing fast-growing IP-rich companies are the same; articulating the value of their IP: raising growth finance without a traditional asset base to offer as security; getting recognition for the value of their IP being reflected in the exit price/multiple. “Many of our initial engagements have been with exciting IP-rich businesses looking for growth finance. The sectors have varied from high-tech security software to renewable energy-led products; from neuroscience businesses to a craft wines and spirits brand. I would say the IP assets we have valued have been atypical, which has been challenging. However, based on feedback from our US clients, our IP Valuation team have performed to an exceptionally high level, providing in-depth IP analysis and market and sector context.” Robertson confirmed that companies and, in particular, lenders have been impressed with Metis Partners’ unique approach to valuation, which is IP-led rather than delivering a traditional financially-led IP valuation. “The Metis IP valuation report highlights a company’s critical IP assets and demonstrates
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how they map directly to the cash flows. A key differentiator is the additional analysis we provide on the IP and our opinion on how these IP assets are used to secure competitive advantage, which may include us looking at activities of key competitors or performing an analysis of price premiums that a company’s IP can generate.” “The feedback from our US clients has been fantastic – one of the bigger clients saying that our IP Valuation Report was of a standard that he would expect from a Big 4 Accountancy Firm, which in my book is a huge compliment.” Robertson has another exciting development in the pipeline. “I am in ongoing discussions with a couple of industry forums in the US. There are many, many industry organisations, forums and advisory groupings and a number of them provide great support for their member companies. The exit planners, for example, have an extensive network across the US and focus on companies looking for an effective exit strategy. They tell me that typically the exit price will take account of some level of general goodwill; however they believe that our Metisology approach to identifying individual critical IP assets, mapping these to products and services and demonstrating how the IP underpins both future cash flows and competitive advantage, could secure its members a higher multiple on exit.” “Although the market operates differently in the US, I would say there is a common goal among growing entities, which is to get increased transparency over their IP and be able to communicate its value to potential lenders and acquirers. It is therefore no surprise that I have received quite a bit of interest in IP100.” Robertson admits that he never leaves home without a copy of the IP100 magazine, taking it to every meeting. He believes that the visual impact of seeing company stories and the ranking tables within a boldly branded magazine is something that resonates well in the US. “They love a league table over here. They embrace all kinds of competition: sports, business and personal.” Robertson has pitched the idea of using an IP score as an initial screening tool for IP-rich businesses applying for funding. “One of my banking contacts said – ‘So it’s like a credit score, but for IP?’ I guess that’s a smart way to look at it. “I remember from my corporate banking days how many IP-rich businesses were often quickly overlooked if they had no strong
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“I remember from my corporate banking days how many IP-rich businesses were often quickly overlooked if they had no strong tangible assets to offer as security”
tangible assets to offer as security. This is still the case, but lenders are now acknowledging that investment in intangibles typically exceed that in tangibles. There is definitely a realisation from lenders that they need to develop a product that reflects and fits within the changing dynamic of business. Companies are now less brick and mortar and more people and processes. In addition, there is a surplus of cash here, cash that needs to be deployed, particularly by private equity firms, and there are very few companies that can offer traditional fixed assets as collateral. So the time is right for us in the IP community to demonstrate that IP is a significant business asset: it is moveable, transferable, underpins competitive advantage, secures price premiums, provides access to additional revenue streams, can be easily committed to joint ventures, don’t get me started. You know how passionate I am about IP!” Robertson believes that providing companies with an IP score could provide lenders and investors with initial comfort around the IP assets that a company is offering as security, demonstrating that they are well-protected and well-managed. This initial IP score would
also avoid growing companies paying for the cost of a full IP valuation when their IP is not yet “#IP100ready”. An IP score would highlight areas that could be improved or strengthened prior to it being independently valued within the context of a transaction. Once enough companies have IP scores, Robertson admits that the obvious next step would be to launch the IP100 platform in the US. “It would be exciting to launch IP100 San Diego or IP100 California or IP100 USA! I do see opportunities to build the IP100 network through partnerships, perhaps with one or more of the industry organisations that exist here. We have developed a strong and independent brand for IP100, one which is separate from Metis Partners, and this strategy will enable us to partner with other organisations to launch IP100 in the USA. The important thing for me is that I have my critical IP well-protected and so can expand internationally, with confidence.” n
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LETTING BUSINESS
GROW
Clydesdale and Yorkshire Bank continues to grow its business lending as the rebranding to Virgin Money gets underway Economic headwinds and uncertainty may be denting confidence in some areas of UK business, but David Hayers, head of growth finance at Clydesdale and Yorkshire Bank, isn’t seeing it. He and his team have lent a record amount to their customers for the fourth year in a row, taking the total number of companies to which the team has lent to more than 60. “We have just completed a fourth record year of lending and we are still seeing very strong demand for the non-dilutive growth debt that we offer. We’re not seeing people holding back in terms of investment. “While Brexit has dominated the headlines, management teams that we work with are focused on implementing their growth plans. The markets in which these companies operate are global and so companies need to continue to invest and expand or they run the risk of losing out to competition from overseas. “A core driver of the growth debt and venture debt markets is investment by venture capitalists, and they continue to raise large sums of money which needs to be invested into companies. Specialist debt providers such as ourselves can then augment a company’s equity raise by providing tailored debt packages to help extend the cash runway of the business.’’ Particularly active sectors for the bank’s
growth finance team continue to be software and advanced manufacturing. In the former, software as a service, SaaS, is of major interest. “Software as a service is becoming more important and the majority of the software businesses we lend to will operate a SaaSbased business model with high recurring revenue, often underpinned by multi-year contracts with their customers. These types of companies are strong candidates for growth debt due to the visibility over future revenues,’’ says Hayers. More unusually, businesses underpinned by strong intellectual property in the form of patents are also a key target market for the team. Oxford-based IP100 entrant P2i is one such customer. The company, which was spun out from the MoD, makes liquid repellent coatings for smartphone components and its technology operates at the nanometre scale. It holds more than 160 patents and patents pending and its technology has been used to protect hundreds of millions of electronic devices, especially mobile phones.
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In addition to mobile devices, P2i’s technology has a broad range of other applications. The company has a dominant market share in the hearing aid industry as well as being prevalent on a number of headphones in the market. With its Barrier technology, it is targeting the drone sector, using the thinness and the lightness of the coating so it doesn’t affect the sensors within the drone. The automotive sector is also a target market because, as cars become more intelligent with an ever-increasing array of embedded electronics, so the impact which liquid damage can cause increases, and P2i’s ability to protect objects from liquid damage becomes ever more critical. Gaming consoles represent another target market for the company, particularly as people are increasingly interacting with the handheld element of such devices outdoors and therefore opening them up to rain, water, and environmental pollutants. P2i leveraged its intellectual property to secure a significant increase in its borrowing
“While Brexit has dominated the headlines, management teams that we work with are focused on implementing their growth plans”
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from Clydesdale and Yorkshire Bank, taking its total debt facilities to £10m, having previously raised much more than this in equity funding from various partners. Two more success stories for the bank have been Aircraft Medical and Touch Bionics. Aircraft Medical, an Edinburgh-based healthcare device maker, was founded in 2001 by chief executive Matt McGrath, to produce video laryngoscopes, devices fitted with cameras that help medics to put breathing tubes down patients’ throats. The company secured a multi-national distribution agreement in 2011 with Ireland’s Covidien which took Aircraft Medical’s proprietary video laryngoscope into the US, Japan, Latin America, Australia and New Zealand. Covidien was subsequently taken over by Medtronic, paving the way for the subsequent acquisition of Aircraft Medical in November 2015 for £72m. The company, which has its manufacturing site in Dalgety Bay, north of Edinburgh, was financed by private investors, the Princes Trust, the Wellcome Trust and Scottish Enterprise alongside Clydesdale and Yorkshire Bank. Touch Bionics, based in Livingston, which was spun out of the NHS in Scotland when it was founded in 2003, developed artificial hands and is underpinned by 11 patent families. It is thought to be the first company to develop an electrically-powered prosthetic hand with five independently-powered fingers. Touch Bionics secured a loan from Clydesdale and Yorkshire Bank which helped it expand overseas, growing its number of staff to more than 120 across Scotland, Germany and the US. It was sold to Icelandic business Ossur in April 2016 in a deal worth £27.5m. Clydesdale and Yorkshire Bank’s growth finance team, which has bases in London, Glasgow and Newcastle, funds businesses around the UK. “We operate right across the UK and have lent to IP rich businesses from Aberdeen to Southampton,” says Hayers. “Particular areas of focus currently include the South West around Bristol, the Thames Valley which has always had a strong high-tech focus, Manchester and the wider North West region and the central belt of Scotland. It is encouraging to see these regions diversify their economies and supplement the
internationally renowned golden triangle of London, Oxford and Cambridge.’’ The bank’s offer of non-dilutive debt financing resonates with entrepreneurs who are reluctant to yield any more control of their businesses by selling more equity. Hayers explains: “For the companies that we fund, their alternative is to raise equity which inevitably means that the existing shareholders either have to invest further money to maintain their current shareholding or experience dilution and, in many instances, neither of these is an attractive proposition. This is where venture debt can add real value to shareholders. “It is not appropriate for all businesses, particularly those at the very early stages of product commercialisation. However, where it is prudent, venture debt can help existing shareholders maintain their current ownership levels whilst providing cash to help the company invest in its further growth, often by creating jobs and enabling investment in product enhancements or new product development.’’ Intellectual property in the form of patents or proprietary software is at the heart of the deal assessment process for the growth finance team. “The majority of lenders in the UK will only consider a company’s tangible assets or sustainable profitability as collateral for any loan,” says Hayers. “However, the growth finance team focuses on the nature and depth of the intellectual property in a business and, by doing so, we are able to lend to companies at an earlier stage in their lifecycle than other institutions and thereby support the growth ambitions of our customers when it matters most.” The bank has sharpened its focus on supporting entrepreneurial businesses since it demerged from its parent National Australia Bank in February 2016 and subsequently listed on the London Stock Exchange as CYBG plc, the holding company which owned Clydesdale Bank, Yorkshire Bank and the digital bank B. In June 2018, CYBG announced it had agreed to buy Virgin Money in an all-share takeover for £1.7bn. In October this year, following the completion of the regulatory process which brought all customers across both businesses together under a single banking licence, the
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“The Bank’s offer of non-dilutive debt financing resonates with entrepreneurs who are reluctant to yield any more control of their businesses by selling more equity”
group was renamed Virgin Money UK PLC, replacing its former title. The group’s shares now trade under this new name on the London Stock Exchange. All brands operating within the group will be rebranded as Virgin Money by the end of 2021, with Yorkshire Bank beginning rebranding in late 2019 and Clydesdale Bank in the second half of 2020. A brand-new business bank will be established under the Virgin Money brand in the same year. The rebrand of B to Virgin Money and the launch of the first Virgin Money personal current account will take place later this year. The combined group has approximately six million customers and it is now the sixth largest bank in the UK, with some
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£70bn in total lending. Hayers sees the acquisition of Virgin Money and the subsequent rebranding as important statements of intent in the UK banking sector. He says: “From a corporate perspective, the rebrand to Virgin Money is very significant. The Virgin brand is synonymous with an entrepreneurial spirit and, as UK SMEs are our core target market in business banking, it will reinforce our message that we can empathise with and react more quickly to SMEs in the UK than the big five, whilst being large enough to provide a complete range of banking services.’’ Another change which the bank is facing is the challenge of Open Banking. From January 2018, the UK’s nine largest banks have had to share their data with licensed
start-ups, subject to the approval of account holders. This followed new EU legislation on payment services – PSD2, introduced in the UK in the form of the Payment Services Regulations, which govern the provision of payment services and are designed to increase competition. Now, banks and building societies will have to make certain information accessible in a standardised, straightforward and secure way to other approved companies, which wish to create new products and services offering customers faster payment methods and innovative new banking products. Virgin Money UK PLC has embraced Open Banking’s challenge and is using computer technology to give its customers access to
all its benefits, launching its Aggregation service in April 2018 which allows B customers to access all their bank accounts in one mobile banking app. This is just one more example of how the bank is embracing the changing banking landscape. n
David Hayers david.hayers@cybg.com 07483 354 835
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PUSHING
BOUNDARIES M Squared is operating at the cutting edge of scientific research and is turning the results of its work into commercial success M Squared is a photonics and quantum technology company, whose laser systems are pushing the boundaries of quantum science, to improve healthcare and the scientific understanding to halt climate change. The Glasgow company has been recognised by the Deloitte Technology Fast 50 and Sunday Times Fast Track 100 and Export Track 100 and been awarded the Queen’s Award for Enterprise in Innovation and International Trade. In its new quantum centre in Glasgow, the company is building quantum sensors, clocks and computers. It was set up in 2006 by Dr Graeme Malcolm and fellow physicist Dr Gareth Maker, the name referring to the pair’s surnames as well as a formula linked to the propagation of a laser beam. The pair had previously founded Microlase Optical Systems, a Strathclyde spin-
out, in 1992, which was later bought by its 25% shareholder California-based Coherent, a world leader in the laser industry. The acquisition resulted in the creation of Coherent Scotland, led by Dr Malcolm until 2005. Now, M Squared employs around 120 people – almost half of them PhD level scientists and has offices throughout the UK, Europe and the US. It has an annual turnover of more than £20m, 90% of which comes from exports around the world and the company has been doubling in size every two to three years. The company has worked closely with some of the world’s leading research institutes, including Massachusetts Institute of Technology. It has also been part of the London Stock Exchange Elite programme and earlier this year was named as the only nonEnglish addition to the Tech Nation Future Fifty, which aims to support the fastest growing tech firms in the UK. In collaboration with Imperial College London, M Squared last year unveiled a tool hailed as the quantum breakthrough of 2018: a transportable, standalone quantum accelerometer, designed to aid navigation without reliance on satellites. It has the potential to entirely replace GPS. To support
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its £7m project to accelerate this kind of research and create dozens of jobs, the business received a £2.9m grant from Scottish Enterprise in July. The company is at the cutting edge of developments in quantum technology, and it’s now looking at potential applications for its quantum gravimeter and accelerometer technology. Measuring gravity provides the ability to understand geology, volcanology and earthquakes and reveal locations of interest from space. Dr Malcolm says: “The whole area of quantum technology is where we start to get quantum mechanical effects that we get in the likes of atoms and ions to make machines. Up until now, mankind has made machines using atoms as building blocks. These machines use quantum mechanical effects inside atoms as part of the making of the machines which typically means that you can create technology, whether that’s for timekeeping, sensing or computing, it is much more capable than the current state-of-the-art. In fact, often the first thing you do in quantum, is the best thing that has ever been done. It’s almost like the move from analogue to digital. “The theory has been known for about 85 to 100 years. You can go back to Einstein and Heisenberg when it was described as the quantum leap when people were looking at it. But turning that into practice has been a lot more difficult. In some ways you can say that semiconductors and lasers are quantum
devices with quantum effects going on but it’s not really the kind of pure quantum that sits inside of atoms.’’ Clearly, at this level, R&D is of crucial importance and M Squared ploughs about 20% of its revenues back into R&D every year. This autumn it unveiled the launch of a dedicated quantum research centre in Glasgow City Innovation District. The new facility, in the University of Strathclyde’s Inovo building, will focus on commercialising technologies including quantum sensors for measuring gravity and acceleration; quantum clocks, the most accurate timekeepers known to man and quantum computers. “We have chosen to situate alongside the University of Strathclyde because it’s historically been a pioneer in this area,’’ says Malcom. “But also, from a company perspective, we’ve become a pioneer and we’re recognised as one of the first companies globally to pull this technology through to market. But you need this interplay with almost like an entire university research base - to access different problems. “We have got to bring new technology like this on. It’s almost like having a university inside our company and the university probably thinks of us like having a company inside the university. The purpose is to get this out into the world. We are looking at the commercial front end of that and the university is really a great partner to take everything from fundamental maths and quantum physics,
through to computer science, through to sensing technologies. Strathclyde has been a real thought leader in this whole area and they have created this Glasgow innovation district.’’ R&D creates the IP, which gives the business its strength and value and Dr Malcolm and Maker learned the value of IP when they sold their previous business to a Silicon Valley company. Dr Malcolm explains: “We saw that one of the best things that a tech company can do in terms of technology development and market access involves IP. One of the things that fascinated me was the way that some of the biggest semiconductor guys approached IP. If you can get a couple of points of IP, maybe one at a device level and one in the application area, that’s where you see some of the best companies in the world, such as Intel and their supply chain and like Apple and their supply chain. That’s where those guys are really good at building the barriers to entry for others. But IP is a very multi-dimensional thing, it goes way beyond patents. “When we set up M Squared we wanted to take that learning of how powerful IP can be but also look at open innovation, because a lot of people were talking about it. There is this slight schizophrenia, or two sides to the coin
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on IP. But, you can come up with partners, if you’re careful about IP, and what we have been trying to do is build up a strong and valuable portfolio of formal IP and also the informal stuff, the capacity, the capability, the knowhow, the stuff that just makes you different from the rest and is a big part of our company.’’ M Squared is fast approaching 450 patents, many of which come from both inside the company and others which are as a result of its collaborations. “As a medium-sized company, if we can access IP that is generated by governments or blue-chip companies or universities, that’s really powerful for us,’’ says Dr Malcolm. He adds: “Our balance is that about 80% of what we do is product and product growth and IP around that, but 20% of it is innovation and running programs that are about where the technology might go in the future and also establishing substantially valuable IP further down the track. The innovation bit is looking five or even 10 years ahead.’’ As a business that takes IP seriously, M Squared gives its wholehearted support to IP100. Dr Malcolm says: “I think the IP100 is great. It gets right to the point, which is, that for tech companies, IP is at the centre of what they do, and IP100 has been the first IP centric thinking that the UK has looked at. To me IP is beginning with an end in mind and thinking about where things are going and, for the UK to have a community approach is fantastic. It’s always nice to be in good company and when you see the different companies that go and try to enter the IP 100 and you also see how it’s been turned into a kind of ecosystem with lots of events and talks and sharing, it’s a wonderful kind of balance.’’ n
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“The theory has been known for about 85 to 100 years. You can go back to Einstein and Heisenberg when it was described as the quantum leap when people were looking at it.”
M Squared and healthcare Accurately imaging large biological structures is fundamental to understanding disease and advancing care. M Squared’s Aurora Airy Light beam light sheet microscope has produced 3D images fine enough to capture neural connections. It is enabling discoveries in neuroscience research and helping to shed new light on neurodevelopmental and neuropsychiatric disorders such as autism spectrum disorders, schizophrenia and intellectual disability. M Squared’s approach utilises an Airy beam for light sheet illumination, enabling deeper penetration with a lower photon dose for longer imaging times. It also allows a wider field of view to allow more of the specimen to be imaged but maintains a high threedimensional resolution.
M Squared and space M Squared’s precision light plays an important role in tackling the challenge of climate change. It’s supporting past, present and future space missions to map pollutants from space. It supplied the only laser capable of calibrating Tropomi, the spectrometer onboard the Sentinel 5P satellite. Tropomi is now observing and mapping a range of critical atmospheric pollutants that impact on health and affect climate. Sentinel 5P is providing critical data on specific chemicals that are created by individual geographic areas and the implications these chemicals have in the atmosphere - something unachievable before this mission. It reveals the impact on the world from global warming, deforestation, animal husbandry, agriculture, forest fires, melting ice caps, and transportation. It enables the pinpointing of Europe’s industrial belt by observing concentrations of pollutants, and it can even see the impact of California’s recent forest fires. M Squared is involved in several planned missions to assess the impact society is having on health and the environment. For example, Sentinel 4 is to focus on monitoring trace gas concentrations and aerosols in the atmosphere as well as Microcarb to map sources and sinks of carbon dioxide.
M Squared and scientific lasers M Squared’s quantum accelerometer suspends and releases atom clouds using SolsTiS. SolsTiS is exported all around the world and is used by experimental physicists and industry alike. M Squared was a finalist in this year’s Royal Academy of Engineering’s MacRobert Award for its work on SolsTiS.
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INNOVATE & INSPIRE Innovation is fuelling huge growth for Digitonic, as we report
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Digitonic is a young company, only founded in 2011, but already it calculates that it has powered more than a billion interactions between brands and consumers across six continents. The company has grown to a value of £10m, a figure that has doubled since 2018, and reported 44% growth in the financial year ending 31 October 2018. It is also about to announce figures that show an even larger percentage increase in its latest financial year. The Glasgow-based business has pioneered and defined smart mobile marketing – a term it has trademarked – to target huge audiences. The business uses its suite of proprietary technology to deliver marketing services such as conversational, “email-quality” image and video content directly to a consumer’s SMS inbox. It says that this has significantly improved marketing campaign conversion levels at a range of global organisations such as Audi, KFC and OilPrice.com. Recently, Digitonic created an ad network in India on the back of building a popular cricket news site, called cricketnews.com. The website is integrated with Digitonic’s other technologies which have built up a new opt-in base of just under 2.7million people. This is a community of male Indian cricket fans aged 18-44 that live in major Indian cities, a growing audience for brands looking to tap into this emerging market. “I can press a button and send a short TV commercial, a video or a link to a news article to all 2.7million people,’’ says co-founder and chief executive Grant Fraser. “We’re different from the norm because a lot of technology companies build tech for other people and organisations. What we do is build great tech for ourselves. We monetise and commercialise our own platforms first before we allow other people to tap into them.’’ It has been a winning formula. Digitonic was set up by Fraser and Iain Wilcox, who each invested £2,000 to buy two laptops, two mobile phones and settle the first payment for a small office in Glasgow. Since then, the company has had three successful rounds of investment. The first was in 2014 when four investment angels valued the company at £2.25m.
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“We’ve never had an overdraft,’’ says Fraser. “We’ve also never needed to use those initial investor funds at all and I’m most proud of that. People might say that we didn’t need it but, by having the funding there, we were in a position to make correct decisions and pick and choose campaigns and activities that we felt were right for the growth of the company. The funding lent me the peace of mind and freedom to do that.’’ Then, in April 2018, the business sold a 2% equity to an experienced Edinburgh-based investor, who now sits on the advisory board, valuing the company at £5m. A few months later, it sold 10% for a valuation of £10m, after successfully demonstrating to the buyer how powerfully the technology was working in the US and Canada. Digitonic’s target for 2020 is to almost double turnover again. Growth will be fuelled by further international expansion, joint ventures with strong players in the organisation’s key target sectors and a potential company acquisition. Apart from its success in the IP100 table, Digitonic has been shortlisted for several industry awards, including the Drum Awards for the Digital Industries and the Digital Marketing Association Awards. Digitonic believes its strengths lie in critical databases. However, the introduction of GDPR and the imminent introduction of ePrivacy regulation could have been a huge challenge for a mobile marketing company. Nevertheless, Digitonic turned this potential threat into an opportunity. Fraser explains: “We were pretty forwardthinking with regards to how could we pivot and continue to operate in a fully compliant and lawful manner, even when GDPR and ePrivacy came in. That’s why we started to focus on new messaging platforms like Facebook Messenger and Telegram, because it’s technically impossible to send a message to somebody through those channels without their consent and their opt-in. That is one of the reasons why we love that new form of messaging. We have focused on building up as big an opt-in base as possible across all those new channels.
“If GDPR had not been introduced, we may have continued to only run profitable SMS campaigns, but we were forced to innovate our way out of what could have been a difficult situation and that motivated us.’’ Digitonic’s platforms and technology have been the result of its stress on R&D. “We put a massive amount of emphasis on R&D and we work closely with our accountancy firm in order to quantify our R&D and take advantage of the tax credits and grants that are available there,’’ says Fraser. “We have our own in-house tech team of ten people and almost every product that we utilise has been built in-house.’’ Clearly, the fruits of the R&D only remain valuable if they are protected and the company also places great emphasis on looking after its IP. “Our eyes have been opened to what IP we actually had and what we are building. As a business, we have a wiki - a secure online content base - on which our 26 team members document, and continually update, every aspect of their job function. “Within Digitonic, we have large IT, marketing and design teams and getting a successful project out of the door involves working across all of those divisions. Our wiki means that – as
“We have our own in-house tech team of ten people and almost every product that we utilise has been built in-house.”
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we grow and increase headcount at scale – we are able to onboard staff as efficiently and thoroughly as possible. The tools they need to do their role are detailed for them in writing, so they can pick them up extremely quickly.” The work undertaken on safeguarding Digitonic’s IP and in performing an IP audit proved particularly valuable when it came to the last round of fundraising. “Because of the work that we had done on our IP, we were able to quantify and qualify what that investor was getting. I have heard from friends who have sold businesses in the past that buyers took a look under the bonnet and then revised the price downwards because they weren’t getting exactly what they thought. However, our IP audit gave investors complete reassurance and confidence that they were making a good call.” The business has also trademarked the phrase ‘smart mobile marketing’. “That came from the work we’ve done on our IP – such as looking at our patents –
and we were able to thoroughly back up our smart mobile marketing credentials,’’ says Fraser. “For the first seven years after the business was set up, we solely offered mobile marketing. This might sound a bit alien to most marketers because, typically, businesses are happy to take money from almost any type of marketing activity, whereas we wanted to be the go-to people for mobile marketing. But, within our own IP we were able to create the fundamentals of what makes up a successful campaign. A campaign that can be deemed a smart mobile marketing project. It’s about compliance, it’s about the correct opt-ins, it’s about the correct structure and it’s fundamentally about delivering ROI’s for a client”. Having successfully raised funds, developed its technology and platforms and put in place the appropriate protections, Digitonic is now poised for further growth. It has invested ‘a six-figure sum’ to convert previously disused office space opposite Glasgow’s Central
Station. It’s three times bigger than its previous office and will serve as the company’s HQ as it continues to expand across global markets. “We wanted to remain based in central Glasgow, while a lot of businesses are going to the outskirts to save money,’’ says Fraser. “The office is treble the size of the last one but we’re already wondering whether it’s big enough. The choice of office came about from asking the staff what they wanted. A lot of them travel long distances to get here, so it was a unanimous decision to remain within the city centre and avoid further travel to the outskirts. Our head office will always be Glasgow.’’ Now the company will focus on emerging markets such as India, where it has enjoyed such success with cricketnews.com. It also sees huge potential in North America in the financial and investment sector where its technology has been particularly well received. Fraser says: “We’re trying to revolutionise what marketers have been doing in that sector for years, which is relying on email
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for communication. That’s a huge growth area for us.’’ As well as having an office in London’s Aldgate, Digitonic has a base in Lucknow, India, and is opening an office in New York later this year. So, while Digitonic is firmly rooted in its native Glasgow, it’s very much international in its outlook. Fraser says: “We were born global. From day one, our clients have been international and, although our roots are in the UK, we see huge opportunity by internationalising. Technology does not have boundaries and we are definitely seeing that. Where we are getting the growth from is by taking what we have done in the UK and then adapting it to work as well in other parts of the world.’’ n
Digitonic has a number of platforms to support its smart mobile marketing mDoc is Digitonic’s proprietary mobile messaging format, designed to outperform traditional bulk SMS communication methods, providing email quality content for the SMS inbox of any internet enabled mobile device. It allows the sending of Jpegs, Gifs, MP4s and PDF documents, all optimised for the end users’ device. Yapper is a conversational marketing platform. Such platforms offer marketers the ability to listen, build trust and establish rapport with their audiences. They ask specific or open-ended questions and adopt paraphrasing to show genuine interest and understanding. Technology such as Yapper enables marketers to respond appropriately within each conversation. Yapper can leverage scalable inbound and outbound Facebook Messenger automation to capture, qualify and connect across social channels and can deliver targeted new users into a bespoke Messenger flow, using automated conversational marketing chatbots. Digitonic can add plugins to a customer’s website or marketing communications
Digitonic in business to let users know they can contact the customer via Messenger directly. Every user must opt-in to the chatbot marketing communications and can unsubscribe at any time. Entr is Digitonic’s WiFi analytics platform, which delivers real-time in-venue personalisation via triggered marketing and webhooks, all derived from device connectivity events. Powered by a customers’ existing WiFi connectivity, Entr also provides data insights by helping venue owners to understand unique customer visit frequencies and durations, enabling venue owners and operators to understand who their customers are, how often they visit and how long they stay. Entr measures responses from campaigns by logging customers when they re-enter target venues and marketers can measure their associated ROI via a single dashboard. Finally, Digitonic’s AdNews provides a scalable prospecting technique by leveraging newsworthy content to achieve targeted brand exposure. The AdNews process creates a conversion funnel by creating impressions to encourage action. Breaking news stories provide the medium for delivering ads, creating an opportunity to promote a brand to millions of profiled views. To achieve this, Digitonic builds social communities to promote content directly to customers using focussed targeting tools.
In December 2018, KFC South Africa launched its campaign to “Turn Tuesday into the Best Day of the Week”, offering a 12-piece bucket for R99.90. Digitonic, which had previously delivered successful campaigns for several well-known brands in South Africa, worked with KFC to implement an mDoc marketing campaign to entice customers into their nearest KFC restaurant. KFC sought an innovative way to boost awareness of its national “Chicken Tuesday” campaign across South Africa. The goals were to raise awareness of the “Chicken Tuesday” campaign and highlight KFC locations nearby to each customer. The goals were also to increase midweek footfall within KFC restaurants throughout South Africa and to encourage repeat, and more frequent, custom with a “Tuesday only” offer. Digitonic developed a personalised mDoc campaign with a fun and entertaining short video outlining the offer. The message was delivered directly into the SMS inbox of potential customers, and also included copy about the offer and a short link to the website to find the recipient’s closest KFC restaurant. The mDoc platform ensured that each customer received optimised content for their device. The campaign, which was fully-tracked to measure effectiveness and ROI, achieved a CTR (click through rate) of 4.56% and, at the end of the trading day, not only was the advertised deal a success, but several KFC lines had sold out after the campaign had been sent. The mDoc campaign significantly outperformed traditional marketing activity for the same offer.
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THERESULTS
Stephen Robertson, Ryan Diamond and Fergus Horne reveal the final scoreboard for 2019
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e are thrilled to announce the 2019 results for the fifth annual IP League Table. Firstly, welcome to the many new entrants to the IP100, several of whom have entered both the top twenty overall and secured top places in individual IP asset categories. We have been impressed with the high standard of IP management shown by entrants this year, and in particular with businesses that have taken innovative steps to safeguard their IP. Congratulations go once again to M Squared, a photonics technology company, which has retained its spot at the top of the IP100 League Table for the third consecutive year. P2i, a company specialising in developing and manufacturing liquid repellent nanocoatings, achieved the runners’ up spot for the second time, despite improving on its 2018 score. Jumping six places into third was Canon Medical Research Europe, the medical software research and development centre based in Edinburgh. We believe that a robust IP strategy is key to the growth of any business and plays a pivotal role in mitigating the risks associated with growing any business in the modern economy. We were therefore excited to score several new entrants to the IP100: high-scorers Mallzee, the personal shopping app developers; renewables innovators, Recycling Technologies; content management solutions providers, Tempus IME; and retailer insights specialists, Personify XP. We congratulate all our new IP100 entrants for taking an active role in putting their IP assets and IP strategy “under the spotlight”. We are delighted to welcome them into the IP100 community and hope they will join us at upcoming IP100 Club events to hear first-hand from other IP-rich fast-growing entrants how they can best protect and leverage their IP to support business expansion. They now have their initial IP scores which can be used as a benchmark and valuable baseline from which to review their IP strategies. We look forward
to seeing their IP and IP scores improve over the next year. IP100 Sponsors, Champions and IP100 Club Once again, our partners and sponsors have greatly contributed to our IP100 network and events programme. This year we welcome two new sponsors to the IP100: Baker Botts, a leading global law firm with a proud history of more than 150 years, plus over 200 lawyers dedicated to IP. They have been terrific hosts of IP100 Club events over the last twelve months offering practical insights into good IP strategy and IP management. Catax are experts in specialist areas of tax relief such as capital allowances and R&D tax credits, which has saved their clients more than £242m to date. Clydesdale & Yorkshire Bank have once again provided much appreciated support and sponsorship to the IP100. Clydesdale & Yorkshire Bank’s growth finance team assists a wide variety of businesses to fundraise based on the strength and integrity of their IP, and in recent years has provided more than £130m of lending to IP-rich companies. We are also pleased to report that London Stock Exchange ELITE and the UKIPO continue to provide their invaluable support. We have hosted numerous IP100 Club events throughout the year with the help of our sponsors and IP100 Champions. We kicked off the start of the year with the support of two new Champions, start-up growth provider Momentum London and Smith & Williamson, advisors to entrepreneurial businesses. These events are held across the U.K. and provide a unique forum for entrants in the IP100 League Table, sponsors and investors to come together and share vital information on how best to manage and exploit IP assets. The IP100 Club events also give these parties the unique opportunity to network and learn from each other’s experiences of growth and expansion, enabling each to grow closer connections together at the same time expanding their
knowledge of the potentials and perils of IP exploitation. We have continued our smaller IP100 roundtable events, available exclusively to entrants and sponsors, which give attendees invaluable insights into IP valuation, IP strategy and using IP in innovative fundraising structures. The IP100 and IP League Table is the one of the U.K.’s most dynamic and fastest-growing platforms for scalable IP-rich companies seeking investment and continues to raise awareness nationwide about the vital importance of IP in contributing to the growth economy and any business enterprise. Trends The dust has now largely settled since the 2018 rolling out of the monumental General Data Protection Regulations (“GDPR”). Last year, we saw a significant increase in the average score in the Critical Databases Asset Category, as companies sought to boost the robustness of their internal data-management systems in order to maintain compliance. This year saw a further, albeit more gradual, increase in the average score for IP league table entrants. The EU Trade Secrets Directive, which sought to standardise national laws in EU countries against the unlawful acquisition, disclosure and use of trade secrets, came into effect in May 2018 and prompted companies creating IP not just to implement trade secret protection in itself, but also to increase the robustness of these protocols. This new regulation was clearly on the minds of entrants during scoring calls, with some explicitly mentioning the importance of remaining compliant with the new regulation when discussing protections surrounding their trade secrets. Since 2017 we have seen a yearon-year increase of almost 50% in entrants establishing specific trade secrets policies to protect their trade secrets: this year 38% of all entrants scoring in the trade Secrets Asset Category have such a policy in place, compared to 26% in 2018, and 18% in 2017.
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We were impressed at the number of companies that scored highly in the Software Asset Category. It has become increasingly common for entrants both to utilise industryleading software development techniques, including protecting their software using a combination of different approaches including encryption and dummy coding, and to develop and implement proprietary software to conduct automated beta-testing and scalability testing. With so many entrants scoring well, it was a challenge to separate the winners in this year’s round of scoring. Methodology The IP League Table ranking process is based upon the assessment of five key IP asset classes: (1) Brand & Reputation, (2) Patents, (3) Critical Databases, (4) Software and (5) Trade Secrets. These IP asset categories are consistently recognised as being some of the key IP assets owned or relied on by highly successful companies. They are used to create effective and robust barriers to entry, and typically underpin the competitive advantages needed for rapid growth and international expansion. An effective IP strategy focused on building such competitive advantages enables such companies to scale up more quickly. With fresh blood in the IP100 team this year, Hannah Roussel has stepped into the marketing role and has been driving the creation and development of the IP100 club events and engagement with entrants and sponsors. Behind the scenes, Ryan Diamond and Fergus Horne have been focused on scoring entrants over the last three months. Having been through Metis Partners’ intensive IP training, and learnt all there is to know about our Metisology, it wasn’t difficult for them to quickly get to grips with the IP League Table, the substantial history and track record of previous entrants, and our aims and objectives for the IP100. The new team has brought a fresh set of eyes to the IP League Table, as well as a renewed enthusiasm to engage with new and existing entrants. By speaking with entrants about the progress in their business since last year’s IP League Table, they have been given a unique insight into changes in entrants’ attitudes to IP protection, and IP’s significance in relation to fundraising valuations and exit valuations. Naturally, they also get to hear some great stories and insights about IP protection from entrants large and small. n
‘Meet the IP100 team’ Every year, Metis Partners dedicates hundreds of hours to ensure that the full IP100 experience is a rewarding and valuable process for all our entrants. From hosting events for the IP100 Club, helping sponsors build closer relationships with entrants and getting the most from their sponsorship, to ensuring the best content for entrants during those IP100 Club events. Right through to conducting the all-important scoring calls with entrants, without whom there would be no IP100, it’s a huge project every year and so requires a real team effort from Metis Partners.
Hannah Roussel Hannah is the Marketing Manager at Metis Partners and has taken the responsibility for organising everything marketing-related for the IP100. She joined the Metis Partners team in 2019 and had an immediate impact bringing her passion for events to the IP100 platform. She will be well-known to attendees of IP100 Club events, and is often found buzzing around IP100 Club events with a camera in one hand and IP100 brochures in the other. Hannah has worked hard to strengthen relationships with existing entrants, attract new entrants, and ensure that sponsors receive maximum returns for their support of the IP100. The success of the IP100 hinges on her creativity and diligence, and it would not be the same without her.
Ryan Diamond As a Junior Analyst at Metis Partners, Ryan has for the past two years been on the periphery of the IP100 team, contributing to the writing of the annual publication and scoring the occasional entrant. This year, together with Fergus Horne, Ryan has taken joint responsibility for scoring all IP100 entrants. A future lawyer, Ryan looks forward to putting the experience he has gained in the IP100 to good use in his future legal career.
Fergus Horne Fergus is a Junior Analyst at Metis Partners, joining the team in 2018. He is a stalwart of the Metis Partners IP100 team, and together with Diamond has scored the full corpus of IP100 entrants. An accountant-in-training, Fergus’s forensic eye for detail and ease in working with such a large and complex data set as the IP100 has been invaluable in compiling this year’s scores.
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IP
TOP 20 ENTRANTS
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
M Squared P2i Canon Medical Research Europe Premier COREX (UK) Kromek Heald Sphere Fluidics Adrok Shot Scope Technologies Grid Smarter Cities Syrinix Digitonic Wearable Technologies Polarisoft Mallzee DP Governance Good Loop Data Conversion Systems Candidate ID Lifescaped
KEY (Industry %) Business Services
8%
ICT & Software
32%
Material Science & Engineering 8%
Healthcare & Med-Tech
3%
Pharma & Life Sciences
5%
Oil, Gas & Renewables
Retail
26%
Manufacturing & Construction 8%
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“Congratulations go once again to M Squared, a photonics technology company which has retained its spot at the top of the IP100 League Table for the second consecutive year”
10%
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The following tables highlight the results obtained from the scoring of entrants. As noted above, the process involves an assessment of IP-specific data linked to the following five IP asset categories: Brand & Reputation, Patents, Critical Databases, Software and Trade Secrets. The IP100 research team uses its proprietary process to calculate an IP100 score and subsequent ranking for each company. We are pleased to announce the leader boards:
IP
BRAND & REPUTATION
Once again, Brand & Reputation is the asset category with the highest average score in the IP League Table: this is perhaps no surprise given that brands are usually the first and most distinctive IP asset type recognised by a business or consumer. This year, Digitonic comes out on top after last year taking second place. Digitonic is a technology-driven mobile marketing company that has continued to develop the sophistication of its brand portfolio, expanding its international footprint and continuing to win coveted industry awards. Table-topping M Squared, is this year’s runner-up in the Brand category and third place goes to COREX, an international provider of analytical services for the oil and gas sector, who are once again placing highly in the IP League Table. Entrants clearly recognise the importance of formally protecting their brands, with 80% opting to register either their corporate or product brands as trade marks, and 55% opting to register both. Moreover, social media presence is now nearly universal among IP100 entrants, with almost 100% of entrants utilising social media to support their brand(s), and more than 80% following specific strategies when updating their social media profiles.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Digitonic M Squared Premier COREX (UK) Heald Kromek Polarisoft P2i Appointedd Mativision RimPro-Tec Candidate ID Good Loop Shot Scope Technologies DP Governance Grid Smarter Cities KCP Environmental Services Visual Products (Visorcat) Syrinix Intelligent Plant Wearable Technologies
IP
PATENTS
M Squared this year boosted their performance in the Patents asset category, leapfrogging three spots to take the coveted number one spot. P2i came in second place, having established comprehensive IP and patent management strategies in respect of its vast patent portfolio. Canon Medical Research Europe, boasting a sprawling and meticulously-managed patent portfolio, came in third place. As entrants continuously seek to mitigate the risks surrounding their IP portfolio it is evident that firms filing and relying on patents are alert to the risks and good practice associated with making patent applications: 95% of entrants scoring in the patents category conducted some level of searching or freedom-to-operate searches before filing patents, and 77% of entrants scored engaged thirdparty specialists to conduct searches on their behalf.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
M Squared P2i Canon Medical Research Europe Lifescaped Wearable Technologies RimPro-Tec Adrok Sphere Fluidics Grid Smarter Cities Kromek Premier COREX (UK) Heald Syrinix Recycling Technologies Shot Scope Technologies KCP Environmental Services Visual Products (Visorcat) City Farm Systems So To Company Greengineering
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IP
CRITICAL DATABASES
The GDPR revolution may be over, but nevertheless we saw an increase once again in the average score for entrants in the Critical Databases asset category. Coming in first place is Canon Medical Research Europe, who utilise a wide range of databases to inform various aspects of their business development and revenue generation. In second place was P2i, who operate a wide range of proprietary product and chemistry databases directly supporting their revenue streams. Third place went to M Squared, who employ a wide range of sophisticated analytics techniques in interpreting data, at the same time as maintaining robust data management strategies to ensure GDPR compliance. In line with broader market trends, data-driven marketing among IP100 entrants is now more prevalent than ever, with 73% of scorers in the Critical Databases category utilising customer data, to varying degrees, to inform their marketing strategies. Moreover, the firms scored in this category have continued to treat their critical data with extreme sensitivity, with 92% of entrants restricting employee access to critical data.
1 2 3 4 5 6 7 8 9 10
Canon Medical Research Europe P2i M Squared Mallzee Shot Scope Technologies Digitonic Appointedd Good Loop Candidate ID Premier COREX (UK)
IP
11 12 13 14 15 16 17 18 19 20
Sphere Fluidics Adrok Heald Grid Smarter Cities Double Your Success Greengineering Polarisoft MindGenius Intelligent Plant Lifescaped
TRADE SECRETS
For the second year running, the trade secrets category is this year’s most improved asset class for the top performers. Additionally, more entrants than ever are utilising trade secrets to protect their most critical IP assets, with 70% of all entrants utilising at least some level of trade secrets protection for their IP. In first place was Mativision, who develop and supply cutting-edge VR, AR and MR technology for major firms including Jeep, Vodafone and the MTV EMAs. Second place went to Sphere Fluidics, whose 2019 implementation of a trade secrets policy has significantly increased the sophistication of its IP strategy and internal IP culture. IP100 heavyweight P2i secured third place in the Trade Secret category. It is now the rule rather than exception for firms to make explicit provisions governing trade secret protection in employee contracts, with 71% of scored companies now opting to do so, and the remaining 29% capturing trade secrets under the generic umbrella of provisions for ‘Confidential Information’.
1 2 3 4 5 6 7 8 9 10
Mativision Sphere Fluidics P2i M Squared Digitonic Heald DP Governance Canon Medical Research Europe Lifescaped Kromek
11 12 13 14 15 16 17 18 19 20
Adrok Premier COREX (UK) Mallzee Greengineering Recycling Technologies Double Your Success Shot Scope Technologies Polarisoft Good Loop Grid Smarter Cities
KEY (Industry %) Business Services
8%
ICT & Software
32%
Material Science & Engineering 8%
Healthcare & Med-Tech
3%
Pharma & Life Sciences
5%
Oil, Gas & Renewables
Retail
26%
Manufacturing & Construction 8%
10%
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IP
SOFTWARE
First place in the 2019 Software asset category goes to DP Governance, a data protection consultancy firm that, with the aid of highly innovative proprietary technology, helps organisations across a variety of sectors identify the key weaknesses in their data protection procedures and protocols. DP Governance secured the top spot not only because its proprietary Parsyfal and Pathfinder software packages represent fine examples of how the development of cutting-edge software can underpin revenue generation, but also because it has established robust procedures for annotating, safeguarding, and scaling-up its software. Last year’s winners in the Software category Polarisoft come in second place, building on the outstanding documentation of its PPM Anywhere project management software. In third place was Intelligent Plant, whose Industrial App Store enables operators to streamline production, increase efficiency and limit unnecessary expenditure in the field of oil and gas. The vast majority of entrants now utilise off-site storage systems when protecting their software source code, with 93% opting to use cloud-based storage systems to securely store their source code.
1 2 3 4 5 6 7 8 9 10
DP Governance Polarisoft Intelligent Plant Mativision Premier COREX (UK) Kromek MindGenius Syrinix P2i Mallzee
11 12 13 14 15 16 17 18 19 20
Good Loop Digitonic Tempus IME Adrok Canon Medical Research Europe Shot Scope Technologies Double Your Success Appointedd M Squared Heald
IP100 AND OTHER NOTABLE ENTRANTS 1st Planner 20/20 Business Insight Acuutech Adrok Altea Consultant Altia Solutions Anatom Animation Garden Appointedd Articulate (Scotland) Beacon Centre for the Blind Bio ID Security Biogelx Biovici Diagnostics BrandFour Breaking Free Online Bright Ethics Bright Office Candidate ID Canon Medical Research Europe Captec CC Technology CDC Scotland Celixir Centrepoint Computer Services t/a oomi City Farm Systems Cleansorb
Clydebuilt Business Solutions CompanyNet ContractsWise Cyberhawk Innovations Cytomos Data Conversion Systems Datatecnics Deep Tek Winch IP Desktop Genetics DGA Precision Digitonic Dmist Research Dogtag Double Your Success Downhole Energy DP Governance Eagle Genomics Encompass Corporation Enigma Digital Enkelt Exmos Formedix FusionExperience Geospatial Insight Global Surface Intelligence Good Loop Greengineering Grid Smarter Cities
Guildhawk t/a Today Translations Heald HotPod Yoga Hyperdrive Innovation Intelligent Plant Interactive Invitations Intrallect Iotic Labs Jones Publishing t/a Citywealth KB Group (UK) KCP Environmental Services Kegsoft Klik2Learn Koolmill Systems Kromek Lexus International Lifescaped Loopeeze t/a FabLittleBag LUX Assure M Squared Malinkey Mallzee Mativision Metail Mevgen Technologies Miigen Miituu MindGenius
Minerva Research Labs Mujo Mechanics Mussett Engineering (6t9 Technology) nooQ Nostrum Group P2i Pacifica Group Personify XP Polarisoft Premier COREX (UK) R&G Associates LLP Recycling Technologies Redu Group RimPro-Tec Roadvert t/a Spedian Roomie Mobile t/a RoomPik Round Bank Engineering t/a Zikodrive Sequoia Partnership Shot Scope Technologies Shyre SL Social SmartEDiTORS Smith & Sinclair So To Company SoDash Soilutions
Speech Graphics Sphere Fluidics Standard Life Employee Services Stevenson Astrosat Sunstore Technologies Swipiicard Synoptica Syrinix Tempus IME The PR Machine t/a PingGo Tomatin Distillery Tookie Torion JVG Totseat Trafalgar Marine Technology Ltd TTS Pharma UK Doorstep Choice UWI Technology Visual Products t/a Visorcat Wearable Technologies WeeWorld Wesellanycompany.com WFS Technologies WheelRight wOndary Worldteachers Recruitment WRLD
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MARKET
LEADERS Sphere Fluidics has gone to considerable trouble and expense to protect the IP invested in its worldleading technology, and it’s now starting to pay off, as we report
Sphere Fluidics, a spin out from the University of Cambridge, was founded in 2010 to exploit novel miniaturised droplet technology.
Since then, the Babraham Research Campusbased company has developed Cyto-Mine®, a product which can process tens of millions of single cells (in pools), to identify those that produce valuable biopharmaceuticals. Dr Frank Craig, an experienced entrepreneur in drug discovery, was approached by Cambridge (University) Enterprise to help assess the commercial potential of the nascent technology. He recalls: “After positive feedback from other industry experts and meeting - and being impressed with - the other two co-founders, I became excited about the company’s potential and its team. We became committed to forming a company.’’ He is now the CEO of Sphere Fluidics. The Cyto-Mine ®, based on the firm’s picodroplet technology, integrates selective screening of hundreds of thousands of single cells – including isolation, sorting, dispensing and clone verification – into a single automated platform. This accelerates workflows, lowers costs, improves throughput and enables high-
value cells to be captured in a single run. Its potential caught the eye of early-stage investors and has attracted about US$22m in funding. Its technology also has collected awards for disruptive innovation, including being named number one in The Scientist magazine’s Top 10 Innovations of 2018. Originally, the company had three target markets: chemicals, biofuels and pharmaceuticals. For biopharma, picodroplets could be used to trap and measure valuable, novel molecules, such as secreted antibodies and other medically relevant proteins, from single cells. In the chemical industry, the picodroplets could be used to identify rare enzyme variants produced by in vitro transcription and translation or after secretion from engineered microbes. For biofuels, they could be used to identify engineered microbes or algae that secrete valuable biofuel precursors. Research soon indicated that the pharmaceutical market would accept new technology more easily and it then became Sphere Fluidics’ largest market. Sphere Fluidics interviewed 35 biopharmaceutical companies to see if its technology could be of any use. The responses indicated that there was a definite need, particularly among companies working on antibodies and cell lines.
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What evolved out of those conversations is the Cyto-Mine®, a compact, benchtop system that takes the place of what would ordinarily be accomplished by multiple instruments. “As soon as we knew our market, we then had to work out what products the customer wanted,’’ says Dr Craig. “We performed professional market research and soon got the answer: a highly innovative dream product that didn’t yet exist.’’ They expanded the R&D team, scoped out what that product would be, look like and cost and then raised about £5m in venture capital and angel investment to fund development of what became Cyto-Mine®. Sphere Fluidics formed a network of close partnerships with several early customers, who helped shape the product’s design, other technology developers and international OEM companies. It also filed patents and aligned its activity with the UK government’s “Patent Box” initiative. It also filed trademarks on the company logo and key products. Dr Craig says: “We’ve always taken intellectual
property very seriously. Since the company started, we’ve probably reviewed about 25,000 patents and we’ve built an international patent portfolio and in-licensed patents. We’ve developed our own patents and trademarks. Recently, we also implemented a trade secrets register, which was missing from our strategy. “We prioritise intellectual property as it does add value to investments because, when we’ve had in potential investors, they like to see that we have patents and use that we reinforce our brands internationally. To date, the company has invested probably about £1m in intellectual property but it has added significant value to the business and fuelled customer and investor interest”. The business operated from rented space in the university until 2013 when it got its
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own premises, and moved to the Babraham Research campus. It then took on more space and began expanding. As it developed Cyto-Mine®, the company grew. It went from 10 to 25 employees and brought in about 20 more external people a year over three years through consultancy. It also raised more investment to fuel the growth and doubled the size of its UK facility. The company also added new functions – such as quality management and human resources. Before the development of Cyto-Mine®, company revenue came largely from selling novel biochip systems and providing R&D services, but, within two years of selling Cyto-Mine®, which retails for £375,000, 80% of revenue came from product growth and not services.
“Sphere Fluidics interviewed 35 biopharmaceutical companies to see if its technology could be of any use. The responses indicated that there was a definite need”
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How does it work? Taking antibiotic-resistance testing as an example, since penicillin was discovered in 1928, antibiotics usage has been so significant it has stimulated bacteria to acquire resistance mechanisms. Now research is aimed at diagnosing antibiotic resistance, a process which then can generate a new class of antibiotics. Accurate, rapid and affordable testing can result in targeted antibiotics which help prevent the growth of drug-resistant microbial strains. But, as Sphere says on its website: “Finding bacteria that have evolved a resistance mechanism is comparable to panning for gold. Adding an antibiotic to a colony of bacteria selects those rare microorganisms that have evolved a resistance mechanism.” However, Cyto-Mine® can analyse single cells in microfluidic channels with dimensions of tens of micrometers, which allows biopharma research institutes to speed up their biological analysis. The Cyto-Mine® can encapsulate several hundred thousand single cells, or up to 40 million cells in pools, and it dispenses the “hit” cells of interest into the individual wells of a 96- or 384-well microplate. It screens up to 4,000 times more cells than by colony picking, making screening huge numbers without compromising on quality possible. Sphere Fluidics’ picodroplet technology takes an industrialised approach to analysing these single cells. The cell samples are loaded into the Cyto-Mine®. Cyto-Mine® is set up to perform the test required. The user then collects the plates of high-value cells and reviews the data using the firm’s Cyto-Mine® Studio software. Cyto-Mine® can do 40 million tests a day, the equivalent of 100,000 conventional microplates routinely used in labs, which would probably fill one or more double decker buses. Sphere Fluidics estimates that the cost savings are at least 14-fold but that the environmental benefits are a lot more.
Dr Craig says: “Part of the plan was to become a product company. We have indeed stopped services. It was a strategic decision to move to products as the revenue and scalability potential is greater. We sell 200 machines and that’s OK, but 200 clients needing services is more complicated.” The biggest market is the US (40%) followed by Europe and Asia. In the US, the company is going to open a sales office in California and is currently interviewing with a view to an appointment within the next six months. For other overseas markets, it’s following a different model. Dr Craig explains: “We have distributors all over the world except India, but we are now reviewing Indian distributors, so we will have global coverage shortly.’’ He adds: “We took on a new UK facility as well. In the last three months, due to growth and expansion, we took on another office in a science park near Cambridge which can hold 12 people.’’ Sphere Fluidics has now sold Cyto-Mine®s in the UK, Europe, Asia and America, and its sales pipeline has grown to more than £35m. Since it has started selling internationally, it has also started to extend its key patents
into those markets. It’s estimated that the combined markets within which Sphere Fluidics can operate is worth over £40bn per year. Now, Sphere Fluidics is developing complementary assay systems and continuing software upgrades to enable new workflows. Dr Craig says: “Systems in development enable single-cell engineering and isolation of useful phenotypes from single, engineered cells. This is done by fusing individual picodroplets containing single cells with an individual member of a different set of picodroplets that contain cell engineering reagents. The first application, just completed, enables individual T-cell therapy engineering with a single virus.’’ Sphere Fluidics is also working with Oxford Genetics, Twist Biosciences, and the University of Edinburgh to develop a desktop system to miniaturize and automate precision genome editing of single cells. That project has achieved proof of concept, and an automated rig is being developed. “We have also started to develop other new technologies for new markets,’’ says Dr Craig. “We’ve been recognised for our success and are now planning to access more funds to support working capital for Cyto-Mine® manufacture
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and further new product development. We are hiring ten more people in 2019 and have plans for further recruitment in subsequent years. A sign of success is that several large companies have approached us to discuss potential acquisition. However, we’ve decided to remain independent for now and focus on increasing the value of the company by rapidly growing sales, developing new technology and patents, and achieving profitability. “We’ve raised about £15m to date and we’ve taken out a £2m loan and we’re currently raising another £5m, which will probably take until early next year, from larger venture capital funds or other international investors. “We’re aiming to build the business and we will probably sell the business via a trade sale to a large corporate within the next three years and we will aim to do that for over £100m.’’ Sphere Fluidics is a business which has been built on innovation and intellectual property and, as such, it appreciates the value of IP100.
Dr Craig says: “I think the IP100 is an excellent initiative that key organisations have championed. It does reinforce the importance of IP and I think setting a standard is very good thing. It’s a bit like ISO 9001 and we see IP100 as
being of the same calibre. We take the program seriously and we do take feedback from it. It’s excellent in that it reinforces the importance of IP and it’s run in a very professional way by very impressive organisations.’’ n
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ENSURING SECURE
STRATEGIES
Law firm Baker Botts specialises in IP protection and corporate finance and it emphasises the importance of IP strategy marching in step with wider strategy No business with serious ambitions can afford to neglect the importance of Intellectual Property and of protecting that IP. Neil Coulson, IP partner with law firm Baker Botts explains why. “For any business which deals in any shape or form with a technical offering or a product, intellectual property is going to be vital to that technical offering or that product,’’ he says. “Intellectual Property is not just technology, your branding is your intellectual property too and no business in the world can get by without having effective branding and aligning its branding with its marketing strategy. So IP does permeate every aspect of every business which is why you have to align your IP strategy to the particular type of business that you are.’’ Baker Botts is an international law firm which specialises in advising high growth companies on their corporate and IP issues and Coulson finds that its clients in the UK are increasingly
alive to the importance of IP. He says: “Younger and growing businesses are switched onto IP, but they don’t necessarily know what the best IP protection for them is. Our role is to make sure that their IP strategy for the business and the business strategy are aligned. But what we also find with some of the high-growth start-up businesses is that they need to ensure that their spend on their IP protections is commensurate with their funding.’’ Baker Botts is a full service firm, operating across all disciplines. From an IP perspective, it handles the transactional aspects of IP, such as licensing agreements, technology transfer agreements, research and development agreements, and joint technology development agreements. Further, it represents clients in their disputes across patents, trademarks, copyright and, increasingly, the misappropriation of trade secrets.
From a corporate perspective, the firm advises both investors and fund managers, as well as high growth entities from formation through rounds of venture capital or other private equity financing, exit, whether by sale or initial public offering, and beyond. The aim of both practices is to establish long-term strategic partnerships with all clients to help them navigate difficult corporate and intellectual property issues. Coulson adds: “The other aspect is what we would call counselling: the advisory aspect of intellectual property, where we work with companies at whatever stage of development, but principally early stage companies going through a growth phase. This is to look at their existing intellectual property portfolio and work with them to advise on how they can best strategically develop that portfolio in order to meet the demands of investors who are going to be poring over the business
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to see what they have done and what they have got. “This is to ensure two things: first, that what they say is protected actually is protected and second, in terms of budget, that they are not over committing a budget to certain forms of intellectual property protection when that budget could be better spent on other things like, for example, branding or development of the technology, marketing, or sales. This is because some IP rights - principally patents - are more expensive to obtain and eat up a budget very quickly, both with prosecution costs and ongoing maintenance fees to keep the patent in force over the course of its life.’’ Patent protection, therefore, is not necessarily the most appropriate form of protection and more digitally oriented businesses might be better focusing their IP strategy around their branding and investing money in their branding and protection of trade secrets such as the algorithms that actually run the software on their digital platform. This can have two benefits: investors can see that the IP strategy is aligned with the business’s activities and, second, the spend on intellectual property protection can be managed and often significantly reduced. However, Coulson emphasises, every business has its own requirements. “There is no one set roadmap which fits all companies. They are all slightly different and it may well be that in some areas, particularly the life science area, spending money on patents is vital because they are important and your key form of protection. There will be others, such as more digital, database businesses, where what you want to make sure is that there are appropriate technical controls in place to ensure that your algorithms remain confidential. “So it really is a business-by-business analysis and it‘s impossible to have one size fits all in terms of strategy which is why, when we work with these companies from an investment portfolio perspective, it’s so fundamentally important for them, because it allows an investor to see that they are not doing
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standard things, that they have taken strategic advice and that they are moulding and shaping their protections to fit with their business and the direction that their business is taking.’’ Baker Botts will examine a company’s IP portfolio and advise it in the form of a report which the client can then show to its investors and potential investors. It reviews what that company already has and it makes recommendations as to how that company can develop its portfolio strategically. “If that company is going into an investment round it has two things,’’ says Coulson. “It has a document which reviews its IP protection as a snapshot in time, but it also provides a roadmap for that company, so that investors can look at the piece of paper as a starting point and also see, as part of its diligence process, that the company has followed a
recommended roadmap. Again, the whole aim is that the investor sees an IP strategy that is allied to the business. Baker Botts corporate senior associate Sarah Melaney explains: “The broad principle here is that investors want to ensure, when they’re subscribing for shares in a business, that the value that’s attributed to the business is protected and therefore there will be future economic growth. “But with a lot of technology businesses, a great deal of that value is tied up in their IP. The value of the report which we can provide is that investors can clearly see what protection is in place today and what needs to be done in order to get full protection. They can then make a decision: whether those protections need to be a condition for investment being made or, if things are going to take slightly
“It really is a business-by-business analysis and it‘s impossible to have one size fits all in terms of strategy”
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longer, clear steps set out in the investment documentation that the company will take post investment to ensure that that the IP strategy is implemented within a proposed time frame.’’ She emphasises that regular reviews have to be undertaken to ensure that the IP strategy is developed as the business develops and changes. This is particularly important when a business enters into agreements with other companies, perhaps on a joint research and development project, or by looking at a proof of concept model with a larger player in the industry. “What’s really important with those agreements is to make sure that they are protecting their own technology and that they are not giving away their crown jewels without realising it,’’ says Melaney. “That can be as easy as reviewing a company’s standard form of nondisclosure agreement to make sure that there is nothing inadvertent in that which is going to cause leakage of their technology. Also that they are safeguarding the ownership of the fruits of that project.’’ Much of Baker Botts’ work in helping clients protect their IP has an HR aspect. Coulson explains: “A lot of these companies have a relatively small staff where the technology may well be in the heads of one or two people. You have to make sure you have effective controls around those employees
potentially leaving and either setting up on their own or joining a competitor. “It’s also important that, if those employees do leave, you have a process that allows you to download everything that they know, so that your business is not going to suffer as a result of the fact that those who know how the technology works are going to walk out of the front door and there is nothing you can do without them.’’ At the other end of the spectrum, it’s important to look at the markets that a business is targeting and then how IP protection should be tailored for that. “Intellectual property rights are national rights and they are enforced and protected on a national basis, so you have to be picky about which jurisdictions you are going to register in, because no company, not even the biggest company in the world, can afford to register everything everywhere,’’ says Coulson. “Again, this is part of the company’s business strategy and we work with them to ascertain the key jurisdictions for them and again make sure that their strategy is aligned to their exploitation plans for those particular markets. One of the first questions we ask is, where do you sell now and where you plan to sell in the future? A lot of IP strategy is crystal ball gazing and you try to project where the business is going to be in one, two, three or four years’ time.’’ n
Need to know: • Baker Botts opened its London office in 1998 and has 725 lawyers in 14 cities around the world. • The London office specialises in corporate, intellectual property, energy and disputes resolution work. • Specifically, on the corporate and IP side, the London office represents technology and other emerging growth companies from formation through rounds of venture capital or other private equity financing, initial public offering, sale or merger and beyond. • With the corporate and intellectual property practices working side by side, its lawyers help to deliver creative and specialised solutions for their clients’ needs, working with them every stage from idea to exit. “As a lawyer, unless you can understand the technology you cannot properly advise on the strategy,’’ says Coulson. “Because there is no one size fits all, you need to have a beyond-basic knowledge of the technology behind a product or a service offering, because it’s that knowledge that enables you to craft the appropriate strategy for that business.’’ Melaney agrees: “I think that’s what differentiates our firm from other firms within the UK legal market. We really focus on two sectors: energy and technology and there is a nice intersection between them. That kind of sector focus allows us to have that depth of knowledge that means our clients are getting the right advice”.
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AHEAD OF
THE GAME Good-Loop demonstrates that it’s possible to get ahead in advertising without losing your heart, so long as you build some impressive IP Good-Loop is an Edinburgh-based ethical advertising platform that rewards viewers of online video adverts by facilitating donations to a chosen charity. Co-founder Amy Williams had an ambition to make the internet a more positive place, so she posted the following ad: “Needed: New CTO for Adtech social enterprise. Hiya, I used to work in advertising and I quickly learned how much money gets passed around from one corporate giant to another, all buying and selling the cheap commodity of our attention online. Let’s end this. Let’s create an online media agency which uses media money to give to good causes – whilst reducing the amount of annoying disrespectful ads online. Advertising that’s good for everyone. I’m looking for someone with a technical perspective who can manage and ideally contribute to the product development. Someone with experience in AdTech who shares my passion for not-for-profit social entrepreneurship. Sweat equity only
at this stage. Get in Touch!’’ Within a week, Daniel Winterstein, an academic, who specialised in data science, and AI consultant, got in touch. He had designed software used by brands including Harrods, Selfridges, and the BBC, as well as consulting for organisations ranging from start-ups to the Ministry of Defence. He had a 1st class degree from Cambridge University and a PhD in artificial intelligence. He was also frustrated with online advertising and had a keen desire to build something that would make the world a bit better. He and Williams founded Good-Loop together in October 2016, on a mission to make the internet a more positive place. Winterstein explains: “One of our founding drives is to turn advertising into a force for good. Part of that is raising money for charity, but there is another part, which is around advertising being broken, because users find it interruptive, annoying and therefore dislikeable. So we are an advertising company founded on the premise that people don’t like advertising - and we have to fix that. You cannot have an
industry which is against its public, and the rise of ad-blockers shows that’s where the industry is. Good-Loop is the antidote to a need for ad-blockers. We believe that advertising fulfils a function, it’s supporting great content, it’s letting you know about products that you may be interested in, but ads have to be something that works with the user and that the user is happy about.’’ Now the business employs 10 people, has a second office in London and is planning to open a New York office next year. Its annual turnover is around £1.5m. “In the first two years we achieved a fourfold growth in turnover every year and we are projecting that we can continue that, so we are looking at £5m in 12 months,’’ says Winterstein. “The wonderful thing is, that you take those numbers, halve them and that’s the money going to charity.’’ So far, Good-Loop has raised about £600,000 for charity. He explains how the Good-Loop works. “You might be reading an online article or browsing the web. We buy space with
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publishers across the internet, so it might be a newspaper like the Telegraph or the Guardian, or it might be a blog. Our ads are in the space where you would normally be served an ad. With us, you get something that says: Pick a charity, watch a few seconds of an advert and then in return, the advertiser is going to donate to that charity. You always have a choice whether you watch our adverts or not, it’s either opt in or opt out, it’s always up to you. You don’t have to watch this advert, but here’s the reason why you should.’’ He adds: “Key to the business model is that most adverts are wasted, and what we do, is to drastically lower that wastage – it’s this better performance, that funds the donation. By getting the user on side, engaging them, you create the extra value that then goes to charity.’’ Good-Loop charges the advertiser the normal rate and it pays the normal rate for the media space. “Our model is that we are buying the raw impressions from the publishers and we’re converting them into better user-engagement, which we sell to the advertisers,’’ says Winterstein. A great deal of sophisticated technology lies behind Good-Loop and the business puts great emphasis on staying at the cutting edge.
It spends about half of its budget on R&D, primarily in the form of software development. It employs a team of software developers and data scientists to write code and crunch data. “We also look at how people interact and behave with our software – that’s a key part of the business. Some of that’s coming from data analytics and some of that’s coming from user behaviour studies,’’ says Winterstein. The business also has to stay abreast of all the rapidly evolving forms of media. Online
Case Studies Footwear brand TOMS re-engaged with Good-Loop to launch and establish the TOMS Brand Evolution with new and existing audiences in multiple European markets. It nominated three charities: Ashoka, Helen Bamber Foundation, and Centrepoint. The campaign delivered 18% higher completion rates against previous campaigns, a strong CTR performance and a considerable uplift in social swipes. In Germany, Good-Loop drove a significant decrease in negative brand perception and an increase in neutral/positive responses, as well as a 44% uplift in recall against control groups. In the UK, Good-Loop also drove a significant decrease in negative brand perception and an increase in neutral responses, as well as a 30% uplift in recall against control groups. Also, more than £100,000 was raised for charitable organisations across Europe. Ashoka proved a clear favourite amongst viewers overall, with the notable exception of the UK where Centrepoint was most popular. Another Good-Loop campaign was to reinforce the sustainable credentials of the fashion brand H&M Conscious collection, while also driving high engagement with the creative. Through Good-Loop, H&M also donated to relevant and impactful social causes. – WWF 41%, Wateraid 40%, Woodland Trust 19%. Beyond strong ad performance, through using Good-Loop, H&M were also able to achieve positive change through their advertising - protecting humans, animals, and the environment. As a result, 600 families were provided with handwashing stations, 285 homes were provided for woodland wildlife and 25,000 seedlings were sourced.
video is its main platform, but it also operates on social media, does click through ads and it is exploring audio adverts, digital out of home and other channels. So does Good-Loop protect the fruits of this R&D? What are the barriers to entry to market it has carved out for itself? “It’s quite hard to give half your money away and still turn a profit,’’ says Winterstein. “It’s all about being able to buy media and convert it well. That’s where, if you look under the hood, we are both an optimisation company and a data company. When we started out, for the first year, every campaign we ran lost money, but we were learning, we were collecting data, we were improving, and in every campaign we were getting better. Now, our ability to run this model and raise money for charity and turn a profit is based on having data about people, how they behave around our ads in different settings, different publications, and therefore being able to buy smart, so that we can deliver a profit margin to ourselves and a return to the advertiser.’’ Good-Loop has also established itself as a trusted manager of user data, an area in which the industry has had widely publicised problems in recent years. “The Cambridge Analytics scandal was part of a more widespread problem,’’ he says. “Now the laws have changed in Europe, and in California. One of the values we have is that we are dealing upfront with the user. Saying, ‘look we are Good-Loop - this is what we do. Now, can we hold some of your data?’ And here’s why: it will raise more money for charity. When
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The Tech
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“Key to the business model is that most adverts are wasted, and what we do, is to drastically lower that wastage”
we put it like that, most people say yes. We are a trusted body who can manage this data, and that’s an IP asset.’’ Good-Loop says that 65% of its users are happy for it to profile them, because that will boost the revenue that can be diverted to charities. It can also ask people to sign-up to Good-Loop, thereby building an audience. This produces GDPR compliant personal data. Its post-advert email signup conversion rate is relatively high at 0.9%, and it aims to collect 50,000+ profiles per month by 2020. “Data is a key IP asset,’’ says Winterstein.
“It’s protected by keeping it private. Especially with it being personal data, it’s something we have security around. If you’re looking at legal measures, it’s protected by copyright, and by cyber security.’’ Good-Loop places a great deal of importance on its IP and welcomes the IP100 for supporting businesses in that. Winterstein says: “I think IP100 is a great initiative. Having a showcase for the innovation and IP that is being created in Britain can only be a good thing and it’s a fantastic platform to celebrate and encourage that.’’ n
Good-Loop’s technology is built to scale on demand. It runs on a robust platform of horizontally scalable microservices and efficient big-data storage. Its ad delivery technology automates the creation and reporting for this, allowing it to re-purpose existing client media assets – and deliver them across video, display, and social-media channels. It has created three versions: • Watch to Donate: its mainstream video advert format for brand building. • Click to Donate: banner advertising, for click-through campaigns. • Swipe to Donate: using SnapChat, Instagram, etc. to reach in-app users. Its delivery system can upgrade adspaces to use its format – converting existing ad-space into Good-Loop space. Again, this works across multiple channels. As well as the programmatic web, Good-Loop has launched its ‘Swipe to Donate’ SnapChat product, has integrated with Instagram, and has started conversations with Twitter. Data is a key part of the tech. As a company with a positive mission, GoodLoop is able to engage with users, and win their agreement to hold valuable profile data. This is stored in a proprietary database with fine-grained tracking for consent, quality and provenance. Good-Loop is positioning its technology within the ad-exchange ecosystem as both a demand side platform, DSP (distributing adverts) and is developing a pseudo supply side platform, SSP (allowing clients to buy via their existing DSP). It has a contract with AppNexus in place, providing the infrastructure for this. That will give fast commercial scale, as it moves the agency’s sales cycle from IOs and phone calls, to the client ticking a box within their DSP. This development stream also includes using machine-learning AI to optimise performance. The ecosystem positioning is setup to enable Good-Loop to deploy effective AI for a higher margin. The unique data it collects is aimed to boost the benefits this AI delivers.
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energising
growth Research and Development can be a costly process but, with the right professional advice, businesses can get back much of the cost, as we discover talking to consultants Catax
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Innovation and business development are thriving in the UK, but they usually require significant investment from businesses which can be difficult to source, especially for start-ups and SMEs. Any help from the taxman therefore is extremely useful. One of the most commonly known forms of tax relief is Research & Development (R&D tax credits). This is awarded to businesses that invest in innovation, usually in the form of developing new systems, processes, products, materials, devices, or any changes to the way a business works. Surprisingly, despite being available in the UK since 2000, it’s still largely under-claimed. The latest statistics, released from HMRC in September 2018, show that, despite the abundance of innovation being carried out by businesses, only around 43,000 R&D claims were made in 2015-16. To put it in context, this is only around 0.8% of the total number of businesses in the UK. The UK government is looking to increase R&D expenditure as a percentage of GDP over the next decade from 1.7% in 2016 to 2.4% in 2027, so there’s huge focus on ensuring companies are continuing to invest, and are given the appropriate reliefs for developing new innovations within their sectors. Catax is an industry leading tax consultancy which specialises in this form of tax relief and has been helping businesses claim back R&D since 2014. It employs more than 100 members of staff across the UK and guarantees to maximise the claim that is made on a client’s behalf. It reports that the average claim it sees for R&D is more than £56,000 – a sum that would make a significant difference to most companies’ annual accounts. Chief executive Mark Tighe says: “One of the most common reasons for not claiming is lack of awareness. Many businesses are unaware that they’re eligible for R&D tax relief. HMRC was careful to define R&D in such a way it could apply to varied work across multiple industries, the idea was to turbocharge innovation across every sector. “With this in mind, accountants have a key role in educating business clients about the potential gains of R&D tax relief and, where necessary, encouraging them to seek out the advice of an experienced tax relief consultant who can accurately advise on what work may qualify.
Playtime Catax recently acted for a UK registered toy manufacturing company in exploring a claim for both Research and Development and the Patent Box tax relief. The client’s business centred around the development of children’s playtime products which incorporate a soft putty like substance. This substance is the subject of a patent granted by the European Patent Office in 2009. Over time, the business has continued to carry on development activity to develop the technical composition of the putty like substance to extend the circumstances in which the toy can be used by children, for example with a toy gun and in a bath environment. In addition to development activity carried out to develop the patented invention, the company has also been engaged in further additional activity to develop new products to appeal to children in the area in which it operates. Catax was instructed to explore claims for Research and Development Tax relief and for the Patent Box tax relief for the accounting periods ending 30 April 2017 and 30 April 2018. The accounts for the 2017 and 2018 year-ends revealed that the new company had a total company turnover of £3m. Allowing for a 34.33% profit margin, the company had a combined £1,030,000 taxable profit for both accounting periods. The company’s anticipated CT liability for 2017 and 2018 was £195,700. With a total R&D spend for the 2017 and 2018 accounting periods of £150,000, Catax was able to help the company claim back £37,050 in tax relief. In addition, the analysis that Catax carried out revealed that the company satisfied the criteria necessary to qualify for Patent Box tax relief. An analysis of the company’s qualifying IP income for the year ended 2017, revealed product sales from products incorporating the patented invention amounted to £500,000 and for the year ended 2018, product sales from products incorporating the patented invention amounted to £450,000, a total of £950,000. A consultation was carried out with the company to enable calculation of the Patent Box benefit. The overall company turnover for the accounting periods ended 2017 and 2018 amounted to £3m with turnover from patented products in the same period being £950,000. The resulting reduction of Corporation Tax payable was £22,016.25. Tighe says: “As a result of the combined claims for tax relief in accordance with the Research & Development Tax SME regime and the Patent Box, this client has achieved a corporation tax saving of £61,512.60. Our client has been able to invest the tax saving into the business in order to continue to innovate and carry out new product development.’’
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“If your company has registered patents, it would be worth checking how much income they bring in, something that Catax would be able to help advise on’’ “Many other businesses just don’t realise they’re doing R&D. This can be partially due to the fact they just see it as their day job, even if they’re constantly innovating or they think R&D is for pharmaceutical companies in laboratories curing disease. In fact, many R&D claims are in sectors such as engineering, manufacturing, IT, food & drink and energy etcetera. Furthermore, R&D can be a process or system, not necessarily an end-product. Another common reason that businesses don’t claim is because they think claiming money from HMRC could result in an enquiry.’’ In fact, he points out, HMRC encourage this relief as it brings and keeps innovation in the UK, and encourages capital spend and employment. Successful R&D should result in further employment, add to a company’s bottom line and increase taxable profits in the future. Another lesser known relief is the Patent Box. This form of tax relief, which was phased in from 2013, offers a reduced rate of
corporation tax of just 10% on profits made from patents. This represents a near halving of the rate of corporation tax payable on IP related income, so it can make a significant difference to a business’s balance sheet. “You would think that with a potential tax saving of this amount, companies would be champing at the bit to find out more and claim,’’ says Tighe. “But this has not been the case to date. The latest HMRC statistics on the number of Patent Box claimants will be published in October, however, the statistics which have been published to date indicate low numbers especially when compared with the number of R&D tax relief claimant companies.’’ He explains that the reasons for this are varied and are well rehearsed. They include the fact that the calculations are complicated, the benefits were unhelpfully phased in between 2013 and 2017 rather than being immediately available in full, and the requirement to elect in. Also, as
with R&D, many companies aren’t aware that the relief exists at all. “If your company has registered patents, it would be worth checking how much income they bring in, something that Catax would be able to help advise on,’’ adds Tighe. “The Patent Box can apply to sales related to, or stemming from, the patents in a multitude of ways, so a good understanding of the rules is needed to ensure nothing is missed. “If a company makes sure it’s claiming R&D tax credit for initial work to develop innovative products and services, then protects and capitalises on the resulting IP through licenses, sales and the Patent Box tax relief, it should see a major boost to its income which can be reinvested to fuel further innovation and growth. “If you’d like to find out more about claiming back either of these reliefs, speak to Catax today.’’ n Catax can be contacted on 0300 303 1903 or enquiries@catax.com
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Fintech Fintech is one of the fastest growing sectors in the UK and Catax has already worked with many businesses in the sector. One client, a data services provider, began a project to identify companies which have been mis-sold insurance on large scale business investments. The project involved using data bases and systems to identify the investors and provide their sales teams with unique functions to search for the data. The project cost the company more than £196,000 over two years and they were able to claim back more than £33,000 in tax credits in this spend. Another Catax client, Duncan Walker, who has worked with SMEs in Scotland for more than 35 years as a banker, accountant and business advisor, has benefited from three years of claims with Catax. He says: “Edinburgh is a strong market for fintech and I agree there should be more
encouragement for those in this sector, and others, to use the benefits available to them, such as R&D tax relief, to fund future innovation. Working on partnership
with Catax was a pleasure, they made the whole process really smooth and professional for my client and, in turn, enhanced my reputation.’’
and develop a modular surveillance solution that could deliver comparable levels of radar surveillance to existing military solutions, while being compatible with older models of civil aircraft. As this was a jump from military to civil aviation technology, the company’s independent research revealed no existing regulations or guidelines in place.
Catax guided the company through several succeeding years of R&D claims as it has developed its products, teaching them how to record information and identify qualifying costs so it can more intelligently plan future R&D projects to maximise ROI. The tax benefit identified was worth more than £2.5m.
Military solutions Founded in 2005 by two RAF pilots this client delivers bespoke innovative solutions to challenging problems in the field of aviation. The company operates across several sectors, including defence, security, survey, engineering, agriculture, events, travel and disaster response for the oil and gas industry. Among its customers, it numbers government departments – including the MoD and Home Office – major oil companies, defence businesses, airlines and blue chip corporations. The business has designed and developed a highly modular, ultra-low radar interfering mission pod product for use in air based surveillance operations. The hardware, a light external shell that fixes to the underside of an aircraft, houses all the necessary electronic equipment to deliver surveillance capabilities without compromising radar penetration. The company was aware that, although there were off-the-shelf solutions, they had fundamental drawbacks. The company began exploring the potential to design
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REAL TIME
RETAIL
High streets might be struggling, but Mallzee is a business that has built IP that can be the salvation of retailers, while also making life easier for the shopper, as we report Mothercare’s UK division has gone into administration, meaning the closure of another 79 stores on the nation’s high streets. Hardly a month goes by without news of another one-time retail giant getting into difficulties in the face of a revolution in the country’s shopping habits. And a walk down any high street bears out the news headlines, with growing numbers of discount stores, charity shops, or just boarded up shops. Callum Stuart, cofounder and chief operating officer of Mallzee, says: “The UK retail industry is in the middle of a perfect storm, with rising costs and lowered consumer confidence and political uncertainty, and all this happening at a time when consumer shopping behaviours are evolving faster than ever before, thanks to the globalisation of availability via the internet.” Thanks to the internet, shoppers are no longer limited to what is available in their local stores, but can now shop with retailers anywhere in the world by using their mobile phones. “This explosion in choice and availability is undoubtedly a good thing for consumers who’ve benefited from the price pressure
created, the sheer volume of choice available and the delivery/distribution channels open to them,’’ says Stuart. “On the flip side, retailers are facing their biggest challenge in decades - having to work harder to attract and retain customers with both their product and their shopping experience - all against a backdrop of economic and fiscal pressures.’’ In 2013, this revolution was well under way, but, despite the benefits the internet brought to shoppers, Stuart saw that shopping on a mobile was a far from smooth experience: shoppers had to log onto each individual retailers website, view that collection, log out and then into another to make a comparison. Stuart, along with his cofounders Cally Russell and Jamie Sutherland identified a way of making shopping for clothes on a mobile easier and set up Edinburgh-based Mallzee to
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develop a non-retailer fashion shopping app. This quickly became a success, being named by Yahoo as “one of six apps that will change the way we shop forever”. Stuart and his team realised that the customer opinion data being generated gave a powerful insight into customer intent and product success. So, in 2017, they set up a retail insights and data analytics arm of the business Mallzee Insights, to help retailers improve their product offering decision making by adding customer opinion. Stuart explains: “Mallzee Insights enables retailers to add real time, authentic customer product opinion at all stages of the product development and buying process. We offer a testing solution called Product Future which allows partner retailers and brands to showcase products before they’ve committed to stock on the Mallzee app to a specifically selected
“Mallzee Insights enables retailers to add real time, authentic customer product opinion at all stages of the product development and buying process.”
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customer grouping and to quickly gather customer opinions highlighting which products are likely to be best sellers and which should be avoided. This customer insight is benchmarked against other products on the market, giving context which helps improve product selection and also stock ordering and merchandising. “Mallzee Insights is unique, as we test prerelease products in the Mallzee shopping app, which means we don’t need access to a retailers own customer database and can accurately reach specific customer groupings directly. This approach also means the consumer is giving feedback in a real shopping environment instead of a survey system that is often not accurate or easily manipulated.’’ To date, Mallzee has gathered more than 600 million customer opinions on over four million products. It has 26 employees and works with more than 150 high street and designer brands and retailers. Both sides of the business, Mallzee and Mallzee Insights, are important and will be developed in tandem. “Helping people to sell and providing
them with market information are both important sides to the business,’’ says Stuart. “Without the consumers engaging and using the app and buying or discovering products we don’t have the ability to do the other side of it. So they’re both really important. “We’ve focused a lot over the years on the consumer and on making sure the consumer experience is brilliant and making people want to use it. We’re now at the stage where we can use all of that time we’ve invested and the IP we’ve built there to generate those insights, but we have to be careful not to ignore the customer. We’re going to keep the focus on both sides, they’re both really important and need to work in balance with each other. “The massive dataset we’ve built of consumer opinion over the last five years on over four million fashion products in the UK we think is one of the largest in the world and there’s loads of interesting problems that we could solve with it. Our whole IP strategy is about, let’s find interesting problems in the retail space and use the technology and the data we can create to solve those problems for retailers and brands and also for our consumers and make that experience better.’’ Mallzee is self-consciously an IP business. It has built all its own technology and it owns all its technology, convinced that this is the best way to maximise the customer experience. This has necessarily meant a big investment in R&D. “We have lots of really smart passionate people,’’ says Stuart. “There will be a lot of
times we’ve had a marketing person sitting with a software engineer, sitting with someone doing research, and all these people together will be working on IP and developing it, whether it’s the consumer experience or data insight. There’s lots of collaboration across different parts of the business, using peoples’ different skills and it’s really important to bring the customer into that conversation as well. “We’re always developing our products and services and the way we use the data that we’ve got. There’s research work that’s ongoing and at various different stages and all of these different things should help to drive the customer profitability or waste reduction. “We have PhD data scientists working on that full-time and then we’ve got the things that our customers are asking us for and saying it would be really helpful if we could do X or Y in the customer discovery. We’re taking those conversations together with the IP and data scientists and saying, this is the product we can put together. There’s a lot of research at the moment which is all very IP heavy and based on the dataset that we’ve got which we’ll be utilising with the industry over the next couple of years.’’ As he says, the fruits of all this research are IP-heavy and this means that the IP must be protected. “IP is absolutely key to our business and we’re not giving it away,’’ he says. “The app is all ours, we own all of the IP behind it and the data we’ve gathered over the
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years and we’re very protective of it.’’ He hasn’t found patenting to be an appropriate route, as patenting software algorithms is notoriously difficult. “In our space, we can spend an awful lot of time doing patent work but you may be better focusing on the customer and driving their experience, as long as we’re comfortable that nobody can copy what we’re doing and they can’t. “The way to protect the shopping app is to make it better than anyone else’s. That’s what we had to do. None of this is possible for somebody else without the data that we’ve generated over the last five years. We have a massive data pool of more than 600 million customers opinions and people can’t just copy that, they can’t just make it up. We like to think of it as a data moat that protects the business.’’ In addition, Mallzee ensures it has in place tight non-disclosure agreements with anyone it talks to or works with and all its employees have robust IP clauses in their contracts. Mallzee is backed by companies such as Royal Mail and leading investor Par Equity, who have been keen to ensure that the
business’s IP is adequately protected. Stuart says: “At our heart we’re a data company, which means IP is of huge importance. This clearly comes out in any conversation with investors and we have to be able to showcase how we’ve protected this to ensure the business can continue to change the retail industry. Convinced of the importance of IP, Mallzee is a big supporter of IP100. Stuart says: “For these companies, anything that can highlight the IP that they have got, is absolutely fantastic. I guess we sometimes don’t shout enough about what we are doing from an IP perspective and I think anything that highlghts that and the fantastic companies participating is positive for the industry. From our perspective fashion is notoriously light on IP but the future of the industry is all going to belong to the companies that have strong IP in their businesses.’’ Having had such an impact in the UK market, Mallzee is now starting to look at other markets. “We very much have global ambitions because this works across the world as far
as we’re concerned,’’ says Stuart. “Everybody has got the problem that we’re solving from a retailer perspective and retail is certainly under pressure at the moment, so, if we can help brands in the US or across Europe, then that is the right thing to do. “We focus on the UK at the moment, we’re working with lots of brands and retailers in the UK and we’re going to continue to drive that. When we show them improvements of up to 6.1% from utilising our insights they clearly feel the impact - especially when trading is so difficult. For us, it’s about what other territories this works in: what are the other territories where people are interested in working with us? So, we’re looking at across the pond and we’re looking at Europe and Asia. “China is on the radar, I think it’s a phenomenal economy and there’s so much going on, but as a team of 26 we have to focus. The first thing has been about dominating one market and that is what the UK has been and then looking at the brands we work with and what are the natural territories that they are working in and where we can work with them to continue to make retail better.’’ n
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“Intellectual property should be a critical element of an SME’s business strategy”
So says the Intellectual Property Office (IPO). Here, the IPO helps you understand what your intellectual property is worth to your business and outlines the free tools and advice available What is IP? Every business owns or uses intellectual property (IP). Intellectual property rights not only allow you to license your ideas and creations to others, they also grant you the ability to take legal action if others attempt to make, use, import, copy or sell products based on your work. Your business IP is anything unique to you that you have created – your brand, your product or service, its name, its look and feel. There are four main types of IP: • Patents – protect the processes that make things work, what they’re made of and how they’re made • Trade Marks – a sign, for example a word, logo or slogan, which distinguishes the goods and services of one business from another • Designs – protect the visual appearance of a product, including the colour, shape, texture, material and ornamentation • Copyright – protects written or recorded creative and artistic material, including websites, logos, photographs, documents, financial plans, music, drawings, literature and advertising materials etc. Copyright is automatic, and free, and has the advantage of not needing registration in the UK. Other types of IP include trade secrets, know how / show how, creations such as
plant varieties, for example - intangible assets that can play a significant role in a business’s plans for sustainability and growth if they are understood and managed with care. How can the Intellectual Property Office help you? The focus of UK Intellectual Property Office (IPO) is to create a world leading IP environment. It carries out a wide range of activities specifically for SMEs, helping them to access the advice and support needed to recognise the IP they hold within their own business and gain maximum value from it. IPO work covers a spectrum from general awareness-raising and training to service provision. Outreach to businesses is via digital and face to face engagement, as well as delivering through partners. Why not come along to an IP Masterclass? The IPO’s Business Outreach Team attends partner events and conferences around the UK and provides a variety of services, from onehour taster seminars to a 3-day intensive IPOrun ‘IP Masterclass’ course. The team interacted with more than 100,000 businesses last year. A significant number of those businesses fed back to us that they had taken informed action about their IP as a result. The IP Masterclass course is central to the
IPO’s effective work with partners who include the Growth Hub regions in England, the UK library network and devolved authorities. The course equips advisers to have informed conversations with SME clients about their IP assets. To date more than 700 advisers have completed the course and report a positive response from their customers. Help yourself to our free online learning The Intellectual Property Office has a range of online learning tools to help you better understand your IP rights. ‘IP for Business’ is a suite of digital tools available on the Gov.uk/ IPO website tailored for businesses and is also useful for intermediaries whose role is to advise business. Our IP Health Check free online tool can help you identify what IP you own. Answer a series of questions and receive a tailored confidential report, based on what you have told us. IP Equip tool is a free online CPD-accredited training tool. It takes your through 4 short modules and uses case studies to show why intellectual property is important. The ‘IP Equip’ and ‘IP Healthcheck’ tools alone have been accessed more than 50,000 times. Are you more of a visual learner? Our IP Basics videos provide short, simple explanations of the various IP rights. They also cover licensing and franchising, how to avoid infringing IP and what to do if your business is a victim of IP crime. You can also sign up to our e-alerts to receive IP advice, events and updates direct to your inbox. n Further information is available at www.Gov.UK/IPO.
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The future is bright UK entrepreneurs who have been California Dreamin’ have the chance to learn from the best in Silicon Valley, thanks to FutureX High growth, high tech businesses all seek to emulate the Silicon Valley giants who proved what ambition and ideas can do. Now, thanks to Edinburgh-based company FutureX, they can take a trip to California and learn from some of their heroes. Every year, FutureX takes a handful of innovative and ambitious tech founders to the US on its Silicon Valley Scale programme. There, they meet world-leading entrepreneurs, investors and executives for an immersion in the culture of the San Francisco bay hotbed of tech. Through programmes like Silicon Valley Scale, FutureX supports business leaders building a more sustainable, socially-conscious global economy. FutureX is probably best known for its annual Startup Summit, one of the UK’s biggest startup events. There, entrepreneurs gain insight into emerging trends, new ways of working and learn the tools they need to thrive in business. FutureX’s Silicon Valley Scale programme builds on Startup Summit’s success. The winner of the Startup Summit Competition, who pitches on stage at the event, is guaranteed a fully-funded place on the programme. Bruce Walker, FutureX Co-Founder and
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CEO, explains: “We take the most promising technology founders who are solving big problems, have built tech that is good for people and the planet, and are ready to scale. “Silicon Valley Scale starts in Edinburgh, where the cohort takes part in workshops, craft their pitches, and investors and experts prepare them for the trip. It culminates in an immersive programme in Silicon Valley, where they take part in meetings and masterclasses with founders and executives from companies like Facebook and Google. “The entrepreneurs learn how Silicon Valley works, debunk business myths and assumptions, adopt a scaling mindset and stay on top of the latest trends in tech.” Silicon Valley investors that have participated include Uncork Capital, which has invested in Fitbit and Eventbrite. “Entrepreneurs can build fantastic companies anywhere in the world. It’s not necessarily about being based in Silicon Valley, but anyone can learn from the way these tech giants have built their businesses. Scottish companies can take some of the best components and apply them to our context.” The programme, which costs £4,000, also gives participants membership access
“We take the most promising technology founders who are solving big problems, have built tech that is good for people and the planet”
to an influential network. “One of the perks of Silicon Valley Scale is the strong alumni network the entrepreneurs access when they return to the UK,” says Walker. “The entrepreneurs who participate are carefully selected by our team: they support each other and benefit from our network of investors and contacts. We also often find them speaking opportunities at our events.” There have been 32 companies on the programme since 2014. Previous participants include Care Sourcer, which recently raised about US$15m for its care matching platform, TickX, which featured on Dragons’ Den, and Current Health, which also raised about US$15m for its wearable vital signs monitor. For the Silicon Valley companies which welcome the cohorts, it’s a question of acknowledging their own humble beginnings by giving something back. It also gives them a chance to keep a finger on the pulse of new developments in tech. The next programme runs in April 2020 and already several of the eight places have been booked. “We are building an ecosystem around the Silicon Valley Scale entrepreneurs. Part of that is working with people like IP100 and Metis Partners, who ran a workshop at Startup Summit,” says Walker. “Entrepreneurs must understand the value and unique intellectual property they are building in their companies and plan strategies to monetise and protect those assets.” n
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Innovate to Succeed:
The ELITE Ecosystem’s Tips for Success Umerah Akram shares how London Stock Exchange Group identifies innovation as a key area of focus for private companies looking to accelerate their growth ELITE, London Stock Exchange Group’s ecosystem and platform for private, ambitious companies, is pioneering the way forward by offering companies structured support in relation to all internal and external aspects of growth. ELITE works with companies along their growth journey, providing them a solid support mechanism to ensure they build resilient businesses and take advantage of new opportunities. Launched in the UK in 2014, ELITE has now expanded to over 40 countries. As Umerah Akram, Head of Business Development for ELITE says “With ELITE’s presence growing throughout the world, we are seeing an increasing number of our companies collaborating with each other through acquisitions, joint ventures and normal terms of trade. And certainly, one of the key aspects of ELITE is its network. Whilst ELITE itself is sector agnostic – indeed our companies come from over 30 sectors – what companies find is that many of their challenges and pressure points are the same. The ability to share experiences and provide peer review, allows these businesses not only the comfort of knowing that they are not alone in their challenges but also provides an avenue to find solutions to these challenges”. “ELITE provides founders, CEOs and management teams of companies the knowhow, network and confidence to navigate
different routes to growth and investment” Companies that participate in the programme typically have revenues of more than £5million, are growing at a rapid pace and are looking to sustainably accelerate their growth. However, for IP-rich companies, that are capital intensive and can often spend significant time on research and development before even reaching commercialisation - there is often a desire to get involved in ELITE at an earlier stage. As Akram says “our businesses all have two things common: a good growth rate and great ambitions – and really our role is to channel these ambitions into a cohesive, strategic plan for growth and prepare them to access capital, whether public or private”. ELITE is underpinned by 10 key aspects of growth, from strategy and access to markets, to people and innovation. When thinking of innovation, we may often think of R&D activity, products or services that the business is launching or selling. However, innovation is critical in all aspects of the business. We encourage ELITE companies to think of three things in this context: how to create an organisation that supports innovation; the processes to funnel innovation within the company; and how innovation is measured and tracked to better understand its impact.
One such business, that has benefited from ELITE, is IP100 entrant M Squared lasers that has innovation as the very heart of its business. ELITE provides access to a wide range of expert advice and, most importantly, access to investors and capital. IP-rich businesses need significant amounts of funding and investment to continue R&D and drive their commercialisation efforts forward. We emphasise the need to match innovation activities with the right sources of capital and ensure investor objectives align with the company’s objectives. ELITE’s focus on investment preparation gives companies the confidence and knowledge to navigate their funding options and ultimately evolve their capital structure to match business needs. ELITE is where growth happens. It is a centre of excellence for entrepreneurs and the most ambitious companies, showing the possibilities that are available for businesses to achieve, in a highly competitive marketplace. We are committed to transforming our companies’ visions into clear plans, actions and most importantly results. n With ELITE, the opportunities are endless. Read more inspiring ELITE stories on our website at: www.elite-network.com
GET #IP100READY TO: Attract new equity investment at a higher valuation
Gain recognition for investment in your innovation
Stop theft of your IP
Safeguard your IP and expand internationally with confidence
Secure an exit price at a higher multiple Demonstrate the importance and value of your IP to lenders
As founders of the IP100, we recognise the obstacles faced by growing IP-rich companies and there is no one more committed to finding solutions. We are trusted by all kinds of businesses, from start-ups to PLCs, to identify, value and leverage the intangible assets that underpin a company’s revenues and competitive advantage. Our IP Valuation and IP Advisory services are relied upon by lenders and investors, and by companies looking to manage IP risk, plan an effective exit, raise investment, restructure debt and improve balance sheet value. Whatever your company’s goals or challenges, we can provide a tailor-made IP solution. Get in touch today for a free, informal chat about how we can help you get #IP100ready. Email us at info@metispartners.com or call us on +44 141 353 3011.
0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 1 0 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 1 0 0 10 0 0 0 0 1 1 0 0 0 0 1 0 1 1 0 0 0 0 0 1 10 0 0 0 1 0 10 0 1 1 0 0 0 0 1 0 0 1 1 0 0 0 0 1 0 0 1 1 0 0 0 0 1 0 0 1 1 0 0 0 10 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 10 0 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 0 0 10 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 1 0 1 0 0 10 0 0 0 1 1 10 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 1 10 0 0 0 0 1 0 1 1 0 0 0 0 0 1 0 1hope you have enjoyed 1about the entrants driving 0 0 0 0 0 1 0 1 1 0 We reading the 0 0 0 0 1 10we’ve had fun writing 0 0 0 0 0 1 1 0 growth of the IP100, about them and watching 1 0 0 0 0 0the last year 1 1 0 1 0 0 0 0 0 1 1 them flourish over 0 1 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 10 0 10 0 10 0 10 0 10 10 0 10 0 10 0 1 0 0 1 0 0 1 00 10 1 0 0 0 0 1 0 10 0 1 0 0 10 00 1 1 0 0 0 0 0 1 0 1 1 0 0 0 1 0 1 0 0 0 0 0 0 10 0 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 0 0 0 0 1 1 10 0 1 10 0 10 0 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 10 0 0 1 0 0 10 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 0 0 10 0 10 0 10 0 10 0 10 1 0 0 1 0 1 0 0 0 0 1 0 1 1new entrants to the IP1000rankings, 0 0 0 0 “While we are delighted to welcome many 0 1 0 1 1 0 0 0 0 1 it is encouraging to 1 see0so many existing entrants continue to1 develop and refine 0 0 0 0 1 0 0 1 1 0 0 0 0 1at least partly – from their learning – we0 believe, IP100 experience.” 0 1 0 0 1 0 10 0 10their IP strategies, 1 0 0 0 1 0 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 1 0 0 10 0 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 10 0 0 0 1 0 10 0 1 1 0 0 00 0 1 0 1 1 0 0 0 0 0 1 0 10 0 10 0 1 10 0 1 50
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This is our fifth annual IP League Table and it’s gratifying to see the level of interest and support the IP100 benchmark now attracts. Entrants not only see the value in analysing, evaluating and safeguarding their IP, but also in having an objective and respected benchmark which both validates the strength of their IP assets and offers an IP score that gives confidence to their investors. Little wonder then the IP100 is now attracting the attention and interest of businesses, advisers and investors in the US. This is a particularly welcome development as it can only lead to greater collaboration and strengthening of cross-Atlantic networks. While we are delighted to welcome many new entrants to the IP100 rankings, it is encouraging to see so many existing entrants continue to develop and refine their IP strategies, learning – we believe, at least partly – from their IP100 experience.
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This is another strength of the IP100 platform; it has created a community or ecosystem of like-minded individuals and IP-rich businesses who are actively sharing and learning from each other’s experiences. It’s well acknowledged that clusters can be effective engines of economic growth and this is true of IP-related clusters, as it is of any other business activity. Whether it’s the IP100 collaborating with John Anderson’s laudable Growth Advantage Programme at Strathclyde Business School in Glasgow or jointly hosting an IP100 Club event with Momentum London, we all agree and recognise that IP assets are central to the success of high growth businesses. It is at least a couple of decades since commentators began talking about the knowledge economy to characterise the kinds of businesses which would, in the future replace the old heavy industries
that were already in decline. We are now living in the future and the predictions have been validated. Businesses are now more about ideas than they are about things. Intangibles or IP assets are now inevitably more important than physical assets to many businesses. It follows then, that just as in the past, businesses had to develop, value and safeguard their physical assets, now they must do the same for intangibles, their ideas, their IP assets. Both the IP League Table and IP100 are enablers and provide a much-needed spotlight in that regard. They are undoubtedly successful because they meet a need in the market. We hope getting an IP Score will continue to be a worthwhile goal for many companies and judging from the quality of the entrants across the IP League Table and in particular those featured in this year’s top 20 rankings, we have little doubt these entrants will continue to prosper well into the future. n
Nourishing Innovation, Energising Growth Research & Development tax credits give you the ability to revolutionise and transform your business. Catax are experts in specialist forms of tax relief and have been helping businesses growth and innovation for over ten years, uncovering a total of £242 million for our clients to date. Working with IP100, shining a spotlight on your IP. The average claims we see for R&D are in excess of £56,000 – a sum that would make a big difference to most companies’ development and innovation projects.
Contact us today to uncover your hidden value.
Automation
Development of New Materials
Improved Processes
Development of Innovative Formulas
Call us now on: 0300 303 1903 or email: enquiries@catax.com or visit: www.catax.com
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Development of New & Improved Products
Development of Innovative Recipes
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TA X R E L I E F U N C OV E R E D
Manchester – London – Glasgow Channel Islands – Vancouver
0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 1 0 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 1 0 0 0 0 0 10 0 0 1 1 0 0 0 0 1 0 1 1 0 0 0 0 0 1 10 0 0 0 1 0 10 0 1 1 0 0 0 0 1 0 0 1 1 0 0 0 0 1 0 0 1 1 0 0 0 0 1 0 0 1 1 0 0 10 00 0 1 0 1 0 0 1 0 0 0 1 0 1 0 0 1 0 0 10 1 0 0 0 0 1 0 10 0 1 0 0 10 00 1 1 0 0 0 0 0 1 0 1 1 0 0 0 1 0 1 0 0 10 0 0 0 1 1 10 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 1 10 0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 1 10 0 0 0 0 0 10 0 10 0 10 0 10 0 1 0 0 0 0 1 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 10 0 10 0 10 0 10 0 10 10 0 10 0 10 0 1 0 0 1 0 0 1 0 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 0 0 1 00 1 1 0 0 0 0 0 1 0 1 1 0 0 0 1 0 1 0 0 0 0 0 0 10 0 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 underpin the competitive 0 10 0 1“IP0assets 0 1 advantage 0 0 0 0 0 1 1 0 1 0 this, IP remains one0 10 0 0 0 0 1 1 of most businesses. Despite 0 0 0 0 1 1 0 0 0 0 of the least recognised asset classes, rarely1being 0 1 1 0 1 0 0 0 0 0 1 1 0s balance sheet. The IP 0 10 0 1 captured on a0 company’ 0 1 0 10 0 1of0IP and 10 Table emphasises0the importance League 1 0 0 0 0 0 0 1 1 1 0 0 companies investing10 0 10 0 a spotlight on1those 0 0 1 10 0 10 0 1shines in IP,0thereby increasing national productivity and 0 0 1 0 1 0 0 0 0 1 0 1 sharpening the UK’ s economic competitive edge.” 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 10 1 0 0 0 0 1 0 0 1 1 0 0 0 0 1 0 1 0 0 0 1 0 10 0 10 1 0 0 0 1 0 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 1 0 0 10 0 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 10 0 0 0 1 0 10 0 1 1 0www.metispartners.com/ip100 00 0 1 0 1 1 0 0 0 0 0 1 0 1 1 10 0 10 0 10 0
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Stephen Robertson, founder of Metis Partners