Where is the value and opportunity in the patent industry?

By Gene Quinn
November 9, 2017

Where is there currently value and opportunity in the patent industry? That is the question I asked a panel of experts recently. Each of the experts surveyed will participate in IP Dealmakers 2017, will take place from November 15-17, 2017, in New York City.

Not surprisingly, several of the experts who responded identified global markets as where opportunities currently exist, which is not surprising given the weakening of the U.S. patent system over recent years and a concerted effort by European and Chinese leaders to strengthen their respective patent regimes and marketplaces. Several others focus on opportunities that also exist for those companies that strategically view their patent portfolios and innovations as doorways to new markets as part of a growth strategy.

 

Kimberly Cauthorn
Global Intellectual Property Leader, Tech Media & Telecom
Willis Towers Watson

Companies are taking a more holistic and strategic approach to building and using their patent portfolios. They are paying greater attention to the financial costs and benefits. They are examining how the IP strategy fits into the company’s growth strategy. This takes IP out of the sole domain of the legal department and into the company’s vision for the enterprise. Over time, companies will become better at assessing and appreciating the value not only of their patents but also of patents owned by others.

Kim Cauthorn is the Global Intellectual Property Leader, Tech Media & Telecom at Willis Towers Watson. Kim leads the team responsible for assisting clients with intellectual property and broader intangible asset risk issues and developing intellectual property risk quantification tools and risk transfer vehicles.

 

Jaime Siegel
CEO, Cerebral Assets LLC
National Trustee of the Rock & Roll Hall of Fame & Museum

As I have previously stated, the depressed market for patent assets creates opportunity. Buy low, sell high, right? I am being engaged by Fortune 20 companies to act as a buyer’s broker for them, as they seek to capitalize on the value purchases that are out there now. AST recently reported that they had almost 50% more patents offered to them for sale through their current patent buying program. I believe that this increase in buying opportunities is reflective of the increased risk profile to assert patents in the US. Quite simply, with less NPE’s stepping up to partner with inventors to litigate, inventors are quick to adapt and seek an alternative route – selling directly to industry at lower prices. As more transactions occur, pricing of patent assets will continue to improve. Globally, there is even more opportunity. Germany and China continue to be great forums for patent assertions – for both operating companies and NPEs. The costs of international litigation are far less due to the quicker schedules and limited discovery. So, the threat of litigation will help drive increasing deals for licenses. Further, if and when the Unified Patent Court coalesces, Europe will become a single consumer market for IP purposes, perhaps making it the preferred location to drive patent licensing activities, as such activities, unfortunately, are often tied to litigation programs.

Having practiced for over 25 years, including 16 at Sony, Jaime Siegel is now CEO of Cerebral Assets, LLC, an IP Business Advisory and Global Director of Licensing for the Open Invention Network, one of his clients. Jaime is also the CEO of FlipTix LLC, an early stage tech start-up in the event space, as well as an Adjunct Professor at the UC Irvine School of Law, where he teaches the business of patent licensing and patent litigation.

 

Erich SpangenbergErich Spangenberg
Managing Director, SK14 Advisors

Over the next two years, we will see new transactional models develop that will promote and start to grow the global patent market.

Erich Spangenberg is currently Managing Director of SK14 Advisors. Mr. Spangenberg was also the founder and former CEO of IP Navigation Group, and the founder and former CEO of nXn Partners. Mr. Spangenberg was previously a partner at the prestigious law firm, Jones Day, as well as an investment banking executive at Donaldson, Lufkin & Jenrette.

 

Matt LarsonMatt Larson
Analyst – Tech Litigation
Bloomberg Intelligence

Opportunities remain for IP owners dedicated to deals that add value to their customers’ businesses and are able to enter into long-term cooperative agreements. We are still seeing willingness to license assets that enhance existing businesses or open doors into new fields. This is particularly true where patent licensing is just one component of a larger strategic solutions package, rather than the entire deal itself. Companies focused on patent licensing face significant headwinds, but are finding ways to get deals signed and extract value from their portfolios.

Matt Larson is a Patent Attorney and Technology Litigation Analyst with Bloomberg Intelligence focused on high-tech lawsuits and litigation trends impacting the financial markets.

 

Michael ShoreMichael Shore
Partner, Shore Chan DePumpo LLP

The value now is where Investors can buy high quality patents at a 65% discount, deposit them with a sovereign and instantly see that 65% devaluation come back, an immediate 200% return on investment. Every non-sovereign NPE that does not place its patents with a sovereign to avoid IPRs is being a poor asset manager. The cost is low as compared to the benefits received.

Michael W. Shore practices in the areas of intellectual property commercialization, business litigation, and other select litigation matters. His intellectual property practice is multifaceted, aiding clients in commercializing their patent and copyright portfolios through strategic development, licensing and litigation.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

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There are currently 1 Comment comments. Join the discussion.

  1. Mark Annett November 10, 2017 7:58 am

    The market for patents right now is in blockchain and the decentralized economy. IBM has over 1400 employees in their blockchain group and growing rapidly. The big banks and folks like Master Card are doing everything they can to aquire patent assets in this area because they are scared.

    If companies aren’t moving toward decentralization they are going to be in for a rude awakening as the underlying way that data is managed and transacted changes.

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