Posts Tagged: "non-practicing entities"

Reflections on the 2018 Patent Market

Despite falling average prices, in 2018, the patent market grew fast. We estimate the 2018 market size to be $353 million, up from last year’s estimated $296 million. The 2016 market slump (estimated $165 million market) is, hopefully, a thing of the past. In order to make this estimate, we use the observed sales that occurred in the 2018 market year and used their actual asking prices to determine the market size. As is consistent with the previous two years, if no pricing guidance was provided, the average asking price per asset for the market year of the sale (eg $123,000 for 2018 market year sales), was multiplied by the number of assets to determine the expected asking price. In the 2018 market year, 210 sales were identified, accounting for a total asking price of $527 million. Due to recordation delays, we assume that we have not yet seen 3% of the sales that occurred in the timeframe, so we multiplied this total asking price by 1.03 before applying our standard 35% discount between asking price and expected selling price. Thus, our expected total market size for the 2018 market is $353 million, indicating that the market has increased by 19% since last year and 114% since the 2016 market.

Why Non-Practicing Entities (NPEs) Are Good For China

In the U.S., the risks of frivolous patent lawsuits is greater because the merits are decided by a group of jurors who lack patent expertise and can incorrectly conclude that a patent is infringed. In China, however, these inefficiencies and imbalances do not exist. The specialized intellectual property courts and tribunals in China are equipped with specialized judges who are able to quickly and accurately identify frivolous lawsuits. Because there is no discovery process and a decision on the merits can often be achieved within one year, the abusive tactics employed by patent trolls in the U.S. can be avoided in China.

Patent Encumbrances Can Reduce Market Value up to 100 Percent

Patent broker Brad Close notes that encumbrances can have the effect of reducing a patent’s value by up to 100 percent, practically rendering a patent valueless on the market. “If the only companies which are potential targets for a license are already licensed, then the intellectual property is essentially worthless,” Close said. “If a startup is considering entering into an agreement that would place an encumbrance upon a patent, I would advise them to be very sure that what they’re receiving in return offers adequate value and to take into consideration both their investors and the future of the business,” Close said.

Facebook patent infringement suit against BlackBerry looks remarkably patent troll-like

Facebook is asserting a series of patents the company has acquired from other firms, making its actions similar to those of non-practicing entities (NPEs) and remarkably patent troll-like. After all, we have been told time and time again by those who have advocated for patent reform and a systematic dismantling of the patent system that a telltale sign of a truly bad actor like a patent troll is that the patents were not the subject of homegrown innovation, but were rather acquired from true innovators and then used to sue others. That, however, is precisely what Facebook is doing here. 

Tech Giants Lead the Way on Fintech Patents, Ahead of Banks

British patent data insights firm Cipher recently released an IP strategy report that provides a look at how many firms are patenting technologies in the hopes of disrupting various industry sectors. Among the various highlights of the report include a look at fintech patents, which shows that tech companies and not banks are leading the way in obtaining patents that cover the future of banking.