is a Managing Principal of the Soryn IP Group and Soryn Capital. He is an inventor with over 200 issued patents and nearly 200 pending patent applications. His inventions have been licensed to every major cellular OEM. He teaches IP workshops in the NYC startup community. He is also the author of the popular book “Patents. Simplified.” Fatih has his PhD from the University of Massachusetts, and his MBA from the Wharton School.
Patent monetization has become nearly impossible for middle-market technology companies without engaging in some level of legal action. Management teams have consequently shied away from pursuing licensing opportunities, even when the revenue potential of a company’s intellectual property is compelling. While traditional debt and equity investors have an aversion to patent monetization stories, there are specialized investors willing to underwrite capital raises aimed at financing licensing revenue initiatives. By structuring these financings in a way that isolates monetization risk to the patent investor, companies can pursue licensing initiatives that have the potential to generate significant residual value for all stakeholders in the capital stack. In addition to capital, patent investors bring monetization expertise that can play a critical role in the success of a licensing revenue strategy… In many contexts, licensing revenues will only persist so long as the underlying patents remain valid. Increasingly, however, licensees and strategic third parties seek to invalidate patents in Inter Partes Review, rather than continue to pay or renew patent licenses. The uncertainty of future revenue streams further justifies financing structures that ameliorate such risk.
There are a few things that we notice when we look at the patent portfolios originated from the universities. There is no rule that applies to every single university but there are definitely trends that one can spot quickly. For example, universities tend not to file many continuation applications, and instead let patent applications issue out. When the only patent application in the family issues, the prosecution is closed, and there is no ability to file continuation applications. We also don’t see enough attention to portfolio pruning as a way of containing cost. Universities engage in very early stage research, which is speculative by its nature, and therefore many patent applications are filed on technologies that do not turn out to have significant economic value later on. This is a very good recipe for accumulating patents with little or no value.
This bill has elements that can be part of an ultimate solution, however it cannot escape being a rubber stamp for a viewpoint that sees intellectual property rights as nuisance rather than a principal cog in the American invention machine. Unfortunately, if the Congress moves forward and ratifies this bill in the form proposed, it will create more problems than the one it is solving.
How many patent applications has your company filed today? If you are a typical new economy small tech company with software and internet centric technology or products, the number of patent applications your company filed today is probably zero. Of course filing and prosecuting patent applications is not cheap and that’s part of the explanation. However it is worth noting that most of the successful companies with software-heavy products, including those in the list above, have been filing patent applications from their very early days.