Posts Tagged: "IP Business Models"

At the very beginning of the program Siegel, during his opening remarks, said: “At Acacia we are not in the litigation business, we are in the licensing business.” I know that many will shrug or laugh at the comment, but from what I know about Acacia if you care to dig underneath the surface and listen past the sound byte it is true. Siegel explained that there are real costs and real risks associated with litigation, so doing business together and licensing is always a preferable strategy. Of course, Siegel pointed out that there is still a reluctance by many entities to pay for intellectual property. Siegel is exactly correct. There are many companies, large companies who themselves are owners of very large patent portfolios, who are reluctant to pay for intellectual property rights even though they infringe. Somewhere along the way it seems that the narrative got away from the innovator and has been turned on its head.

Individual inventors and corporate IP owners are used to dealing with accountants, lawyers and investment advisors – all professionals who are governed by state and/or federal professional regulations, and/or national association guidelines. Well, the question I pose is: What professional regulations govern the qualifications and conduct of all these IP middlemen? The short answer to the above question is “none!” After all, there is no IP brokerage or IP middlemen governing body.

The latest statistics show that the cumulative value of U.S. intellectual property is approximately $5.8 trillion (or 48.4% of GDP), and each year over half a million patent applications are filed, over a quarter million patents are issued, over 4000 patent infringement suits are filed and IP verdicts total over $4.6 billion with a median patent damage award of approximately $4 million. Against this backdrop, I now present an updated taxonomy containing 19 IP-related business models. The business models are in addition to the “traditional” operating companies and their “traditional” IP law firms. Further, while not pretending to be all-inclusive, a directory of players implementing one or more of these 19 IP business models is available for download at the end of this post.