Posts Tagged: "ip financing"

On the penultimate day of IPWatchdog’s CON2020, a session titled “The Future of Monetization” featured a panel of experts discussing how the changing patent policy landscape in the United States continues to alter business models and monetization strategies for associated patents worldwide. The panelists discussed what the future of patent monetization looks like and factors influencing expectations of success. Gene Quinn
, President & CEO of IPWatchdog, Inc., asked each panelist their viewpoint on whether monetization of patents is getting better, worse, or staying the same. Daniel Papst, Managing Director and Co-Owner of Papst Licensing GmbH & Co., said that he is hopeful things will become better in the future.  “The most dire times are behind us; it looks like the market is filled with more liquidity. There have always been portfolios out there that appear to be worth monetizing, and the courts, especially in the U.S., seem to be getting a little more rational again.”

RUSS KRAJEC: The startup company has an exclusive license, so they have full control of the asset, and they have a buyout option that can be exercised at any time. And the buyout cost is reasonable, is predictable, and it’s known ahead of time. So from them, it is purely a matter of financing while the startup company has excruciatingly high cost of capital. Angel or venture money averages 30, 40, 50 percent per year. Our financing is much lower than that, it’s a better use of capital. If at some point in the future, the company may be able to get a bank loan where the cost of capital is much cheaper, and it makes sense to exercise the buyout option. The patent financing is purely an analysis of Net Present Value in these scenarios.

BlueIron’s non-dilutive financing for startups pays all of the patent costs, including filing fees and attorney’s fees, using a conventional commercial “lease-back” arrangement. This model has been gaining traction since its first release in the fall of 2014. After financing professional poker player Phil Gordon’s patent for his new software startup, Chatbox, BlueIron has made investments in startup companies in software, hardware, biotechnology, medical devices, financial services, and agriculture.

Abha Divine is the founder and managing director of Techquity Capital Management, which is an IP investment firm that partners with IP owners to help them deploy their assets into untapped markets to broaden their reach and increase liquidity.We discussed the changing IP investment landscape and deals used to focus nearly exclusively on the number of patents transacted. Of course, that changed in the wake of recent substantive patent law changes. The focus of deals, at least those that were being done over the past few years, was quality. But now we are starting to see the marketplace value quantity again, but not at the expense of quality.