Posts Tagged: "patent sales"

More Patent Packages Sold in 2018 Than Any Other Market Year

When discussing potential patent purchases with buyers, we continue our push to end the use of the phrase “low quality” to broadly characterize rejected patents. We often hear that there are junk, low quality or weak patents on the patent market. Clearly, there are some patents that we can objectively agree are low quality, just as there are in most portfolios. However, buyers with an efficient buying program should never test the majority of patents for “quality” metrics (e.g. enforceability) because these tests are simply too expensive. Sophisticated buyers create targeted buying programs rather than general ones. When buying, you should have a use case in mind and analyze the value of the patents in that particular context. If you want patents to counter assert against Qualcomm, do not waste time and money evaluating clean energy patents. The “quality” of anything in that technology area is irrelevant. Buyers also tend to conflate quality and value when discussing packages. A package with no value to you for your particular business use should be rejected from your buying program, but again, this is not a comment on the quality. It is easier and cheaper to reject a patent for lack of value that to analyze it for quality. Necessarily, a well-run buying program has visibility into only a small set of the available packages on the market; for the rest of the packages, the program should have no visibility into the quality of the packages because the packages were rejected before any quality metrics were evaluated.

Three Outstanding IP Deals of 2017

These IP deals were not necessarily selected for their size, but for their indicative nature of a set of circumstances that exist in current markets that made these deals not only possible, but essential… The three trends highlighted by these patent deals: acquisitions by foreign buyers, Unicorns and other well-funded startups looking for assets, and various strategies to avoid the burden imposed by the PTAB, are likely to continue well into 2018. None of these deals would have been entered into if the parties involved did not deem U.S. patents valuable and critical for their relative business, and that is one positive message that all of us involved in the IP marketplace can take with us into the new year.

Patent Sales Rates Decreased in 2016, but Patent Market Remains Viable and Robust

Though patent sales rates have decreased in 2016, the patent market remains viable and robust. We continue to see a trend in the increased speed at which packages sell (over 50% are sold within four months) as well as an increased sales premium for packages with Evidence of Use (EOU) — a 27% price boost. 2016 also saw a rise in sales rates from larger patent packages; its highest sales rates were from packages with between 11 and 25 assets, an increase in package size from 2015, which counted its highest sales rates from packages with six to 10 assets.

2016 Patent Market Report: Overview

After five years of analyzing and reporting on the patent market, the only constant appears to be change. Although asking prices have stabilized, sales are down, bringing the value of the brokered market down to $165 million from $233 million last year. However, the launch of both IAM Market and the Industry Patent Purchase Program (IP3) has introduced new buying opportunities. At the same time, the impact of negative patent decisions is becoming apparent as non-practicing entities (NPEs) pull back from the market. For the first time, purchases by corporations have exceeded NPE purchases. Even the biggest NPEs have been affected, with RPX succeeding Intellectual Ventures (IV) as the new buying leader. Further, the data shows that the US Supreme Court’s decision in Alice has crushed much of the nascent financial technology (fintech) patent market and affected software package sales rates. Finally, we received better litigation data this year and it appears that the litigation risk from sold patents is much higher than previously reported – you may want to reconsider your risk models and membership of defensive aggregators.

Benefit of the Secondary Patent Market to Startups

The validity of secondary markets for a variety of goods and services is never questioned. Securities are sold and resold many times after their initial offering, homes and buildings and built and resold many times, as are automobiles. A quick review of the products listed an eBay leaves little doubt that a robust secondary market exists for many goods and services across the American economy. However, not everyone is in agreement that a secondary patent market is beneficial. For some reason, many people villainize companies that practice patent licensing. Even resorting to the use of pejorative terms such as “patent troll” to describe these businesses. These detractors fail to account for the fact that inventors may not be the most efficient licensors. In addition, they don’t take into account that, just as a builder generates revenue to build more buildings by selling their current ones, companies that sell or license patents help fund further R&D with the proceeds.