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It's not only in the UK where service providers are enjoying themselves. In the US, IPotential has issued a press release to announce that the company’s patent brokerage business raised $104 million from a total of 29 transactions during 2007. Clearly, the company’s July performance – announced in a previous press release – was no flash in the pan.
"Our results demonstrate that patent owners – investors, corporations and individuals – are now able to obtain significant monetary value from the sale of their patents and applications, and that they are no longer left with the unfortunate choice of having to either assert their patents or let the value of their patents go to waste,” says the company’s president and COO Joe Chernesky.
And he is absolutely correct. In the last couple of years, the straight sale of IP rights has become far more popular. Selling is relatively quick and pretty simple, and once a patent portfolio is gone, that’s it - you have no more responsibility for it, no issues about monitoring licensing payments and, if the contract has been properly drawn up, the purchaser has no come back. Subscribers to IAM can read an article from Motorola in the current issue explaining why a patent divestiture programme is an attractive option. I expect to see many other companies developing something similar. We will also hear a lot more about patent exchanges, such as the Open IP Market.
Although IPotential goes public with its results, it does its work in private. Another way of raising money through patent sales is much more public though, and that is patent auctions. These also have their merits – notably their speed and transparency – but I can’t help noticing that in one year IPotential has raised more than double what Ocean Tomo has raised since it began holding its auctions a couple of years ago. It’s horses for courses I guess. The cleverest companies will use every kind of selling means available depending on what they are looking to dispose of and why; and probably just as important - to whom.
The contrast between IPotential and Ocean Tomo results supports the contention that high quality bespoke IP assets are best sold through private sales. Ocean Tomo's cost structure is on the high end for the types of assets that will drfit to their auction market. Eventually, Ocean Tomo or one of the many budding competitors will develop a lower cost electronic trading platform that will, ironically, deliver the value proposition offered once by The Patent & License Exchange (pl-x.com).Nir Kossovsky, Steel City Re on 20 Feb 2008