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IP, IP Asset, Patent

Patent Monetization – What, Who and How

I’m on the road this morning, and will be giving a lecture tomorrow on the basics of Patent Monetization to the Toledo Intellectual Property Law Association Spring Seminar. I’d like to publicly thank TIPLA President Ray Meiers of Emerson Thomson Bennett for inviting me to speak.  More information about the Spring Seminar is available from the TIPLA website here.

Also speaking will be Sam S. Han, Ph.D, J.D. from the University of Dayton and John F. Marsh of Hahn Loeser & Parks, LLC.  Sam will cover issues of substance abuse, while John will discuss significant developments in trade secret law.

Naturally, my lecture will cover (1) the purpose of patent monetization, as well as some of the reasons monetization comes into play for patent owners; (2) the identity of some of the players that exist primarily to assist patent owners with turning their patents into cash; and (3) how the monetization process works, both in traditional and non-traditional models.

What is monetization?

Contrary to popular belief, companies and inventors do not file patent applications solely for purposes of litigation.  Nevertheless, because (aside from the ITC) only a federal court may adjudicate patent liability issues, litigation is inextricably part of any effective patent monetization strategy. Granted, this is hardly news.  Investment in patent monetization involving litigation strategies has existed for over 150 years.  What’s more, large companies that, by their very nature, aggregate patented components into the products they sell, demonstrate striking similarities to companies in centuries past.

Who are the patent monetizers?

So who can help turn your patent into cash?  There are a number of aggregators, advisory services and financial institutions all focused on patents as an asset in themselves. These companies see patents as an asset that can be exploited to generate revenue. Some offer advisory services, including litigation support to negotiate patent licenses, others simply purchase patents outright.  Brokers and other intermediaries are also discussed in the full presentation, embedded below.

How is it done?

A number of business models are discussed, including offensive acquisition, exclusive agency and contingent advisory services.  These models include very little, if any, advanced cash, with most of the patent owner’s revenue generated through licensing services.  In addition, some non-traditional models include Intellectual Venture’s mass aggregation strategy, RPX’s defensive purchases, and the covenant not to sue (CNS) auctions.

The Toledo The seminar will take place at 8:00 AM on Wednesday, March 7, 2012 at The University of Toledo, College of Law Auditorium.

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