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Jan
07

Key Considerations in Patent Monetization

Corporations and individual patent owners alike are more interested than ever in seeking to generate revenue from their patent holdings. That revenue can come in the form of a one-time lump sum payment, a running royalty stream, some combination of both or even some other creative financial structure. Companies both large and small may be willing to license or sell patents in their portfolio that are non-core to their business. Alternatively, a strategic decision may be made to license or sell a patent even if it does cover a core aspect of the ongoing business. In this latter case, the sale or license may be conditioned on a grant-back of license rights and/or other rights such as rights to improvements so as to minimize the impact to the company’s IP position in the context of such a sale or license. In the case of individual patent holders, the sale or license of patent assets may be more of a financial decision with less concern for the operational impact of such a transaction.
There exist a great many professionals that offer patent marketing services with the goal of generating revenue based on patent assets whether the ultimate transaction is a license or sale or some form of hybrid arrangement. These professionals come from a many diverse backgrounds such as patent attorneys, licensing professionals, marketers, business development professionals and technologists. Often, these service providers will comprise a team of individuals with the collective skill sets which are desirable in achieving the best result.
It is very difficult to determine a strict value for a particular patent or a portfolio given the many variables that go into the determination. In the end and in the context of a non-litigious business transaction, the patent or portfolio is only worth what a willing buyer will pay for the relevant patent assets. That being said, there are some key indicators that are important in assessing potential value of a patent portfolio. For example, one key factor is the scope of potential infringement (current, present and expected future) in the market. Another important factor is the inherent strength of the patent or set of patents. This includes, for example, the breadth and clarity of the claims as well as the extent and clarity of the disclosure in the patent. Patent strength is also dependent upon the prior art (of record and not of record) as that prior art applies to the issued claim set. An often overlooked factor in assessing potential value of a patent portfolio is the condition of the patent sale and purchase market at the time of the marketing. If there are many buyers at the specific time, then the portfolio is likely to fetch a higher price than if buyers are not relatively active, particularly if they are not currently active in the technology area represented by the portfolio.
There are many other factors that impact the ultimate expected sale price or license revenue which can be generated from a patent portfolio. If you or your company are interested in potentially unlocking the value of patent assets, then the best course of action is to locate a reputable patent monetization expert and ask for an assessment of your portfolio. In almost all cases, this can be done without charge and the expert should be able to provide a general idea of expected value and potential for a sale or successful licensing program. Some of these experts will market portfolios at no cost to the owner in return for a success based portion of the proceeds generated through the marketing of the assets.

About the author

Chuck Lobsenz

Chuck Lobsenz has particular expertise in intellectual property/patent matters and in structuring/negotiating and closing complex technology arrangements particularly in the telecommunications and software industries. Prior to joining Symbus, Mr. Lobsenz was the General Counsel at Virtustream, Inc., a cloud services and software provider. While there, he was responsible for managing the legal team as well as handling all legal matters affecting the company. Mr. Lobsenz has also held the position of Associate General Counsel – Intellectual Property at Clearwire Corporation, a publicly traded provider of fourth generation wireless voice and data services. At Clearwire, Mr. Lobsenz had responsibility for managing all intellectual property matters for the company as well as providing legal support for many of the company’s key commercial transactions. While at Clearwire, he designed and implemented a highly successful intellectual property asset management (IPAM) program resulting in a substantial and strategic set of patent assets for the company. In addition, Mr. Lobsenz negotiated and closed a multitude of complex deals such as joint ventures, new sales channel relationships, technology development arrangements, multi-billion dollar telecommunications equipment acquisitions as well as numerous other deals with companies such as Google, Intel, Motorola, Samsung, Microsoft, and Cisco. Prior to Clearwire, he spent many years in the private practice of law, working with a number of highly respected national law firms including Hunton & Williams and Baker & Botts. Chuck began his legal career at IBM. Prior to law school, he worked as a semiconductor design engineer for Texas Instruments as well as a software engineer for Honeywell Aerospace.