Tuesday, September 6, 2011

Close-up on the current patent monetization landscape

The number of companies dealing with IP rights and patents is in constant increase and they all follow a specific business strategy in order to yield profit. Given the importance now taken by patents in the strategy of all IT firms as well as the ever-growing media attention to the subject, it is becoming increasingly difficult to understand all the strategies employed by such companies and to recognize the most successful ones, i.e. the ones "achieving higher returns on patents by extracting direct profits or providing defensive leverage."

This thorny issue is however the delight of many IP strategists and Bruce Berman of NY-based consulting firm Brody Berman Associates is one of them. In a post entitled "innovative IP Models Generate Cash, Provide Alternatives" on his weblog IP Closeup (formerly known as IP insider), Bruce has been developing a graphic model explaining the current patent monetization landscape in collaboration with the IP Investment Group at Coller Captial, a London-based private equity firm and one the of the leading independent patent holders.



As Bruce explains it: "the graph examines the relative size of these patent holders, whether they use their own patents or acquire them (or both), and how aggressive or defensive their strategy". For those keen on debating about the patent troll phenomenom, Bruce points out interestingly that "in this increasingly crowded and still evolving landscape few holders fit the same business mold, and only some can be considered outright “trolls.” The analysis shows that there are some entities that never sue, others that do so occasionally, and still others that are almost entirely about litigation."

Look out for Bruce's upcoming column in the September edition of IAM magazine called "The Intangible Investor", where his model will be explained in details, so as to demonstrate that many operating companies can monetize their patent as successfully as non-practising entities: " Defraying costs associated with R&D, prosecution, PTO filings and litigation through a rights sale, purchase or partnership can provide valuable efficiencies and increase ROI, without necessarily increasing the risk of litigation or having to sue customers or vendors.”


...and for those who prefer fairytales, here is something for you too...
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