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...
ANY CHARACTER HERE
There's a little article over on the New York times about potential buyers renewing their interest in Yahoo. The company's investments in the Chinese e-commerce group Alibaba as well as its 35% stake in Yahoo Japan are often seen as potentially valuable assets. Indeed an investment group has already begun a USD 1.6 billion tender offer for shares in Alibaba (see here) which would value the company at USD 32 billion and Yahoo's stake at around USD 13 billion.
Nobody has yet focussed on the IP rights in Yahoo. ThomsonInnovation are today recording 3051 individual patent families and currently 657 granted US patents - as well as a huge number of patent applications currently in process. The range of patent rights is fairly wide and a brief review shows that it covers many aspects of Internet technology. This author has not yet reviewed the portfolio in any detail, but given the volume of the portfolio, it would be surprising if there was not at least some golden nuggets in the bag.
The recent Google/Motorola Mobility and Nortel deals showed the value of patents in the telecommunications sector. Much of their value has been due to the development of standards using patent technology. This has been encouraged by the telecommunications standards bodies who accept that stakeholders in the standards development process want to receive rewards based on licensing of their patents. On the other hand the Internet community has been much more reluctant to adopt standards on patent technology requiring payment of licenses. There's still nothing to stop a company from patenting its technology, but the W3 consortium wants to see royalty-free licenses as its patent policy clearly states. This means that patents may have a lower value than otherwise (as there is no mechanism to obtain royalties).
