Is the Consensual Patent Market a Pipe Dream? We don’t think so.


 

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A “patent marketplace” is a theoretical open and transparent environment for the fair exchange of patent rights. Today, this remains a pipe dream – patent litigation and threat-based monetization of patent rights continues to be a norm. The remainder of assets go largely ignored.

Decrying the system as “broken” is common among those practicing in this space. Less than 5% of patents are ever commercialized. Patent holders from small organizations spend tens of thousands of dollar procuring patent rights, and for what? Showing investors that there is a value in the company? Protection against larger companies? Freedom to operate in a particular industry? Proof that the invention is novel and of value? Perhaps, all of the above, but none of this can be done well without a good, strong strategy in place.

To make a patent strategy “work” for the organization, we recommend the following steps:

  1. File provisionals early and often. A pro se filing costs $130 for small entities, and gives you a year to figure out how you want to invest in the asset. Using ClearAccessIP’s Invention Disclosure repo is an easy want to get a provisional structured for filing.
  2. Decide what your goal for the invention portfolio is by segmenting it into strategic categories:
    • Strategic pledging to partners and research communities using IPDealRoom can  build good will and open up collaboration opportunities. It is a great stimulus for innovation.
    • A licensing strategy organized by the size of the licensor (i.e. Fortune 500 license options, versus a start-up license option). This allows you to reach a larger group with a license rate designed to be a high ROI for the licensee.
    • Working within an industry coalition to pool and cross-license. This allows parties to exchange patents on a quid pro quo basis before these assets end up in litigation.
    • Outlining a defensive or offensive strategy against competitors: identifying who those competitors are, and understanding how their product offering compares to your portfolio.
  3. Maintain your strategic mapping so that every asset, even early provisionals, has a timeline that aligns this asset with the natural evolution of the technology.

A comprehensive and dynamic patent strategy doesn’t have to be complicated or expensive. Bringing IP strategy into the C-suite can be easy and cost effective with the right tools and the right advocates. There are decisions that are made in exposing and framing IP that can change the nature of how a company positions itself to the public. Companies that have adopted successful patent pledges include Tesla, IBM, Microsoft, Cisco, Facebook and Google. Companies with robust licensing strategies include Texas Instruments, HP, and Intel. The future holds promise that any patent holding entity, including universities, SMEs and start-ups can adopt equally effective strategies as large corporations.

As more and more organizations begin to think holistically about IP strategy and exposing it for strategic purposes, we will see the framework for a viable patent market begin to form.

For more information about the consensual transactions market, we recommend the following papers:

On Patent Pledges: see the work of Jorge Contreras

On Licensing: Colleen Chien and Michael Kasdan 

For information on ClearAccessIP’s products and services, please contact catherine@clearaccessip.com.