Patent Monetization Market Progress

upanddown-arrowsFeedback from the recent IP Dealmakers Conference in New York highlights several hopeful insights into the current status of patent monetization markets worldwide.

1. Trade secrets are growing in value for three reasons: They generate immediate benefit to companies as they sell products and services; they are not subject to government approval; and they can be protected and used competitively without government review.

2. Patent enforcement is shifting to Germany and China. Here China is the surprise and they have strengthened their patent enforcement system. There, plaintiffs win 75% of the cases and foreign patent owners are gaining an advantage in enforcement although it is not clear why. In addition, China is changing its damages model to allow plaintiffs to state the damage they believe they have suffered and force the defendant to dispute the amount. Given this information, a solid strategy would be to file in the US, Germany and China and prepare to enforce in Germany and China for faster and lower cost results.

3. IPRs and the US Federal Circuit are beginning to balance out. IPRs were killing 90% of the patents submitted and that number has now slipped to 60%. The US Federal Circuit appears to be walking back from the brink of invalidating all software patents. Recent developments show judges ruling in favor of the eligibility of software related inventions.

4. The new Trump Administration has been silent on patent issues. Trump will be appointing a new head of the USPTO and the Trump Administration has not signaled an interest in further patent reform.

I have written earlier about rising brokerage transaction prices and recent data shows the trend continuing. Given that, the outlook for patent sales in 2017 should be an improvement over 2016. As a patent and technology broker, I believe that the sweet spot is now the combined sale of technology, development team, trade secrets and patents. This takes advantage of the rise in trade secrets, gives companies and immediate competitive advantage, and supports higher prices from the sale of the assets over a pure patent transaction.

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