Brokered Patent Market

The 2019 Brokered Patent Market Report is Now Available

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Our full 2019 Brokered Market Report is now available for download here. Download and learn the latest about the brokered patent market. Key take-aways include:

  • The average asking price of a US patent was $280,000, up from last year
  • 48% of all transacted deals in 2019 were bought by NPEs
  • $300 million worth of brokered deals closed in 2019

“ROI’s brokered patent market report continues to be one of the year’s most read and anticipated pieces amongst IAM’s subscriber base of global IP executives and professionals” – Joff Wild, Editor in Chief of IAM

This article first appeared in IAM Winter, published by Law Business Research – IP Division. To view the issue in full, please go to www.IAM-media.com.

“The 2019 Brokered Patent Market.” Richardson et. al. IAM Magazine (Jan 2020).

Our 2019 Brokered Market Report is available for free download here.

“Brokered Patents Are Not Junk—and the Reasons Will Surprise You.” Ågren et. al. IPWatchdog (January 2019)

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Occasionally, we hear people say, “brokered patents are all junk.” This begs the question, “are operating companies and non-practicing entities (NPEs) spending hundreds of millions of dollars buying junk patents?” Luckily, the short answer is no. We know clients have successfully bought and used brokered patents to substantially alter their licensing and litigation posture at a lower cost than the alternatives. We also know that patents on the brokered market rank higher than average patents (See “Finding the Best Patents — Forward Citation Analysis Still Wins”, by Oliver, et al.). So why this disconnect? We are victims of our own cognitive biases and the behavioral economic traps that make it harder for buyers to find and buy patents.

 “Brokered Patents Are Not Junk—and the Reasons Will Surprise You.” Ågren et. al. IPWatchdog (January 2019), here. 

Bloomberg/BNA Publishes First Quarterly Brokered Patent Market Data Report

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Bloomberg/BNA has begun publishing the ROL Group data on the brokered patent market. This information brings much needed transparency to the market for buying and selling patents and we are glad to be able to help.

“Companies such as Panasonic Corp., Intel Corp., Huawei Technologies Co. Ltd. and Korea Telecom used the brokered patent market to adjust their patent portfolios in the first quarter of the year, according to data provided to Bloomberg BNA by Richardson Oliver Law Group LLP.

The brokered market comprises just a small portion of the overall market for patent sales between companies, but it can offer insights into broader trends.The number of assets available in the market received a boost in the first quarter. Patent brokers listed over 6,000 new assets, double the nearly 3,000 listed in the previous quarter.However, those assets were offered as a smaller number of larger packages of patents. The number of packages listed dropped to 164 from 272….”

Intellectual Ventures is Buying Again

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IV’s new fund bought 16% of all the packages sold in the first half of 2014. As a follow up to our article “What’s Inside IV’s Patent Portfolio?” we examined Intellectual Venture’s recent buying practices, and in particular, buying for their new fund. We found 14 recorded assignments to III Holdings 1, LLC; this is IV’s new Intellectual Investment Fund 3 (IIF3). Although there has been speculation in the broader community about whether IIF3 is funded, we believe that these assignments are public evidence of funds committed from IIF3.

At the ROL Group we perform quarterly analysis on patent packages offered for sale on the open market. We saw a significant number of packages purchased by III Holdings 1, LLC. RPX has identified this III Holdings 1, LLC as an NPE entity. III Holdings 1, LLC could not be found as a litigant in any patent litigation. However, we have confirmed that this is a holding company for Intellectual Ventures’ IIF3 buying.

Using assignment data from the USPTO website to identify sales, our Q1 review identified 35 package sales and our Q2 review identified 50 package sales.  Of these, III Holdings 1, LLC was the assignee on 5 (15%) of the sales identified in Q1 and 9 (18%) of the sales identified in Q2. The details of the packages are as follows:

As for the money IV spent on these assets, an approximation can be made by scaling down the expected sale price to 65% of the asking price, as described in “The Brokered Patent Market”. Using this method, $4.39M of IV spend was identified in the Q1 review and $8.06M in the Q2 review for a total spent of $12.45M. Not anywhere as high as past years, but IV is buying in IIF3.

Using the actual assignment dates, the following histogram represents IV’s estimated spend per month on open market patent deals in IFF3 since the first confirmed assignment.

Importantly, IV is successful at buying at the low end of the market so the estimated total spend may be high. The flip side, is that private purchases are not reflected above, if private purchases were included IIF3 spending would be higher.