Mr. Richardson will present findings and projections on the brokered and secondary patent market including who is buying/selling patents, how much are they are paying, what technologies are hot, and what are the trends. Mr. Richardson is a partner in the Richardson Oliver Law Group (ROL Group) and for the past five years has published widely read patent sales reports for Bloomberg and IAM Magazine. The ROL Group tracks pricing, technology areas, buyers, and sellers for over 4,000 deals covering 95,000 patent assets across.
Secondary Patent Market: Buyers, Sellers, Pricing and Trends
1. Business Sense • IP MattersBusiness Sense • IP Matters 1
Secondary Patent Market:
Buyers, Sellers, Pricing, and
Trends
Kent Richardson
SVIPLA – May 23, 2017
Contact Information:
+1 (650) 967-6555
kent@richardsonoliver.com
Copyright 2017 ROL
5. Business Sense • IP Matters
LinkedIn – What You Can Do Over Four Years
2011 2016
5
0
500
1000
1500
2000
2500
# of Assets
Portfolio Growth by Priority Year
Organic Portfolio Projected Organic Portfolio
0
500
1000
1500
2000
2500
# Assets
Total Portfolio by Priority Year
Acquired Portfolio Organic Portfolio
Copyright 2017 ROL
11. Business Sense • IP Matters
How Big Is the Patent Market?
11
$0
$2
$4
$6
$8
$10
$12
$14
2011-Q1 2012-Q1 2013-Q1 2014-Q1 2015-Q1 2016-Q1 2017-Q1
ROL Group Tracked Brokered and Private Market
Cumulative Sum ($B)
Cum Sum Asking Price (Entire Market)
Cum Sum Total Asking Price (Sold)
Predicted Cum Sum Asking Price (Entire Market)
Predicted Cum Sum Total Asking Price (Sold)
$11 billion plus in patent packages
90 thousand plus patent assets
100 technology categories
Copyright 2017 ROL
18. Business Sense • IP Matters
0%
5%
10%
15%
20%
25%
30%
35%
40%
2012 2013 2014 2015 2016
Sales Rate
Listing Year
Projected Sales Rate by Listing Year
Sales Rates Dropping or Shifting?
% Sold by Year Listed – Bad Trend % Sold as % Listed Per Year – OK?
18
0%
5%
10%
15%
20%
25%
2012 2013 2014 2015 2016
Year
Sales in Calendar Year as % of Listings in
Calendar Year
Copyright 2017 ROL
27. Business Sense • IP Matters
Litigation Analysis: You Can Model Your Risk
Has Litigation Has IPR
Package Type Prior to
listing date
After listing
date
Prior to
listing date
After listing
date
Sold packages 5.4% 10.2% 0.0% 3.0%
All packages 3.8% 3.5% 0.0% 1.4%
27
10.2% of sold packages are litigated – time to update models?
Both sold and unsold packages are litigated post listing
Defensive aggregator value may be greater than anticipated
Copyright 2017 ROL
31. Business Sense • IP Matters Copyright 2015 ROL 31
BUSINESS SENSE • IP MATTERS
ROL Group has over 60 years of IP strategy and execution
experience. We ask the business questions first. We
blend in-house and large law firm experience to create
clear steps for success.
We guide companies through unique IP challenges—like
buying and selling patents, developing licensing
programs, defending against patent assertions, and
creating a value-driven IP portfolio. We give direction to
businesses that share our passion for new ideas, creative
problem solving and forward motion.
Contact Information:
+1 (650) 967-6555
kent@richardsonoliver.com
Copyright 2017 ROL
33. Business Sense • IP Matters
Operational Challenges of Patent Buying
• Too many potential deals (more than 500 per year, ~8K assets)
• Too few deals that will meet your needs
• 1-2% of the deals have the potential to meet your needs
• Looks like a corporate development or VC problem
Problems of abundance and scarcity
• Define success in an actionable way. Define business driven criteria that
automatically eliminates undesirable patents
• Prioritize low cost/high impact diligence first
• Work with Finance to budget and model your program
• Sell your program internally
• Building the community relationships with the brokers and sellers
• Tag and track your deals. Allows you to analyze your program and reduces
duplicate work
• Where problems in otherwise good patents are identified, find answers
• Accept that you will miss some deals
Best practices for patent buying
33Copyright 2017 ROL
39. Business Sense • IP Matters
0
200
400
600
800
1000
1200
1400
Pre-2012 2016
Portfolio
Internal Purchased
?
LinkedIn’s Patent Strategy Planning and
Execution
• Ecosystem risk analysis
• Identify target organic patent
development and patent purchase
technology areas
• Develop budgets and authorization
process
Planning
• Substantial increase in organic filings
• Directed patent purchasing program
to fill in gaps in LinkedIn’s counter-
assertion portfolio
• Ongoing continuation practice of
current portfolio
Execution
39Copyright 2017 ROL
42. Business Sense • IP Matters
0
200
400
600
800
1000
1200
1400
Pre-2012 2016
Portfolio
Internal Purchased
LinkedIn’s Patent Strategy Actuals
•Growth of >1000% increase in new filings versus
pre-2012
•Idea harvesting sessions increased
•Internal evangelizing
•Inventor recognition increase
•Internal capabilities for managing the flow of
new inventions and new filings
Organic patent
•More than 910 patents purchased
•Strategic purchases
•Failed high profile startups
•Brokered patent market
•Private corporate sellers
•Bulk purchases
•Large purchases from select corporate sellers
Patent purchases
42Copyright 2017 ROL