Potential clients frequently ask if they can successfully sell or license their patents; unfortunately, the answer is, far more often than not, “no.” Be it a cultural construct of “inventor exceptionalism,” repeated viewing of late-night infomercials by folks who like to tinker, or lazy journalism that elevates human interest stories about successful inventors over a deep explanation of the realities of generating business success, there exists a belief that “if you build a better mousetrap, the world will beat a path to your door.” The truth is that the only person who is guaranteed to make money from a patent is the patent professional that the client hires to get the work done for them.
This topic is on my mind because I had to, once again, give bad news to someone who was expecting to monetize his patent rights that he believed
Why You (Probably) Can’t Sell or License Your Patent
Hey “Patent Experts”: How Do You Like Groupon’s Patent Now? *Crickets*
Yesterday's announcement of the firing of Groupon's CEO and the hope for a rebirth of the company's business model brought to mind a post that I wrote a couple of years ago railing against the self-interested opinions of "patent experts" on why Google offered $6 Billion for Groupon in late 2010. Re-reading the post in the rear-view mirror, it is more clear than ever that Google made the offer for the precise reason I set out below in December 2010:
Google, and other acquirers, buy business models, not patents. As we strategy-focused IP people have been saying for years, a patent is worthless unless it covers a viable business model–either yours or one you want to own. Google is interested in Groupon because it offers them an established business model in an area that fits into their long term business strategy. Are the patents nice to have? Of course,
Success at Open Innovation Requires Finding the Right Partners: Here’s How to Improve Your Success Rates
With more companies building open innovation into their product development platforms, there would appear to be increasing opportunities for companies and independent IP owners to sell or license their technology. In my many conversations with corporate innovation professionals, I find that that the desire to in-source externally developed products and technology may be strong, but few know how to go about finding and acquiring what their companies need. As I have written about before, developing fruitful open innovation relationships is very much like dating: you may want to do so, but unless you know where to show up, and how to initiate conversation, chances are you will remain single for a long time unless you engage a matchmaker. Well, I guess you could be your own "matchmaker" and search for potential partners. This is easier today than it used to be because many corporations have idea submission portals and a
Want to Know More about IP Strategy? A Selection of Posts for In-House and Outside Counsel
This week, I am speaking at the Midwest IP Institute. I will be participating in a "fire side chat" with my good friend, Edna Vassilovski of Stoel, Rives LLP. Our session is entitled "How Patent Prosecutors and In-House Counsel Can Provide Work Product Better Aligned with Client's Business Needs." Specific topics we will discuss include:
- How clients’ views of IP and intangible assets are changing and ways both inside and outside counsel can stay relevant to clients today;
- What you can do to help clients obtain meaningful patents at reduced cost;
- How to really understand clients’ business goals and how to help make those happen; and
- How to help clients monetize their patents
Guest Blogger: How Patent Vulnerability Impacts Valuation by David Wanetick of IncreMental Advantage
(This week, David Wanetick, Managing Director of IncreMental Advantage provides readers if the IP Asset Maximizer Blog with an excellent overview of the various factors that he believes affect patent valuation. Please let me know if you would like to be a Guest Blogger.)
How Patent Vulnerability Impacts Valuation by David Wanetick of IncreMental Advantage As I often tell business leaders who attend my course on Valuing Early-Stage Technologies, valuing patents isn’t rocket science. It is much more difficult. Or to paraphrase Winston Churchill, valuing patents is a riddle, wrapped in a mystery, inside an enigma. Measuring even a well-delineated permanent entity is much more difficult than may be imagined. As Neil deGrasse Tyson (a renowned astrophysicist) and Benoit Mandelbrot (the father of fractal geometry) have discussed, no one really knows what the circumference of the coastline of the United Kingdom is. The tides will cause varying
Seeking to Sell Your Patent to a Big Company? Think About These Negotation Tips
For Inventor of 21 Patents, Patent Troll Litigation Not Very Lucrative
Recently, I wrote a post on why I think that patent litigation is not a viable business model for inventors. Given a realistic deconstruction of the costs and possible damage awards, I concluded that, in most situations, it is not realistic for an inventor to presume that she will "hit the jackpot" by suing infringers and extracting settlement or damage awards. I obtained some pushback from this post, mostly from patent litigation lawyers, who contend that I am wrong in my view that patent litigation does not pay for inventors. Of course, everyone is entitled to their opinion, and I respect the views of others, however, no one who objects to my (somewhat) negative view of patent litigation as a business model, has provided me with numbers to discount my economic analysis of patent litigation. This recent post from The Prior Art blog entitled "Revealed! How Much Money a
The Coming Explosion of the Patent Monetization Market: Brought to You by Open Innovation and What Needs to Happen in Order to Speed Up the Process
This week, I got a call out of the blue from a very senior business development person at a Fortune 10 technology company "wanting to know more" about patent licensing and monetization. This was a bit strange: his company has literally dozens of patent professionals on staff, files 100's of patents a year and, as I found out, has 35 or so business people working on patent licensing and monetization efforts for the organization. So, why would he (let's call him "Bob") need to talk to me these topics? Certainly, there is a veritable army of highly-paid smart people to answer IP and patent questions at his beck and call, and I was interested in finding out what Bob sought to find out from me that he could not get from his own people. I was not surprised to find out that Bob did not want to learn more about buying and selling
A Patent Reality Check: Litigation Not a Viable Revenue Source for Most Inventors
The ability of an intrepid inventor to strike it rich from a great idea seems to be embedded in the DNA of many Americans. Perhaps this view emanates from the presence of patents in the US Constitution, which could create a feeling that US citizens have an "inalienable right" to use patent protection to their advantage. Alternatively, people may perceive the occasional media reports of successful inventors and substantial patent litigation awards as a signal that patents can serve as a path to wealth for those with great ideas (certainly, this is the Hollywood view). In truth, however, getting rich merely from a patent is a rare occurrence--maybe not as low a probability as winning the lottery, but the odds are incredibly long that any person can make money from a patented idea alone. Think about it: if all it took was a patent to make someone wealthy, there would be
“It’s Not You It’s Them” or “They’re Just Not into You”: Why Being an Independent Inventor is Like Dating
The view that a good idea will result in a windfall for an independent inventor seems to be embedded in the fabric of US culture--perhaps it's because the patent system dates from our earliest days. Indeed, a surprisingly large number of people think that getting a patent will result in a large company paying them huge sums of money for the ability to introduce a product covered by that patent. This belief serves to motivate countless numbers of inventors to spend $1000's on patent protection, as well as years of hopeful waiting for their patent to exit the Patent Office. Few ever see their product make it to the marketplace, however. As an attorney at a prestigious IP law firm, I really gave little thought to what my clients would do with their idea once I succeeded in obtaining a patent for them. My job was to help my clients convince the Patent Office that their