Patent Auction - $2M bid fails to meet reserve, several sold for $1M+

patent

I have written about the value of a patent portfolio to a company before (see here and here); some of the value comes from the inherent technology, some of it comes from being able to block your competitor from doing something, and at times the value of the patent comes from the perceived advantage it gives the company. All of them are valid reasons to acquire and build a decent patent portfolio.

Lately, a lot of people have cautioned that in their opinion, patents are not worth as much. Some recent changes in the Patent Law have provided additional reasons for people to argue that the inherent value of the patent is going down.

I do not agree with that assertion; at least not completely. There may be some valuation variance that will happen because of the recent changes in the patent law, but going forward, the patents will continue to provide strong offensive and defensive tools to succeed in the market place.

ocean_tomo

An easiest and clearest way to establish the real value of something is to examine some recent transactions, especially when the transactions are “clean” and not encumbered by fuzzy relationships between the parties, and the agreements are not entered into under duress of a lawsuit, and are not undertaken for tax mitigation reasons. An open auction provides such a valuation tool, and is a superb guide to establish the real value of an asset.

There is no Ebay for patents, but there are several companies that specialize in the IP brokerage business. I have dealt with most of them in one capacity of other.

Yesterday, Ocean Tomo, one of the major IP asset brokers, held an open auction in Chicago. There were about 400 patents and applications spread out amongst roughly 70 lots.

Highlights:

  • One of the lots, which has 3 patents and several other pending applications related to GPS location based system and logistics, got a bid of $2M+ but failed to sell because it did not meet the reserve price. The auctioneer’s estimate was about $5M.
  • Online ticketing system patent went for $1.00M (estimate was $2.2M)
  • Digital Media System and management patent went for $1.75M
  • Computer interface device patent went for $750k.
  • Several others sold for $500k+
  • About 50% of the patents sold, which is typical.

Generally, after the auction is over, and for patents that did not meet the reserve price, there is some negotiation between the patent owners and the interested parties; so the total revenue realized from this patent auction will exceed the previous auction amount of $10M.

While the overall perceived value of patents might see some reduction because of the change in the patent law, there is still a healthy demand for innovative technologies and the competitive advantages they can provide in the marketplace.


2 Responses to “Patent Auction - $2M bid fails to meet reserve, several sold for $1M+”

  1. By Troller on Oct 26, 2021 | Reply

    I think patent trolls are buying these patents. Otherwise I don’t see how a company can get $5M worth of value out of a patent without enforcing it vigorously.

  1. 1 Trackback(s)

  2. Nov 22, 2007: BizOrigin » Blog Archive » Amazon One Click Patent is alive and clicking away - the saga continues.

Post a Comment

30 queries. 0.453 seconds.