November 16, 2016
AST has closed the first round of patent purchases for the IP3 program, which saw 21 companies, including Google, Apple, Microsoft and Ford, look at patent offers from prospective sellers. The initiative was launched with a similar model to Google’s Patent Purchase Promotion, where sellers provide a patent and the price for evaluation, with the only restriction being that the patent family on offer must contain a US grant.
IP3 received offers for 1,378 deals from 434 patent owners, which led to 56 purchases encompassing 107 active patent filings, all in the space of a single summer.
AST commented that removing the haggling element make the overall process more efficient than the current standard procedure. It forces serious sellers to only ask for reasonable prices (supposedly only 3 offers presented to AST were in excess of $1B), which allowes the buyer to get patents at better rates than are seen in a typical transaction where the average price per family is around $96k, and overall patent families range from $10k to $325k. Compare this to the brokered patent market overview published last year, where the average asking price was $189k per asset.
Why it matters
With the brokered patent market selling assets at twice the price of those seen in IP3, it shows that sellers can get a much better deal when going via a broker, with the haggling process giving a broker more opportunities to convince a buyer of the value of a patent. With a process like IP3, the buyer holds the upper hand in that they want a quick deal, and sellers have to lower prices in order to sell at all, and shows that not all patent transaction processes are equal.
Ever since Apple abandoned google maps in favour of their own maps software, and faced the initial uproar from their users due to the many inaccuracies in the software, Apple has continued to work on their maps software. Their recent version is getting favourable reviews and positive comparisons to Google’s offering. A potential upper hand in the mobile maps race could come their way, as Apple has filed a patent for a potentially very useful Augmented Reality (AR) feature for their maps software. The patent covers the use of the phone’s sensors and camera in order to overlay map data onto the on-screen image to help with navigating. This would help users with finding a point of interest, much like Google thought would happen with their Glass project they recently sent back to the lab.
Why it matters
With Augmented reality tipped as a major tech area for growth and with phones get ever smarter, gaming technology being incorporated in real world applications, and VR-type headsets becoming more popular, it is interesting to see that older players have been exploring this market for some time, and their early patent filings on the technology give them a strong foothold for capitalising on the market.
After the sale of Rockstar’s patents to RPX, the senior team left to form the patent advisory business Marquis IP. This week, Hilco Global announced that they have acquired Marquis IP and the subsequent launch of Hilco IP Merchant Banking, which is to be headed by a former Ocean Tomo exec.
The bank will provide IP-based financial and technical advice, IP monetisation (both sale and licensing) solutions and will invest in “IP-driven transactions”, which makes them a competitor for IP-based financing giant Fortress and could help companies with strong IP raise capital for growth.
Why it matters
The fact that this firm, aimed at assisting patent owners use their assets more effectively, whether for monetisation, raising funds or simply changing strategy, shows that NPEs are suffering in the current US court system, and that if patent rights continue to be improved via federal court decisions, such as the recent moves which improved the prospects of software patents’ validity, then patent values could be on the up and perhaps we could see more NPEs move into this sector.