2016 Patent Market Report: Patent Prices And Key Diligence Data

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Publish Date:
April 18, 2017
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Source:
IPWatchdog
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Summary

What is a good price for a patent? Are you getting a great bargain or are you being overcharged? Are you overcharging or selling yourself short? Whether as a buyer or a seller, those are hard questions to answer without comprehensive pricing analysis. In the absence of a truly public market in which a buyer or seller can look at comparable packages, many questions arise around pricing. It is difficult to know what is a fair price, a bargain price or a good deal. We continue to address these questions with our pricing analysis. We use the pricing analysis not only to help our clients buy and sell patents, but also to provide market-based pricing – knowing the asking price of an average patent allows us to model the price of a specific patent or package. As an added benefit, this method avoids discounted cash-flow analysis and having to determine an imputed royalty.

We’ve worked with Mark Lemley of Stanford University on a forthcoming analysis of litigation results for transferred patents by examining a data set of US patents which were transferred and litigated through judgment. The initial results contradict the received wisdom that we’ve heard from some general counsel and chief IP counsel that one cannot successfully litigate a purchased patent. Purchased patents can be and are litigated successfully – albeit for operating companies, less successfully than organic patents. The litigation success rates vary by purchaser type and we recommend analyzing the full results when the paper becomes available and using them to adjust purchase models accordingly for your company. As noted above, some caution is recommended here, as litigation is but one, fairly narrow, use case for purchased patents.

A smaller inventing entity will most likely never have dozens of patents; and it is instructive here, that the magnitude of change in the example given, that of a patent seller with three patents; reduced the asking price by some 99%. Surely, that pleased your precious, exalted Prof. Lemley.

If this is the model you advocate:
1. charging 25% or more – an outrageously rapacious rate to levy against a property owner for brokerage services;
2. just to reduce the benefit by enormous proportions, so as to suit your cabal’s impositions upon this distorted and damaged marketplace; and,
3. together with your friendly association with the infamously anti-patent Prof. Lemley;

then, it is abundantly clear, that you are NO FRIEND of actual, real-world inventors.

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