Turning patents into money
The Deal has a story including the text:
Michael Pierantozzi of iPotential: "Patent management used to be an afterhought. That's changing. There's been a transition from treating patents as legal assets to treating them as business assets." It's certainly not a new phenomenon, adds Pierantozzi. Executives have been warming to the notion of monetization for a decade or more. But the expense of shopping assets or conducting due diligence - which Pierantozzi says can run between $50,000 to $100,000 on a $1 million portfolio - is prohibitive. And advisers that can help facilitate a patent sale or companywide IP management strategy such as IPortfolio, ThinkFire Services USA Ltd., or the patent auction operator Ocean Tomo LLC are relatively new to the scene.
For his part, Pierantozzi has been knee-deep in IP management for years. He previously was a managing director in the IP licensing group at Hewlett-Packard Co. (NYSE:HPQ), which as we've reported previously, was early to the table of IP monetization. In fact, the IPotential leadership team is stacked with former corporate heavyweights, including founder and chief executive Ron Epstein, who previously was director of licensing for Intel Corp. (NASDAQ:INTC), and president Joe Chernesky, who was director of IP business for The Boeing Co. and held several roles in Intel's IP organization.
Hmmm, did the Wright Brothers or Chester Carlson view patents as "legal assets"?
***See also
Robert S. Bramson on "carrot licensing":
Carrot licensing is much more about licensing technology than licensing patents. In
carrot licensing, the threshold question is whether the potentially licensable
technology (not the patent) will enable the licensee to make a new, better or
cheaper product? The follow-on question is whether the technology can be
perfected and marketed in a reasonable time, at a reasonable cost, and with a
reasonable probability of success?
In carrot licensing, the patent is the "handmaiden" of the licensable technology and
serves two useful purposes:
1. The patent serves as a vehic1le, in a portfolio mining operation, for locating
potentially valuable underlying technologies. Patents are used for this purpose,
because there is usually not a good machine searchable database of technologies,
so searching patents is the second best approach. In fact, searching patents for
licensable technologies may on occasion be somewhat misleading because the
patent is usually not written as a technical description for a licensing program. It
may represent an early stage of the technology, and not the stage that is available to
license. The patent also may not do a good job of describing what is important
about the technology in general (as opposed to describing the "invention" covered
by the patent). This is why getting good and early input about the technology from
the inventor or other knowledgeable person is so important.
2. The patent may provide protection from competition to the licensee (or potential
licensee) of the technology. If the licensee is successful in the marketplace with the
licensed technology, and its competitors can freely copy its improved products, the
technology is a lot less valuable than where there is good patent coverage to keep
competitors away (or force them to adopt inferior solutions).
Carrot licensing will usually involve an exclusive license to the licensee. This is
the case because the licensee is highly unlikely to devote the time, money and
effort to develop the licensed product, unless it has exclusivity.
Edison in the Boardroom
Michael Pierantozzi of iPotential: "Patent management used to be an afterhought. That's changing. There's been a transition from treating patents as legal assets to treating them as business assets." It's certainly not a new phenomenon, adds Pierantozzi. Executives have been warming to the notion of monetization for a decade or more. But the expense of shopping assets or conducting due diligence - which Pierantozzi says can run between $50,000 to $100,000 on a $1 million portfolio - is prohibitive. And advisers that can help facilitate a patent sale or companywide IP management strategy such as IPortfolio, ThinkFire Services USA Ltd., or the patent auction operator Ocean Tomo LLC are relatively new to the scene.
For his part, Pierantozzi has been knee-deep in IP management for years. He previously was a managing director in the IP licensing group at Hewlett-Packard Co. (NYSE:HPQ), which as we've reported previously, was early to the table of IP monetization. In fact, the IPotential leadership team is stacked with former corporate heavyweights, including founder and chief executive Ron Epstein, who previously was director of licensing for Intel Corp. (NASDAQ:INTC), and president Joe Chernesky, who was director of IP business for The Boeing Co. and held several roles in Intel's IP organization.
Hmmm, did the Wright Brothers or Chester Carlson view patents as "legal assets"?
***See also
Robert S. Bramson on "carrot licensing":
Carrot licensing is much more about licensing technology than licensing patents. In
carrot licensing, the threshold question is whether the potentially licensable
technology (not the patent) will enable the licensee to make a new, better or
cheaper product? The follow-on question is whether the technology can be
perfected and marketed in a reasonable time, at a reasonable cost, and with a
reasonable probability of success?
In carrot licensing, the patent is the "handmaiden" of the licensable technology and
serves two useful purposes:
1. The patent serves as a vehic1le, in a portfolio mining operation, for locating
potentially valuable underlying technologies. Patents are used for this purpose,
because there is usually not a good machine searchable database of technologies,
so searching patents is the second best approach. In fact, searching patents for
licensable technologies may on occasion be somewhat misleading because the
patent is usually not written as a technical description for a licensing program. It
may represent an early stage of the technology, and not the stage that is available to
license. The patent also may not do a good job of describing what is important
about the technology in general (as opposed to describing the "invention" covered
by the patent). This is why getting good and early input about the technology from
the inventor or other knowledgeable person is so important.
2. The patent may provide protection from competition to the licensee (or potential
licensee) of the technology. If the licensee is successful in the marketplace with the
licensed technology, and its competitors can freely copy its improved products, the
technology is a lot less valuable than where there is good patent coverage to keep
competitors away (or force them to adopt inferior solutions).
Carrot licensing will usually involve an exclusive license to the licensee. This is
the case because the licensee is highly unlikely to devote the time, money and
effort to develop the licensed product, unless it has exclusivity.
Edison in the Boardroom
posted by Lawrence B. Ebert at 5:35 AM
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