IP Dealmakers: The 3 Key Take-aways for IP Licensing Deals

The only constant is change.

Spending 2 days with the IP and Investment leaders in NYC this week at the IP Dealmakers Forum, highlighted for me 3 key take-aways of IP licensing in today’s business environment: Flexibility, Opportunity, Success.

#1) Flexibility
A consistent theme throughout the time was the discussion of licensing flexibility as a top priority.  With the investment firms becoming more sophisticated in reviewing deals, combined with the lowering volume of both quality deal flow and the financial structure, dealmakers are needing to be more flexible in  how the opportunity is structured for financial benefits.  In short, there may be less cash up front for now but for the quality patents it still gives the opportunity for the same revenue at the back-end.

Flexibility is driven in part by the legal climate.  A short, yet pointed discussion, happened on how recent patent law changes have impacted how deals are being executed.  The discussion around law changes highlighted the level of flexibility in the room, with most speakers simply noting the recent law changes and then moving swiftly to how their processes and procedures have changed to adapt to the new rules. It is this swift acceptance of the legal changes from a business view that breaks the top dealmakers apart from the rest.




#2) Opportunities In both data and beautiful graphs (thank you David Morland of 3LP Consulting), we saw that not only is there new opportunities but a growing market cap that they support. New entrants into the ecosystem of publicly traded IP companies show at least a $1.4B increase in market cap recently, a marker of continued volume on the private side. While the move to lower deal cash is happening, the cross-border volume is growing.

Overall there was a consensus that that it is a buyers market, and for those IP Investment firms with access to capital, it is a good time to invest (and to do so without pure reliance on Excel spreadsheets). And the investment is not limited to the traditional geographies or sectors yet a large point of discussion did seem to always circulate back to topics like Automotive, Medical, Agriculture, Industrial, and other non-software related sectors.


One challenge brought up on the opportunity side is for investors to have more educated IP based analysis to interpret the information, and translate it into business impacts.

#3) Success Like any business, the stars will emerge to be successful, but is is the A-player teams that will be leading the charge.


There is no denying that as deals are forged, the licensing path of the successful is supported by litigation at some point. Certain “fruit name companies in California” seem to be leading the charge of having a standard process of litigate over license, one patent at a time. However for those with the capital and team to support the endeavour, there will be success in the long term.


Wrapup: With the constant of industry change, the entities having breakthrough licensing programs are the result of flexibility and opportunity identification: The dealmakers in the IP area are several steps ahead of the reset of the VC, Instustional Investors, and Blue Chip markets. The IP marketplace is growing, and it is up to those that capitalize on the market and legal trends to land in the ‘success’ category.


Post-script: If you addend the event, you will see I didn’t cover the keynote by Jay Walker. The only thing I didn’t like about the keynote is that it was so good, I didn’t even have time to take notes on it, and I wasn’t alone!


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