IP Dealmakers: The 3 Key Take-aways for IP Licensing Deals in 2015
Things are looking up.
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: Optimism, Geography, Bargains.
Despite the doom and gloom the past two years, most of the discussion was centered around the discussion of a (slightly) improving marketplace – with even a flat marketplace being something to be happy with. Although nowhere near market highs of past years, BRG Capstone provided an interesting chart asking if a price rebound was a real indicator of a more optimistic market.
#IPDF15. Michael dansky. BRG-capstone’s chart with patent sale price chart. pic.twitter.com/R9eR1vEm8v
— Julia at Chipworks (@Julia_Elvidge) December 7, 2015
Solid first day of presentations at the IP Dealmakers Forum in NYC. Consensus that outlook more positive than 1 year ago. #IPDF15 — Louis Carbonneau (@louiscarbonneau) December 7, 2015
While this gives brokers and sellers something to be happy about, on a complimentary note, the pure licence based companies still are moving to hedge their bets by diversifying. Gene Quinn summarizes Edward Jung’s keynote, noting how diversification is helping offset some of the challenges of the past.
US makes it harder for innovation, companies must diversify to Europe, China @IPDealmakers @ipwatchdog – https://t.co/BA8SiL1vTG
— Gene Quinn (@ipwatchdog) December 8, 2015
3rd panel of the day @IPDealmakers Forum looking at new IP businesses ie moving beyond traditional monetisation. Big trend right now #IPDF15 — IAM (@IAM_magazine) December 7, 2015
One interesting point I heard was Brian Hinman from Royal Philips, where he noted that even inside the Philips IP group they diversify as well via investments in startups and other portfolios:
Investments in startups and portfolios to monetize or protect our products – it is part of our p&l that has paid dividends – Hinman #IPDF15
— Peter Cowan (@noremacc) December 8, 2015
But just because it’s looking up doesn’t mean it’s still easy. The one point mentioned several times is how for small investors, lenience entities, or single patent sales / enforcement, the market challenges still hasn’t changed for them.
#IPDF15 small portfolio companies will need to diversify to grow. Helps deliver results more evenly for the investor – Skippen, WiLan — Peter Cowan (@noremacc) December 7, 2015
Single inventors are in a tough spot. The buying market is marginally optimistic (but numerocity is important) – Spandenberg #IPDF15
— Peter Cowan (@noremacc) December 7, 2015
2) Geography Perhaps part of the optimism is the shift to Europe and China to supplement the US. And while the US legal environment is smoothing out, it is still to unpredictable to make large IP investments and bank on a return. With a reduced time to decision, Germany seems to still be the venue of choice with the predictability of process trumping the potentially lower returns.
#IPDF15 Croxall – $30-40M IP settlements still possible in U.S. and in Europe (Germany in particular). $150M+ settlements are not. — Julia at Chipworks (@Julia_Elvidge) December 7, 2015
Dollars may be lower in Europe damages but predictability and time is better – Hartstein. Injunctions as well – Croxall #IPDF15
— Peter Cowan (@noremacc) December 7, 2015
It was interesting to note that even in broad geographies like Europe, a focus on some specific countries still dominates like Germany. But to simply to consider German as your EU strategy – and to do so without a quality patent – isn’t enough the bigger global picture still needs considered.
Decision with injunction in Germany is not the whole picture, you need cash to file the bond + an international playbook – Dietrich #IPDF15 — Peter Cowan (@noremacc) December 8, 2015
#IPDF15. Yann Dietrich- German courts -you really be serious and prepared. You could be thrown out quickly if you have a weak case.
— Julia at Chipworks (@Julia_Elvidge) December 8, 2015
It’s not patent unfriendly, it’s just you need a good patent and case now (admittedly harder for SMEs) – Donegan @EverEdgeUK #IPDF15 — Peter Cowan (@noremacc) December 8, 2015
Even within Asia Pacific there are countries of note, with South Korea and Japan leading the play, with Singapore looking to be the IP hub via government incentives.
The current “temperature” of global IP markets #IPDF15 from global experts pic.twitter.com/Qdw2nAbnGK
— Prediqtus (@Prediqtus) December 8, 2015
In short it’s still a global business that needs managed with topics like tax structures, enforcement, bond requirements, and injunctions to consider:
Tax structures also drive ip filings in certain countries (Luxembourg, Ireland) not just innovation centres – Donegan @EverEdgeUK #IPDF15 — Peter Cowan (@noremacc) December 8, 2015
Discussions around the conference seemed to indicate prices seemed to be at the point where it was low, and although it may drop a little more it was low enough to start to re-invest in purchasing – particularly for those that had the backing to buy and hold.
Think we’re at bottom with #patent mkt and now is good time to start investing cautiously. – Ashley Keller GKC #IPDF15
— IP Dealmakers Forum (@IPDealmakers) December 7, 2015
A few people indicated that investing outside of the traditional US only IP marketplace was done and the global portfolio was a necessity. BRG Capstone noted investing in Chinese patents was one thing to seriously consider.
Interesting point from Michael Dansky of BRG Capstone @IPDealmakers – If I had money and a lot of time I’d invest in Chinese patents #IPDF15 — IAM (@IAM_magazine) December 7, 2015
Keynote speaker Ed Jung of IV – Average cost per asset peaked in 2007 now at lowest it’s ever been in the history of IV buying IP #IPDF15
— IAM (@IAM_magazine) December 7, 2015
#IPDF15. Edward Jung, IV. Chart of his version of patent acquisition costs per asset over time. pic.twitter.com/Sx8tdIGwIW — Julia at Chipworks (@Julia_Elvidge) December 7, 2015
Wrapup: As usual, the industry is constantly changing and it is those that are adapting quickly are seeing the financial benefits. Having a licensing program for any venture requires a key team to search out and execute on opportunities, and with new geographical opportunities and IP assets seemingly at the bottom (for now), there are deals to be made.