MANAGING IP
Rani Mehta September 23, 2022
It’s a buyer’s market and deals were down in Q2 2022, but sellers with strong patents can still entice purchasers
It’s not always easy to sell patents, and it’s starting to show.
The number of patent sales has gone done recently, with data from Allied Security Trust (AST) revealing that just 272 transactions took place in the US between April and June.
That was the lowest in a quarter since Q2 2018.
It’s still a buyer’s market, according to sources at AST, which buys patents that its members want licences to, and at non-practising entities (NPEs) IPValue, Blackbird Technologies and Dominion Harbor.
“There are a lot of patents on the market, a lot of good patents, and a lot more companies are trying to find something to do with their intellectual property,” says David Pridham, CEO of Dominion Harbor in Dallas. “It’s better to be a buyer than a seller right now.”
Purchasers can therefore afford to be discerning, and there are several qualities they care about when they acquire patents, say sources.
For one thing, they want patents that can help them achieve their business objectives, which for NPEs involves being able to license or assert the IP in courts. They will therefore do a lot of their own due diligence to ensure that patents are valid and likely to be infringed by others.
It’s helpful too when sellers are already well known in their technology areas or have relationships with the buyers.
Acquirers are cautious, however, when sellers have previously agreed that their IP will be licensed to other companies if ever sold to NPEs.
Validity values
Buyers want to ensure their prospective patents wouldn’t be invalidated, including for subject matter eligibility issues, set out in Section 101 under Title 35 of the US Code.
Wendy Verlander, CEO of Blackbird Technologies and managing partner of Verlander LLP in Boston, says she looks at whether she could make arguments in favour of eligibility under Section 101 based on the case law.
She adds that she prefers hardware patents as these don’t run into such problems, but she won’t rule out software if she can navigate these validity issues.
For the full article, continue reading at Managing IP.