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in collaboration
with
1
Contact Information:
+1 650 967 6555
kent@richardsonoliver.com
in collaboration
with
Agenda
Look back
Market dynamics
Prediction
2
in collaboration
with
What’s the SecondaryPatent Market?
Copyright 2017 ROL 3
Seller Buyer
in collaboration
with
What’s in a Brokered Patent Package?
• List of patents for sale, applicable market, infringement analysis (claim chart), background on the seller
• Asking price, bid dates, special circumstances (license back, specific encumbrances)
Typical package
• Confluence Patent Portfolio
• Single family (15 US patents and 7 open applications) relating to social network data aggregation.
• 2006 priority date.
• Received July 2013
• Sold October 2014
• Asking prices: “7 figures”
• Multiple claim charts presented for
• Apple
• Google
• Facebook
• Purchased by an operating company
• Fingerprint Cards AB
Example package from Patent Profit (Will Plut)
4Copyright 2017 ROL
in collaboration
with
LinkedIn – What You Can Do Over Four Years
2011 2016
0
500
1000
1500
2000
2500
#ofAssets
Portfolio Growth by Priority Year
Organic Portfolio Projected Organic Portfolio
0
500
1000
1500
2000
2500
#Assets
Total Portfolio by Priority Year
Acquired Portfolio Organic Portfolio
5
in collaboration
with
WhereIs the Patent Market Today?
6
in collaboration
with
Ten Years Ago - Secondary Market
2007
IV the
biggest
buyer
Few
brokers
AST and
RPX
Few
capable
buyers
What’s
a good
deal?
7
in collaboration
with
Five Years Makes a Difference
8
2012 2017
Sources
Transactions
Pricing
Capabilities
Private Public
Only WSJ
published deals
Quarterly public data
Skewed
Intellectual Ventures
plus select companies
Quarterly public data
SMEs buying
in collaboration
with
Agenda
Look back
Market dynamics
Prediction
9
in collaboration
with
Sellers
Buyers
Direct Sales
>1,000 deals per year hit the market
And 50+ more …
10
in collaboration
with
How Big Is the Patent Market?
11
$0
$2
$4
$6
$8
$10
$12
$14
2011-Q1 2012-Q1 2013-Q1 2014-Q1 2015-Q1 2016-Q1 2017-Q1
ROL Group Tracked Brokered and Private Market
Cumulative Sum ($B)
$11 billion plus in patent packages
90 thousand plus patent assets
100 technology categories
Unsold
Sold
in collaboration
with
What’s the Asking Price of a Patent?
$260,640
Copyright 2017 ROL 12
in collaboration
with
Caveats – Sure There Are a Few
13
in collaboration
with
Asking Prices Are Stabilising
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2012 2013 2014 2015 2016
$K
Listing Year
Average Asking Prices ($K)
Price per US Issued
Price per Asset
14
in collaboration
with
What’s Hot In the Patent Market Today
15
in collaboration
with
Sales Rates Dropping or Shifting?
Sold by Year Listed – Bad Trend
0%
5%
10%
15%
20%
25%
30%
35%
40%
2012 2013 2014 2015 2016
SalesRate
Listing Year
% Sold as % Listed Per Year – OK?
0%
5%
10%
15%
20%
25%
2012 2013 2014 2015 2016
Year
Sales in Calendar Year as % of Listings in
Calendar Year
16
in collaboration
with
Sales Rates Dropping or Shifting?
Sold by Year Listed – Bad Trend
0%
5%
10%
15%
20%
25%
30%
35%
40%
2012 2013 2014 2015 2016
SalesRate
Listing Year
Sold as % Listed Per Year – OK?
0%
5%
10%
15%
20%
25%
30%
35%
40%
2012 2013 2014 2015 2016
Year
17
in collaboration
with
Some Brokers Are More Effective Than Others
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0 5 10 15 20 25 30 35 40 45 50
SalesRate
Number of Listings
2015 Broker Sales Rate
Broker's 2015 Sales Rate 2015 Sales Rate 10.4%
18
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with
Value Distribution In the SecondaryMarket
Value
Patent market
19
Goal: Identify high-value patents to
purchase (1-2% of market)
✓
Copyright 2017 ROL
in collaboration
with
66%
17%
10%
3%
2% 1%
Operating company
NPE
Inventor
University/research
Defensive aggregator
Other
DistributionofSellerTypeby2016SaleYear:OperatingCompaniesDominatetheMarket
Operating companies represent over 66% of the patents on the market down from 71%
NPEs increased their sales up last year, this has continued - 17% up from 16% - likely as a result of difficulties enforcing
their patents
Cross-licensing before competitor patent sales is a benefit
20
in collaboration
with
Sales by Sales Year – Five Years
OpCos are the biggest sellers
NPE sales increasing
21
in collaboration
with
48%
34%
15%
3%
Operating company
NPE
Defensive aggregator
Other
Distribution of Buyer Type by 2016 Sale Year
Operating companies now top buyers
NPE buying is down to 32% from 42%
IV buying dropped to only 13 packages down from 40
RPX is top single buyer
22
in collaboration
with
Buyers by Sales Year – Five Years
OpCos increasing their buying
NPE down but not out
Non-public companies buying increased from ~0% to 30% of company purchases
2012 2013 2014 2015 2016 Total
Other 0% 3% 7% 2% 5% 4%
Defensive Aggregator 11% 16% 22% 19% 19% 19%
OpCo 41% 45% 31% 42% 41% 39%
NPE 48% 37% 40% 36% 35% 38%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
%ofPackageSales
Sale year
Other
Defensive Aggregator
OpCo
NPE
23
in collaboration
with
TopSellersandBuyers2016
Top Sellers by Package Count
Alcatel Lucent
Allied Security Trust (AST)
ATT
BAE Systems, Inc.
British Telecom
Caveo
Elizabeth Dyor
Empire IP, LLC
Harris Corporation
IBM
Imation Corporation
Intel
NEC
Netsocket
Nokia Solutions and Networks (NSN)
Panasonic Corporation
Petnote LLC
QinetiQ Limited
Rockstar
Rovi Corporation
TP Lab, Inc.
Tyco Electronics
Verisign, Inc.
Verizon
VideoMining Corporation
Xerox/PARC
Top Buyers by Package Count
9051147 Canada Inc.
Alliacense Limited Llc
Allied Security Trust (AST)
Beijing Xiaomi Mobile Software Co., Ltd.
Carlow Innovations LLC
Commscope Emea Limited
Domo, Inc.
Empire IP LLC
Facebook, Inc.
Finnavations LLC
Gemalto SA
Google Inc.
Huawei Technologies Co., Ltd.
Intellectual Discovery Co., Ltd.
Intellectual Ventures
Knapp Investment Company
Linkedin Corporation
Marking Object Virtualization Intelligence, LLC
Microsoft Technology Licensing LLC
Open Invention Network, LLC
Optimum Communications Services, Inc.
Palo Alto Networks, Inc.
Rakuten, Inc.
Red Hat, Inc.
RPX Corporation
Taiwan Semiconductor Manufacturing Co., Ltd.
Twitter, Inc.
Uniloc Luxembourg S.A.
24
in collaboration
with
Litigation Analysis: You Can Model Your Risk
Has Litigation Has IPR
Package Type Before
listing date
After
listing date
Before
listing date
After
listing date
Sold packages 5.4% 10.2% 0.0% 3.0%
All packages 3.8% 3.5% 0.0% 1.4%
10.2% of sold packages are litigated – time to update models?
Both sold and unsold packages are litigated post listing
Defensive aggregator value may be greater than anticipated
25
in collaboration
with
Agenda
Look back
Market dynamics
Prediction
26
in collaboration
with
Where Is the Market Going?
27
in collaboration
with
Trends and Predictions
Market size remains around $200 million to $300 million
More international sales
Prices – stabilised
Sales rates – remain low
Faster and simpler transactions expand market
NPEs continue to buy – fewer buyers drive this part of the
market
More brokers leave
28
in collaboration
with
29
in collaboration
with
Questions?
30

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What Can We Predict from Five Years of Secondary Patent Sales?

  • 1. in collaboration with 1 Contact Information: +1 650 967 6555 kent@richardsonoliver.com
  • 3. in collaboration with What’s the SecondaryPatent Market? Copyright 2017 ROL 3 Seller Buyer
  • 4. in collaboration with What’s in a Brokered Patent Package? • List of patents for sale, applicable market, infringement analysis (claim chart), background on the seller • Asking price, bid dates, special circumstances (license back, specific encumbrances) Typical package • Confluence Patent Portfolio • Single family (15 US patents and 7 open applications) relating to social network data aggregation. • 2006 priority date. • Received July 2013 • Sold October 2014 • Asking prices: “7 figures” • Multiple claim charts presented for • Apple • Google • Facebook • Purchased by an operating company • Fingerprint Cards AB Example package from Patent Profit (Will Plut) 4Copyright 2017 ROL
  • 5. in collaboration with LinkedIn – What You Can Do Over Four Years 2011 2016 0 500 1000 1500 2000 2500 #ofAssets Portfolio Growth by Priority Year Organic Portfolio Projected Organic Portfolio 0 500 1000 1500 2000 2500 #Assets Total Portfolio by Priority Year Acquired Portfolio Organic Portfolio 5
  • 6. in collaboration with WhereIs the Patent Market Today? 6
  • 7. in collaboration with Ten Years Ago - Secondary Market 2007 IV the biggest buyer Few brokers AST and RPX Few capable buyers What’s a good deal? 7
  • 8. in collaboration with Five Years Makes a Difference 8 2012 2017 Sources Transactions Pricing Capabilities Private Public Only WSJ published deals Quarterly public data Skewed Intellectual Ventures plus select companies Quarterly public data SMEs buying
  • 10. in collaboration with Sellers Buyers Direct Sales >1,000 deals per year hit the market And 50+ more … 10
  • 11. in collaboration with How Big Is the Patent Market? 11 $0 $2 $4 $6 $8 $10 $12 $14 2011-Q1 2012-Q1 2013-Q1 2014-Q1 2015-Q1 2016-Q1 2017-Q1 ROL Group Tracked Brokered and Private Market Cumulative Sum ($B) $11 billion plus in patent packages 90 thousand plus patent assets 100 technology categories Unsold Sold
  • 12. in collaboration with What’s the Asking Price of a Patent? $260,640 Copyright 2017 ROL 12
  • 13. in collaboration with Caveats – Sure There Are a Few 13
  • 14. in collaboration with Asking Prices Are Stabilising $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 2012 2013 2014 2015 2016 $K Listing Year Average Asking Prices ($K) Price per US Issued Price per Asset 14
  • 15. in collaboration with What’s Hot In the Patent Market Today 15
  • 16. in collaboration with Sales Rates Dropping or Shifting? Sold by Year Listed – Bad Trend 0% 5% 10% 15% 20% 25% 30% 35% 40% 2012 2013 2014 2015 2016 SalesRate Listing Year % Sold as % Listed Per Year – OK? 0% 5% 10% 15% 20% 25% 2012 2013 2014 2015 2016 Year Sales in Calendar Year as % of Listings in Calendar Year 16
  • 17. in collaboration with Sales Rates Dropping or Shifting? Sold by Year Listed – Bad Trend 0% 5% 10% 15% 20% 25% 30% 35% 40% 2012 2013 2014 2015 2016 SalesRate Listing Year Sold as % Listed Per Year – OK? 0% 5% 10% 15% 20% 25% 30% 35% 40% 2012 2013 2014 2015 2016 Year 17
  • 18. in collaboration with Some Brokers Are More Effective Than Others 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0 5 10 15 20 25 30 35 40 45 50 SalesRate Number of Listings 2015 Broker Sales Rate Broker's 2015 Sales Rate 2015 Sales Rate 10.4% 18
  • 19. in collaboration with Value Distribution In the SecondaryMarket Value Patent market 19 Goal: Identify high-value patents to purchase (1-2% of market) ✓ Copyright 2017 ROL
  • 20. in collaboration with 66% 17% 10% 3% 2% 1% Operating company NPE Inventor University/research Defensive aggregator Other DistributionofSellerTypeby2016SaleYear:OperatingCompaniesDominatetheMarket Operating companies represent over 66% of the patents on the market down from 71% NPEs increased their sales up last year, this has continued - 17% up from 16% - likely as a result of difficulties enforcing their patents Cross-licensing before competitor patent sales is a benefit 20
  • 21. in collaboration with Sales by Sales Year – Five Years OpCos are the biggest sellers NPE sales increasing 21
  • 22. in collaboration with 48% 34% 15% 3% Operating company NPE Defensive aggregator Other Distribution of Buyer Type by 2016 Sale Year Operating companies now top buyers NPE buying is down to 32% from 42% IV buying dropped to only 13 packages down from 40 RPX is top single buyer 22
  • 23. in collaboration with Buyers by Sales Year – Five Years OpCos increasing their buying NPE down but not out Non-public companies buying increased from ~0% to 30% of company purchases 2012 2013 2014 2015 2016 Total Other 0% 3% 7% 2% 5% 4% Defensive Aggregator 11% 16% 22% 19% 19% 19% OpCo 41% 45% 31% 42% 41% 39% NPE 48% 37% 40% 36% 35% 38% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% %ofPackageSales Sale year Other Defensive Aggregator OpCo NPE 23
  • 24. in collaboration with TopSellersandBuyers2016 Top Sellers by Package Count Alcatel Lucent Allied Security Trust (AST) ATT BAE Systems, Inc. British Telecom Caveo Elizabeth Dyor Empire IP, LLC Harris Corporation IBM Imation Corporation Intel NEC Netsocket Nokia Solutions and Networks (NSN) Panasonic Corporation Petnote LLC QinetiQ Limited Rockstar Rovi Corporation TP Lab, Inc. Tyco Electronics Verisign, Inc. Verizon VideoMining Corporation Xerox/PARC Top Buyers by Package Count 9051147 Canada Inc. Alliacense Limited Llc Allied Security Trust (AST) Beijing Xiaomi Mobile Software Co., Ltd. Carlow Innovations LLC Commscope Emea Limited Domo, Inc. Empire IP LLC Facebook, Inc. Finnavations LLC Gemalto SA Google Inc. Huawei Technologies Co., Ltd. Intellectual Discovery Co., Ltd. Intellectual Ventures Knapp Investment Company Linkedin Corporation Marking Object Virtualization Intelligence, LLC Microsoft Technology Licensing LLC Open Invention Network, LLC Optimum Communications Services, Inc. Palo Alto Networks, Inc. Rakuten, Inc. Red Hat, Inc. RPX Corporation Taiwan Semiconductor Manufacturing Co., Ltd. Twitter, Inc. Uniloc Luxembourg S.A. 24
  • 25. in collaboration with Litigation Analysis: You Can Model Your Risk Has Litigation Has IPR Package Type Before listing date After listing date Before listing date After listing date Sold packages 5.4% 10.2% 0.0% 3.0% All packages 3.8% 3.5% 0.0% 1.4% 10.2% of sold packages are litigated – time to update models? Both sold and unsold packages are litigated post listing Defensive aggregator value may be greater than anticipated 25
  • 27. in collaboration with Where Is the Market Going? 27
  • 28. in collaboration with Trends and Predictions Market size remains around $200 million to $300 million More international sales Prices – stabilised Sales rates – remain low Faster and simpler transactions expand market NPEs continue to buy – fewer buyers drive this part of the market More brokers leave 28