Even within a single organization several theories about how to monetize intellectual property can exist. We look into how to help you reconcile these different viewpoints to establish a clear business case and keep everyone on the same page.

1. Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 1
The Patent Monetization Cookbook
The Who, What, Where, When, Why and How…

2. Why Patent Monetization?
Board
member
“We need to monetize our IP”
CFO “Cut your budget”
CEO “Generate some cash”
You “This is a good idea”
Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 2

3. Patents: Analogies to South Park
Step 1:
Gather
Patents
Step 2: X
Step 3:
Make
Money
Step 1:
Gather
Underwear
Step 2: X
Step 3:
Make
Money
South Park Business Model
Patent Owner Business Model
Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 3

4. Solving for X…
Baseline business
case
• TIM and SIM estimates
• Basic ROI for
monetization
Identify and
understand
patents of interest
• Needs analysis
• Diligence drives value
Understand and
select alternative
uses
• Defend
• License
• Sell
• Drop
Execute
• Authority
• Commitment
• Resources
Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 4

5. Business Case
Estimate
the
Number of
Patents to
Markets
Assume the patents are good enough to license, can you
still make the business case?
Out of all of your patents, how many do you think will be
useful in what markets?
TIM and
SIM
Total Impacted Market & Serviceable Impacted Market
define the limits of the valuation?
Where in the value chain are the patents most
applicable?
What price are you likely to be achieve in what time?
Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 5

6. Example Simplified Licensing Model ($M)
Company 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Co1 0 0 0 33.2 0 0 0 0 0 0 0
Co2 0 0 0 16.6 0 0 0 0 0 0 0
Co3 0 0 0 0 0 0 1.66 0 0 0 0
Co4 0 0 0 0 0 0 1.66 0 0 0 0
Co5 0 0 0 0 9.96 0 0 0 0 0 0
Co6 0 0 0 0 16.6 0 0 0 0 0 0
Co7 0 0 0 0 19.92 0 0 0 0 0 0
Co8 0 0 0 0 0 0 0 0 0 0 0
Co9 0 0 0 0 0 0 0 0 0 0 0
Co10 0 0 0 0 0 0 0 0 0 0 0
Revenue Total 0 0 0 49.8 46.48 0 3.32 0 0 0 0
Cost 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Prosecution 1 1 1 0.5 0.5 0.2 0.2 0.2 0.2 0.1 0.1
Market Analysis 0.25 0.25 0.25 0.25 0.25 0.25 0 0 0 0 0
Reverse Engineering 0.25 0.5 0.5 0.25 0.25 0 0 0 0 0 0
Litigation 0 1 2 4 2 0 0 0 0 0 0
Corporate Marketing 0.1 0.1 0.4 0.2 0.2 0 0 0 0 0 0
Sales & Management 0.75 0.75 0.75 2.5 2.5 0.5 0.25 0 0 0 0
Cost Total 2.35 3.6 4.9 7.7 5.7 0.95 0.45 0.2 0.2 0.1 0.1
Net Income -2.35 -3.6 -4.9 42.1 40.78 -0.95 2.87 -0.2 -0.2 -0.1 -0.1
Discount Rate 17%
NPV $33.81
Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 6

7. Solving for X…
Baseline business
case
• TIM and SIM estimates
• Basic ROI for
monetization
Identify and
understand
patents of interest
• Needs analysis
• Diligence drives value
Understand and
select alternative
uses
• Defend
• License
• Sell
• Drop
Execute
• Authority
• Commitment
• Resources
Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 7

8. Opportunity
RiskOK
OK
Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 8
Identifying Patents - Patent Needs Analysis
Own
Need

9. Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 9
Portfolio Analysis

10. Mapping and Ranking Your Assets
Asset
diligence
drives
value
Testing creates Very
Important Patents
(VIPs)
All monetization
options require testing
Volume - market size, impacted
products
Infringement - claim charts
Prosecution – including prior art
Build it
into your
process
Initial invention review Ranking drives budgets and focus
Continuously update Office actions
Foreign filing decisions
Maintenance decisions
Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 10

11. Patent Quality/Value Indicators
Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 11
Scorecard examples courtesy of Jeremiah Chan, JDS Uniphase

12. Solving for X…
Baseline business
case
• TIM and SIM estimates
• Basic ROI for
monetization
Identify and
understand
patents of interest
• Needs analysis
• Diligence drives value
Understand and
select alternative
uses
• Defend
• License
• Sell
• Drop
Execute
• Authority
• Commitment
• Resources
Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 12

13. Understanding Your Options
Steps Update your business case
Evaluate your options
Test “go to market” theory
Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 13
Option ROI Time to Money Cost Risk
License $$$$ 3-5 years $3-20M High
Defend $$$ 8 years $5-20M High
Sell $$ 6 months $250-500K Low
Drop $ 2 years $0 Low

14. Solving for X…
Baseline business
case
• TIM and SIM estimates
• Basic ROI for
monetization
Identify and
understand
patents of interest
• Needs analysis
• Diligence drives value
Understand and
select alternative
uses
• Defend
• License
• Sell
• Drop
Execute
• Authority
• Commitment
• Resources
Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 14

15. Successful Monetization
Commitment
• Business case and
scenarios define the
needed commitment
• Time to money?
• Risk aversion?
Resources
• Support in marketing, legal,
engineering, sales, finance
• Business case defines your
resource needs
Authority
• Different options require
different support and
authority
• Cross functional buy in?
Finance, marketing,
engineering, sales, execs?
Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 15

16. Monetize Your Patents!
Baseline business
case
• TIM and SIM estimates
• Basic ROI for
monetization
Identify and
understand
patents of interest
• Needs analysis
• Diligence drives value
Understand and
select alternative
uses
• Defend
• License
• Sell
• Drop
Execute
• Authority
• Commitment
• Resources
Rupert Mayer
Craig Opperman
Kent Richardson
Patent Monetization
Page 16