Recently, the auctions arm of Ocean Tomo, LLC, announced the results of its 2008 European Live IP Auction held on 26th June at the NH Grand Hotel Krasnapolsky. Cumulative sales, including buyer’s premium, totaled $12.6 M, with an average sale price per lot of $437,036, with further transactions anticipated to close in the coming weeks. Further according to press release, for the first time the auction was viewed by several hundred people in closed-circuit locally-hosted events in Singapore, Tokyo, Bangalore, and Seoul. (http://www.businesswire.com/)
This kept me wondering about future of IP trade. Undoubtedly, “The value of an Idea lies in the art of using it”. So are we at the advent of patent auction as a tool for IP trade and business?
Almost 98% of the issued patents (almost 150,000 every year in US itself) are never commercialized. The one reason for this is that patent comes before the sale or commercialization. In today’s market driven world the interest of the patentee also changes with the time and more often patentee do not commercialize their patents as they often give priority to other inventions. This eventually leaves large number of patent files in one’s portfolio as fish files.
Patent auction is a fast way to sell or license such patents. The nature of the patent right creates a big imbalance in terms of knowledge between owner of the patent and the purchaser or licensee; the latter party can minimize the risk of purchasing or licensing a "zero" or low value patent by receiving sufficient time to investigate the patents.
Apart from above-mentioned Ocean Tomo, LLC, there are several other websites, which also provide opportunity to auction the patents. These are http://www.freepatentauction.com/, http://www.ipauctions.com/, http://www.ipmarket.com/, and http://www.shop4patents.com/.
Many companies might believe that patent auction is a swift and effective way to find a purchaser or a licensee for their IP rights. After all, intellectual property is an indispensable asset to companies.
However, though the patent auction has potential to become an effective way for inventors and companies to market and monetize their patents, some critics fear that the auction would only fuel patent trolls, who have no plans to practice the patent, but rather make all their money from licensing, often under threat of litigation. It would be evident from recent Blackberry case that companies are very sensitive to patent trolls. The other blocking aspect for patent auction is that inventors are often attached to their inventions and expect relatively big bucks for their invention.
Notwithstanding the pros and cons of the patent auction, I indeed believe that this could be the wave of the future for monetizing intellectual property, a mechanism for bringing more tangible value and a lucrative market to intellectual property.
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