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for its own technology; it also purchased patents practiced by
companies like AssertCo. AssertCo now found itself in a compli-
cated negotiation facing a counter-assertion demand that put
tens of millions of dollars of its own revenue at risk. In the end,
UnicornCo never paid a license fee. UnicornCo’s investment of
a few million dollars on patents avoided an expected license fee
above $20 million. Overall, the strategy resulted in a very positive
return on investment for UnicornCo.
These examples illustrate one of the primary uses of the patent
market: buying patents to counter-assert and thereby maintain
freedom of action. You can imagine the internal meetings at the
patent asserters in both instances (the CEO admonishes, “You
said they didn’t have any patents to use against us,” and the head
of IP replies, “Umm, we didn’t think they would buy patents . . .”).
This article covers background on the market for buying and
selling patents, how companies decide what to buy or sell, how
companies go about buying and selling, and the future of the market.
Patent Market Basics
What Is the Patent Market?
The patent market is the entire market for buying and selling
“naked” patents—specically, transactions where no other tech-
nology is licensed or transacted. Thus, the market excludes mergers
and acquisitions, patent licensing, and technology licensing. The
size of the patent market is estimated to range from $150 million
to $500 million per year.
The volume of transactions took off when Intellectual Ventures
began buying thousands of patents in the early 2000s.1 Intellec-
tual Ventures spawned an ecosystem of brokers and corporate
sellers that supplied them with patents. By 2012, Intellectual
Ventures had pulled back its buying, but the patent market
ecosystem was well established. Now, both operating compa-
nies and nonpracticing entities (NPEs) regularly purchase and
sell patents to meet their strategic needs.
It is important to understand that the market is not an exchange
(e.g., a stock exchange) or public (e.g., residential real estate in the
U.S. with a multiple listing service website). Rather, it is a quasi-
public market—quasi-public because the market is not perfectly
transparent. If you want to know what packages are available, you
can source them by contacting each individual broker directly, but
doing so is complicated and time-consuming.
Every year, about 600 to 1,000 patent buying opportunities
(called “packages” or “deals”) hit this quasi-public market. Pack-
ages can include one to over a thousand patents. They typically
relate to high-tech products like mobile phones, wireless access
points, social networks, cloud computing, advertising, and nan-
Prices for a package range from less than $25,000
to well over $10 million.
Here is an example of a patent package that is currently for
sale. The package lists two patents,
and the parent provisional
application, related to an intelligent multimedia streaming system
enabling automatically capturing an event of interest to create
a customized digital stream. The package was marketed with
a description of how multiple cameras help enable the system
to create the digital stream. The package was originally sold by
SRI International to Allied Security Trust (AST)4 in 2020, it was
licensed to several AST members, and it is now being brought
back to the market for resale. The asking price is $50,000. This is
a lower price than you might expect; however, the AST members
include some of the largest companies in the world (which would
likely be interested in these patents), so the remaining unlicensed
market may be relatively small.
To better market packages, sellers or their brokers frequently
provide sensitive information under a nondisclosure agreement.
For example, the packages may include protected information
such as an indication of which claims the sellers believe are being
infringed and by whom, and sometimes detailed claim charts.
Brokers provide information about the bidding process and
expected timing of any transaction.
How Is the Market Tracked?
Brokers and some sellers distribute their available patent pack-
ages to potential buyers and list those deals on selling platforms
(e.g., IAM Market). The sellers send out teasers that contain the
information needed to make an initial assessment of whether a
buyer might be interested. Not all packages get distributed to all
potential buyers, but usually brokers do a good job of distributing
teaser information about their available packages.
With anywhere from 50 to 100 new packages coming to the
market every month, a lot of data capture is needed to keep abreast
of what is available. For example, in one database, 10 years of
public and private packages include more than 250,000 patent
assets across more than 13,000 buying opportunities. When you
add up the asking prices of all these potential deals, the price would
be about $38 billion. Typically, the databases capture information
like the seller, the asset list, the asking price, the technology area,
companies of interest, claim charts, and a variety of other data
points that help manage the deluge of packages. That data can
then be supplemented with information about sales, litigation,
and inter partes review (IPR) history. And, if you were thinking
that these databases are treasure troves of fascinating information
about who bought what, when, for about how much, and what
happened, you would be right.
Tracking and studying this market can be complicated, but
there are more and more academic and business publications
reporting on the market. Brian Love et al. published a ve-year
analysis of the market in 2018.5 Also, economists are using the
data to make determinations about innovation rates.
professor Mark Lemley published on characteristics of patents
that are bought on the open market and then litigated.
ally, the authors have published an annual paper on the market
for patents, including pricing and what characteristics of patents
make them more attractive to buyers.8
Why Follow the Market?
For a company actively buying or selling, a primary reason to
follow the market is to bring greater market transparency. Without
Kent Richardson is a partner at Richardson Oliver Law Group,
where he focuses on patent strategy, patent buying, and patent
valuation. He can be reached at email@example.com.
Erik Oliver is a partner at Richardson Oliver Law Group, where
he focuses on patent strategy, patent buying, and patent
valuation. He can be reached at firstname.lastname@example.org.