I previously introduced the idea of market trading for patent assets.
I’d like to further elaborate on this idea, because I believe it can offer a viable alternative to traditional means of monetization through licensing and litigation.
For a patent exchange to exist, there would need to be a number of patent holders that supply patent assets to the trading market. A number of questions naturally arise: (1) Who would be the parties to supply the patent exchange? (2) What are incentives to supplying the market, taking into account (i) disadvantages of traditional monetization means and (ii) advantages of a patent trading market? (3) What are the logistics of placing a portfolio on the market, taking into account (i) mechanisms to generate revenue for patent suppliers, (ii) patent portfolio groupings, and (iii) how would patent holder enforce its publically-traded patent against a competitor, if it needed to?
In this post, I’ll be discussing (1) parties that supply the patent assets to the market.
For a patent trading market to exist, there would need to be a variety of a patent portfolios in which to invest. Just as an investor can buy and sell shares of any of a number of companies in the stock market, there would also need to be a number of patent portfolios in which to invest.
The patent portfolios in which to invest would necessarily need to come from patent holders. These patent holders would allow their own patent assets to be publically traded. This will create the supply of patents for the patent exchange.
But is this a far-off concept?
Let’s take Cisco as a case study—it’s a publically traded company with over 10,000 patent assets (including issued patents and patent applications). Because it’s publically traded, if I wanted to own a portion of the company, I could easily purchase the share and own a portion thereof.
If Cisco itself is publically traded, is it such a far stretch to imagine its patent portfolio being publically traded as well?
Rather than a stretch, it seems to be a logical next-step.
As such, publically-traded companies with large patent portfolios could easily supply the patent market. But publically-traded companies aren’t the only ones. Private companies and individual inventors could also place their patents into the exchange as well.
The point to illustrate here is that if a company places itself on the public market, it would not be a stretch to place its patent portfolio on an exchange as well.