IP Monetization

Strategic Patent Monetization

Every IP asset requires a unique IP monetization strategy as there is no single true method that can work for every asset, company and industry. Prior to embarking on your strategy, it’s important to identify your goals and objectives, starting broadly and then funneling down to more specific ones. Some examples of broad goals include generating revenue, recouping the investment that was put into the research and development of the patents, ensuring competitive advantage and building recognition as an industry innovation leader. Once you start building your IP strategy, you must determine the value of your patents and how strong your patents’ claims are, as well as engage in competitive analysis to understand other companies that may be infringing on your patents.

Which Patents Should You Monetize?

If you have a large patent portfolio, selecting which patents to monetize requires an analysis of your patents to determine which ones are most likely to be commercially viable and valuable, taking into account the value of the patent (ideally leveraging a database of IP transactions rather than leaving it to the courts to determine value through costly litigation), whether the patent is being infringed and the depth of the infringement, the strength of the patent as determined by novelty and non-obviousness and lastly whether the patent covers core versus non-core technology.  With respect to the latter, while most companies have focused on monetizing non-core technology in order to generate revenue from an underperforming or non-performing asset, monetizing core patents has increasingly become a central part of many companies’ monetization strategy.  Even if you have a small patent portfolio, it is important to be selective in which patents you choose to monetize as you will have a limited budget to work with.

What Are Your Options For Selecting The Optimal Monetization Strategy

Whether you choose direct or indirect, your company can make money from both options – it’s up to you to determine which one is a better fit. With direct licensing, your company will maintain the ownership of the patent and will be control of decisions. By maintaining ownership, your company will receive a higher ROI. However, it’s important to note that with direct licensing, you are spending more money, which isn’t ideal for organizations with a tight IP budget. Turning to indirect licensing, your company has the option to transfer its assets to a third party to take over the monetization process. Indirect licensing is an inexpensive option and while you will see a return, it will be a lower rate.

Take advantage of both your core and noncore assets. Noncore assets should be included in your IP monetization strategy. Since your business no longer actively uses them, you may opt to leverage them, selling them to pay off debt or invest in other areas. Your company’s core assets are extremely valuable and should be patented. While patenting core assets does have a higher risk of being tried by competing companies, there is also a higher reward as you have invested more of your money in them.

Do you have more IP monetization strategies and tips? Join the IP Law & Management Institute Group on LinkedIn and share your expertise and get the conversation flowing. Further, in the group you can request your invite to the IP Law & Management Institute, taking place from November 6th – 8th 2016 at The Four Seasons Westlake Village, CA. Here, Chief IP Counsel and VPs of Intellectual Property from Adobe, SanDisk, Lenovo, BASF, Coca-Cola, Verizon, HP, GE Digital, GoPro, GE Healthcare, Etsy, GoDaddy and Cisco (to name a few) will come together to discuss global monetization strategies, advanced patent portfolio strategies, reducing IP expenses, open source software, tips for In-House Counsel, online trademark reform, protecting IP in a weakened patent system, and more.