The patent selling process
Preparation: Portfolio analysis and evaluation
The first step in the patent sale process is to assess the sale value of the candidate patents. For large portfolios, patents are first ranked based on one of the available patent quality metrics. Approximately the top 20% of patents are then selected for review by human subject matter experts (SMEs). The SMEs assess the potential sale value based on several criteria, including the technology area, technical contribution, quality of the patent claims, market size of the product related to the patent, the difficulty of “working around” the patent claims to avoid infringement, and the cost and difficulty of preparing evidence of use by the product. Because every patent is unique and every potential buyer places a different value on a particular patent, patent sale valuations are not precise. They are a rough guide to the expected sale price of that patent.
Once the patent evaluation is complete, it is worth revisiting the entire portfolio you are selling. Does it contain enough high-value patents to be attractive to a buyer? Should you remove some of the less valuable patents from the portfolio and abandon them?
Market research: Identifying buyers
To find buyers, we first analyze the technology field and industry trends of the patent. Then, we identify markets where the patent can be exploited and make a list of potential buyers. We also create evidence-of-use claims charts for major products in the market. Finally, we expand the buyer list from potential infringers to competitors, suppliers, and customers.
Contacting potential buyers
Contact the IP departments of target companies and send them a brief about the patent purchase opportunity, inviting expressions of interest.
Price Negotiation
After companies express interest in our patent portfolio, we negotiate the price. If only one company is interested in our portfolio, we negotiate the price one-on-one. If multiple companies express interest, we hold multiple auctions to obtain the highest bid.
Contract Negotiations: Terms
After a price offer is accepted, one of the two parties will present a proposed purchase and sale agreement. This agreement will be the basis for negotiating the terms of the sale. Common areas of discussion and negotiation include the right to license back to the seller to ensure that the seller does not infringe its own patents after the patents are transferred to the new owner, how to disclose existing licenses, assistance in registering the new owner with the country’s patent office, and the extent to which the seller should support the buyer if the patent becomes the subject of litigation.
Patent evaluation methods and key points
Patent value measurement criteria
When assessing patent value, it is useful to evaluate technical strength, legal strength, and market applicability. In each of these areas, there are commercially available metrics based on patent bibliographic data and, more recently, AI evaluations. However, evaluations by human experts provide the most reliable and insightful results.
Interpretation and use of evaluation results
A good patent valuation involves both quantitative and qualitative assessments that consider factors such as market position, competitors, future market potential, etc. Proper interpretation and use of the valuation results can help you strategically strengthen your patent portfolio and evaluate which patents are suitable for sale or licensing.
Interpretation
To fully understand the assessment results, you need to know the assessment criteria and evaluation methods. We analyze patents from multiple perspectives, such as their originality, validity, technical value, and competitiveness in the market.
Utilization
The assessment results are useful for adjusting patent portfolios and formulating strategies. For example, highly evaluated patents can be used for strategic decision-making, such as actively pursuing technology licensing negotiations and considering selling or abandoning low-evaluated patents.
Accurate interpretation of the assessment results and strategic use of them can maximize the value of your patent portfolio and strengthen your company’s competitiveness.
Use of patent brokerage services
Patent brokerage services are services that support patent transactions. Patent brokers are skilled in evaluating patents, creating marketing materials that explain the value of patents, finding companies interested in purchasing specific patents, and negotiating the price and other terms of the patent sale. These services streamline the buying and selling process. In some cases, services are offered on a completely contingency fee basis, with no fees paid until a sale is made.
Selection criteria and points to note
Experience and credibility are key factors when selecting a patent brokerage service. Check the service provider’s past success stories and the types of clients they have represented. Familiarity with the type of technology and industry are also important selection criteria.
Also, check the patent broker’s fees and terms and conditions before selecting one.
