February 10, 2009
Some Recent Thoughts on Selling Patents
Yesterday, I received the following e-mail from John Lynn, the president of a patent incubator of sorts called Discovery Alliance:
Do you have any patents or patent applications that you are interested in liquidating?
I am writing to you as a Chapter 7 trustee. If any of your Chapter 7 clients have intellectual property you need to liquidate, we can help. Discovery Alliance is purchasing patents and patent applications.
We are a subsidiary of Capital Southwest, a well respected, publicly traded investment company (NASDAQ; CSWC) and we are experts on patents. Accordingly, we can quickly make a decision on the potential value of your patents or patent applications
I have to admit that in my role as a chapter 7 trustee, good patents don't come across my desk all that often. Occasionally, I get a gig liquidating one for some other trustee. I have marketed and sold a couple over the years, and finding buyers can be tough. More and more though, I am hearing about this kind of buyer - the company that for profit or otherwise is interested in picking up patents for speculative or other reasons.
There are a few patent exchanges out there. Tynax and Ocean Tomo come to mind. Neither seems quite suitable for use by the chapter 7 trustee trying to liquidate a relatively valueless patent owned by some small start-up or investor.
Patent trolls exist, but the patent better have some serious value to interest them. They have no use for the patent unless it provides the prospect for at least a few million in licensing fees. Similarly, the consortiums developed to keep key patents away from the trolls (such as RPX Rational Patent and Allied Security Trust) are only interested in the key patents.
Discovery Alliance seems a little different. According to a September 2008 press release, the company plans to identify and invest in IP for the purpose of commercializing the technology. It will focus primarily on patents that fit the existing business plans of its parent's affiliates. And, reaching out to chapter 7 trustees seems a little entrepreneurial, so perhaps they will find a role acting as a stalking horse bidder.
Labels: allied security trust, discovery alliance, ocean tomo, patents, rpx rational patent, tynax
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