In many cases our response may sound rather disappointing, basically telling the party that approached us, that we are not entertaining sales of individual patents or very small portfolios as this will be either impossible, too costly, or both. The biggest problem is that patent owners who want to sell a patent think that they are guaranteed a quick payoff for their patented invention without doing thorough homework and preparations themselves.
Let us give you some thoughts before you enter into a sales pitch.
Firstly prospective sellers of patents do not do their homework well or not at all. Unlike many assets that are commonly sold, patents are not easy assets to sell for reasons we will elaborate on here. Immovable property (e.g. a house) can be sold as both the sales rules and the market are pretty organized and regulated. Secondhand household stuff can also equally be sold, so are cars and personal valuables via many online market platforms.
Disappointing: most patents are worthless
Most patent owners are proud of their inventions (why else would you spend a lot of effort and money into getting a patent from the Patent Offices in the world) but the sad reality is that most, we dare to say 90% of, granted patents, are worthless. That is not what a party newly awarded a monopoly right wants to hear. The truth is, however, that “value” is mostly what drives people to patent their invention, getting the reward for their efforts and ingenuity. As soon as they want to “monetize” that value- so sell their patent – the situation becomes complicated. According to our experience only is very rare cases do companies or private people buy a patent voluntarily, that means without forcing them to do so, e.g. by accusing of infringement. For that reason, patent aggregators are best equipped to sell the patent (so, companies that buy up patents that look promising to approach certain 3rd parties to force them into buying or licensing, otherwise known as patent trolls). Although IPEG consultants are experts in their technical fields, we lack the capability to make claim charts or do thorough market research. If we are engaged, we need 3rd parties to do that for us (or the client directly). IPEG is not an aggregator, as just described.
Claim charts and analysis
Important for any sales is that the seller makes so-called “claim charts” a technical and legal analysis of all the steps mentioned in the claim(s) of the patent to show -with proof – that a particular party – mostly the party to whom you want to sell or license – is using the patent. However, even if a party can be shown to use the patented invention and is being approached to buy the patent, will, in 99% of the cases) come up with nullity arguments so as to evade the patent. The patent owner has then to go to court to get a judgment that the patent is being infringed. Costly, and more importantly, almost an open invitation for the defendant -the potential buyer- to try to invalidate the patent.
IPEG does not sell individual patents (families).
That is why we have decided a long time ago not to engage IPEG in selling one patent unless there has been done great homework, like claim charts, market analysis and thorough analysis of the potential licensees or buyers of the patents. IPEG may be able to assist the seller but only if and when some of the information described as well as market analysis has been provided by the party approaching us. In that case, we work (only) on an hourly basis and payment upfront, which makes IPEG’s involvement a high-risk, high-costs engagement. Any sale of a patent will be roughly between US$ 10,000 and US$150,000 depending on the patent, the analysis already done by the seller, the market, the strength of the patents etc. This is however a very rough and many times inaccurate estimate as circumstances of a sale vary.
1. Do not over-estimate the strength of your patent. You may be proud to have been rewarded a patent, but this does NOT mean it has indeed value
2. You nor any party you engage will be able to sell your patent without doing extensive homework
3. If you look for a 3rd party to assist you in selling, forcefully pitch your patent as a unique and powerful tool showing that a party (or parties) (must) use the patented invention with detailed proof.
3. Do not expect IPEG, to take on an offer to sell on a no-cure-no-pay basis. Selling your patent is costly both in terms of time and money
4. Be prepared for a counterattack when you approach a party to sell your patent: work on a thorough validity search and do not (only) rely on the novelty search the Patent Office did (as a part of the application procedure).
5. Have a considerable sales budget before even thinking of selling your patent(s).