IP Management

IPEG is working on IP management issues in a particularly challenging time. Looking into the strong after-effects of the financial crisis and economic downturn, we see two trends. The IP sellers market has a tendency to be overheated and runs the risk of breaking down for some time to come, in the absence of more strategic buyers (like Coller IP Capital, GE, Intellectual Ventures, InterDigital, etc); or there will be a major new focus by CFOs on their companies’ intangible assets (with the aim of monetizing existing IP positions). IPEG believes that the latter is more likely to happen for the next years to come. After all economic downturn also means that patent portfolios come cheaper then they are one or two years ago. For buyers of IP, a potentially more effective route, however, would be to consider all-out corporate acquisitions (especially if opportunities exist to acquire smaller public companies whose share price is depressed). If liquidity becomes short for a while – or if a long-lasting recession takes place − companies will most likely react by toning down R&D activity. If this happens, they will generate less valuable patents and/or cash in parts of their IP portfolio. That results in a buyer’s market for IP.

If more IP holders try to go for licences, then they will all eventually have to share in whatever money is available. To argue by extreme extrapolation: we cannot imagine licence payments going up by a factor of 20 throughout industry. The resulting inflation would force a change in legislation. Therefore, this kind of activity will most probably be limited. The story is different where weapons of defence are concerned. If the trolls force licensing too much, or if they become too many, the problem of trolls will find a solution in legislation (a process that is already underway following 2007’s US Supreme Court decisions). Independent of the financial crisis, it looks as if we could see an IP asset bubble over the next five to 10 years, followed by a change in IP legislation. It is already impossible today to clean a complex technology of external IP, or at least to assess and quantify the risk of stepping into a trap. The number of worldwide patent applications is growing rapidly and with the coming more widespread use of IP rights (to make money) and a changed risk perception among investors driven by the financial crisis, a doom scenario can be imagined where high-tech investment comes to a stop.

It is in this hugely challenging environment that IPEG undertakes it’s task of IP management and IP marketing of the technologies in the portfolio of its partners and customers.