Patent Liquidity and Asset Transparency : Clear as Mud
It’s probably a surprise to some that only 2% of all patents are ever transacted each year and, more surprisingly, that over $1 trillion in potential assets are wasted because they fail to extract full value through quality partnerships. It’s indeed sad, wasteful and frustrating. Around the world patents represent a significant asset to businesses and individuals. Unfortunately, because there hasn’t been a central marketplace or registry connecting potential buyers/licensors with patent owners, patent liquidity has been extremely difficult.
Patent liquidity is based on the ability to transact the patent. The first step to any transaction (business or personal) is transparency, knowing that you are dealing with the actual/rightful owner. You wouldn’t buy a house, car, shoes or even a sandwich from someone if you didn’t know what you were getting and know that you were dealing with the owner or legitimate representative of the company would you? Of course not. We expect transparency in every aspect of our daily life – We expect it from our family and friends, from our news sources, from the people we do business with and even ourselves. Transparency is honesty, clarity and it allows us to move all relationships forward.
Unfortunately, there is no transparency in the patent asset class. Patent records are plagued with errors, records are out of date and ownership is difficult if not impossible to establish between the 200 regional and independent patent offices around the world. I challenge anyone to do a simple patent search, look at the assignee and try to make contact. Good luck finding the actual contact information (phone number, address or email) of the owner, it’s not included with the patent record, and in most situations, you will need the assistance of a patent attorney to sort it out for you...And you have to pay for that.
Yet another barrier to patent liquidity is understanding what a patent actually covers. Complete understanding of underlying patent information is challenging for even the experts. Although there are many tools available that provide patent information, at best they only provide limited levels of information, confusing search interfaces, questionable patent references and most of these tools are extremely expensive. JUST determining whether a patent exists in a particular technology area and what specific aspect of the technology the patent covers is expensive and complicated. In this case the unknown or lack of clarity prevents many patents from every being transacted and they remain an illiquid asset.
With the lack of transparency, we lose efficiency. It’s unfortunate that the majority of patent transactions take place in the hands of 3rd parties that are required to sort out patent validity, quality and ownership. This creates massive inefficiency and also increases costs that are a significant barrier to entities that might want to transact on some level but don’t have the knowledge, expertise and resources to hire and sort out the mess. Intelligent tools that use real artificial intelligence, data mining, and predictive analytics would help unlock hidden patent values and benefit everyone. These intelligent tools make decisions on managing/transacting patent assets simple and uncomplicated, and a major step to full liquidity.
The lack of transparency makes doing business in the patent world, expensive, time consuming and generally frustrating – IPwe is going to change all that.
At IPwe we are going to clear the water and add a new level of transparency and liquidity to the patent world. Our global, open, owner-verified patent registry is truly revolutionary. We provide ground-breaking analytics tools (Zuse) to do intelligent patent research on owner-verified patents so you know you are dealing with the legal owner and the verified contact information so you can conduct real business. As a patent owner this level of transparency is the key to attracting potential buyers/licensees. When people can find you and know who you are they are much more likely to initiate contact, discussion and business. If you’re looking to buy or license a patent, once again, knowing exactly what you are buying, what it covers and who you are buying it from is the very foundation of an efficient transaction. The IPwe Platform is built from the ground up with patent transactions in mind, we provide complete asset transparency and remove the complexity from the patent ecosystem.
This will allow patents to be an asset class so that innovators, including SMEs and universities, can better protect -and finance- their ideas.