Monday, 10 October 2016

Can a commodity be reluctant to be commoditised? Early news of IP3

Back in May of this year, a good deal of attention was directed to the IP3 initiative -- officially called the Industry Patent Purchase Program -- which was designed to make the sale of patents swifter and simpler by imposing an arbitrary set of deal-making criteria [see, for example, the earlier Aistemos blogposts here and here].  Five months later, with a much smaller fanfare, the initial results of this transactional experiment have been published [for an excellent overview and some helpful factual material see Richard Lloyd's post on the IAM blog, here].

It would appear from the USPTO assignment database that so far just 78 US patents and applications have changed hands, a figure which may be disappointingly low, given IP3's aspiration to facilitate the sale of not merely individual patents but entire patent families.  That database cannot show how many IP owners had initially sought to sell their patents through IP3, but it may be conjectured that that number was not high, given (i) reluctance to be guinea-pigs for a hitherto-untested initiative, (ii) the short lead time for sellers to evaluate the relative advantages of taking the IP3 route, using other disposal methods or retaining the patents for other purposes, and (iii) criticism of the actual drafting of the IP3 scheme, as articulated by leading transaction experts such as Mark Anderson [here].

It is too early to draw long-term conclusions from these early-day dabblings in the creation and operation of markets for the disposal and acquisition of patents.  In the short term, all we can say is that patents are a sui generis asset class and little or nothing of relevance can be gleaned from the study of other, longer established asset classes. In short, patents are commodities but they are proving exceedingly hard to commoditise.

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