Wealth of Ideas Newsletter, February 2010

In these tough economic times, business owners must learn to do more with less, stretching the resources they have to meet their needs while they try to grow their businesses. Truly effective managers find more efficient ways to manage cash, receivables, inventory and other assets.

But some businesses may be ignoring – or underutilizing – an important source of revenue. Perhaps worse, corporations of all sizes are not utilizing "wasting assets" that are decreasing in value every year, and will eventually become worthless.

We're talking about intellectual property (IP) assets, especially patent portfolios. Patents, once issued, are expensive to maintain because of maintenance fees that must be paid to the Patent Office. So it makes sense to either use those patents, or sell or license them. Or perhaps even strengthen your existing patent portfolio by purchasing more patents.

Which option should you choose for any given patent in your portfolio? That's a good question – and a patent broker can
help answer it.

What Is Patent Brokerage?

Beyond handling patent sales, acquisition of new patents and patent licensing, patent brokerage firms – such as IPOfferings LLC, the newest member of the GPC group of companies – perform patent valuations and can evaluate your IP assets according to internal usage, industry usage of similar technology, and each patent’s licensing potential. IPOfferings also offers a comprehensive package of IP consulting services, such as IP strategy recommendations and implementation.

But as their name implies, patent brokers are best known for finding and matching buyers and sellers, negotiating between them, and helping close the deal. And like real estate or mortgage brokers, patent brokers work on a commission basis when they represent the seller, earning a commission on the revenue they generate for the patent seller.

When to Hold and When to Fold

Many businesses overlook the value of their patent portfolios while continuing to pay maintenance fees that can run into the thousands of dollars. But those patents and other IP could be a significant asset. Effective managers must make the most of every asset, and that includes their patents!

Patents lose their value very quickly, and may not even be worth paying the fees to keep them valid. A patent broker can help identify the patents a company should keep and those it should sell, license, donate or abandon. An internal IP department can certainly handle many of these functions. But when it comes to monetizing patent portfolios, using a patent broker has a number of advantages over doing everything in-house:

• Patent brokers like IPOfferings have an extensive network of patent buyers. You can't sell a patent if you can't find a buyer, and that's where a patent brokerage firm can make a difference.
  
• IPOfferings develops a marketing piece called a “Sales Brokerage Package” to promote the patent(s) it is selling on behalf of a client. This comprehensive package provides the information a prospective buyer needs to thoroughly evaluate and value the patent or portfolio being offered for sale.
  
• On the other hand, if you're looking to buy patents for the purposes of strengthening or expanding your patent portfolio, a patent broker can save you time finding the patents that are the best fit for your portfolio.
  
• Having a patent broker represent you anonymously when you are looking to buy patents can result in a lower price for the patent(s), especially if the buyer is a large organization and the seller sees dollar signs! Also, having a broker represent you anonymously keeps your company’s expansion plans confidential so your competitors are not tipped off to your company’s growth strategy.
  
• Using a patent broker for patent sales, licensing and acquisitions allows business owners to save time and let patent experts handle the time-consuming tasks of research, patent evaluation, patent valuation, prospecting, due diligence, negotiations and other vital aspects of patent portfolio transactions.

Also, make sure your patent broker is a Certified Licensing Professional (CLP). This will insure that you are represented by a qualified IP professional who can both monetize and optimize your IP portfolio.

Patent Brokers and Licensing Programs

A patent broker can either support or invigorate an existing IP program or help implement a new one, recommending an action plan for your company's IP campaigns. A patent brokerage firm like IPOfferings has the advantage of perspective. It comes to your patent portfolio with no pre-conceived notions, takes a fresh look at each patent or other form of IP, and can often identify applications and prospective buyers or licensees you may have overlooked.

In a business environment in which no asset can afford to be wasted, "wasting assets" such as patents must be monetized. And a patent broker is an impartial, experienced third party who can be your partner in making the most of your intellectual property assets.

General Patent Corporation and IPOfferings

In January, GPC acquired IPOfferings LLC, an IP brokerage and consulting firm based in Boca Raton, Florida. In conjunction with the acquisition, Richard Ehrlickman, the founder and President of IPOfferings, was named a Vice President at General Patent Corporation. IPOfferings will function as the patent brokerage subsidiary of IP Holdings LLC.

What does this mean for GPC's clients? Besides continuing to offer patent, trademark and copyright licensing and enforcement on a contingency basis, as well as IP advisory services, we now also offer a more comprehensive package of IP brokerage services.

For more information about our patent brokerage services, contact Rich Ehrlickman at rich@ipofferings.com or 845-368-4000 Ext. 113.