Asian brokers made a patent market breakthrough in 2016, signalling future growth potential 13 Jan 17
The most recent issue of IAM features our annual appraisal of the past year’s brokered patent market, put together by Kent Richardson, Erik Oliver and Michael Costa of ROL Group. Subscribers can read the full article here. The bottom line, according to the authors, is that while the marketplace for patent assets hit a low ebb in 2016 – with overall market value estimated at $165 million, around a third less than the previous year – it remains “robust and viable”.
Sales continue to happen and there is more fluidity, in thanks partly to the arrival on the scene of the Allied Security Trust-led Industry Patent Purchase Programme (IP3) and IAM-affiliated transactions platform IAM Market. Nevertheless, prices are as low as they have ever been; and, predictably, the US Supreme Court’s Alice decision has continued to have a destructive effect on demand for certain types of software-related patents – and those covering fintech innovations in particular.
The situation as it stands probably aligns pretty closely to what many working in the IP world will have been expecting. But beyond this, some interesting new trends appear to be emerging in the patent transactions marketplace.
Each year, Richardson, Oliver and Costa include with their analysis a listing of all the brokers that are known to have offered more than a certain number of packages for sale during the examined 12-month period (for the past three editions, that threshold has been set at five or more packages). As such, this gives an indication of which brokers have been the busiest over the past year.
In 2016, 29 brokers offered five or more packages for sale, with 15 of these offering at least 10. Of particular note, four of the 29 brokers are headquartered in Asia. That’s the highest number of Asian brokers to appear on the annual list since ROL Group began conducting this research back in 2012. The four are:
- IP Pioneer Group (Seoul, Korea)
- MiiCs & Partners (Taipei, Taiwan)
- PJ Parker & Co (Tokyo, Japan)
- Rui Zhi Ventures (Shanghai, China)
Except for Rui Zhi Ventures, which also made the 2015 list, this marks the first time that any of these providers have been known to offer at least five packages for sale. (Other Asia-based brokers to have appeared in the past are Transpacific IP on the 2013 list and Intellectual Property Trade in 2015. Both are headquartered in Singapore.)
Of course, one doesn’t need to be based in Asia in order to broker patents there. But the growing footprint of intermediaries founded and located in major Asian cities would seem to have some significance.
For one thing, Asian companies appear to be increasingly active participants in the brokered market, especially on the buy side. In their analysis, ROL Group lists NEC and Panasonic of Japan among 2016’s repeat sellers of patents via intermediaries; while Huawei and Xiaomi from China, Japan’s Rakuten, Korea’s Intellectual Discovery and TSMC from Taiwan each purchased at least two or more brokered packages over the course of the year.
Moreover, some of the potential hurdles that the Asia-Pacific can present in terms of language, corporate culture and time zones for a Europe or North America-based broker are much more easily overcome by one that has a permanent presence on the ground in the region. Being located just a short-haul flight away – or even a taxi or metro ride, if they are in the same city – from prospective clients can make all the difference. The ability to cultivate a face-to-face relationship with a business partner is all-important in Asia – and actually being there and speaking the same language is going to put one at a clear advantage over competitors situated elsewhere in the world. And with Asian corporate and investor interest in patent assets on the rise, any edge over the competition will prove to be crucial.
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