Jack Ellis

Yesterday saw the opening of All Things Medical, an online auction of patent assets being conducted by a company called ipAuctions, Inc. At time of writing, there are 11 lots of medtech patents and applications up for grabs, including US, European and other national rights.

PRWeb gives the following information regarding the auction:

All lots are focused on the latest diagnostic and therapeutic technologies in the medical industry. They cover a broad range of applications. Participants range from private inventors/owners to major Universities and Corporations. The IP is in varying stages of development, and are ready for the next step towards the goal of utilization and commercialization. Majority of sellers will be available for post-auction consultations. Visit IpAuctions, Inc Home Page to access individual lots for details of the technologies being offered. Each lot contains links to U.S. PTO, WIPO and other worldwide Intellectual Property offices, provided for due diligence and claims research.

First scheduled auction is March 11, 2013. All auction lots will run from Noon PST day 1 to Noon PST day 3. [Eleven] Lots include over 30 patents and patent applications and are scheduled over 3 weeks. Additional lots may be added for late sellers. Bidder registration is simple, IpAuctions™, Inc. does not charge a Buyers Premium. For more information on the listings or to participate in All Things Medical, contact Ms. Davel Foote, 866-826-1300 or dfoote@ipauctions.com

Details of the assets for sale can be viewed here.

This is not the first time that medtech patents have gone under the hammer, but the fact that we now have a medtech-specific auction on our hands highlights increasing interest in that class of patents among investors – and particularly among NPEs, to whom the auction format is arguably most suited.

Patent auctions have met with mixed success in the past. While there have been some big value sales, there have also been plenty of unsold lots. Public auctions can struggle in terms of offering prospective buyers time to undertake prior due diligence on the assets that are up for sale, as would normally be done in the context of a private sale or licensing agreement. This presents a considerable risk factor for operating companies which are primarily in the market for patents that have defensive and/or commercialisation potential.

NPEs, on the other hand, are on the lookout for any patents that they can license to third parties and get a return on, and may see auctions as a good way of identifying rights with such potential. Writing way back in issue 42 of IAM, Tom Ewing of Avancept revealed the identities of the buyers of patents publicly auctioned by Ocean Tomo between 2006 and 2009. He found that 88.8% of the buyers of Ocean Tomo lots were NPEs (including defensive aggregators such as RPX and Open Invention Network), with 75.8% of all lots sold bought by Intellectual Ventures.

Until recently, it would appear that medical technology has not been a major area for NPEs – as January 2013 research from PatentFreedom indicates. But, speaking at the IP Business Congress in Portugal last year, Acacia Research CEO Paul Ryan said that there are considerable opportunities for NPEs in the field due to the possibility of extracting high royalty rates. Acacia has obtained a number of medtech portfolios in the past few years, including the significant acquisition of around 1,900 medical device patents and applications last October from a vendor suggested by Patrick Anderson of PatentCalls to be Boston Scientific.

But if we are seeing the genesis of a new marketplace for medtech patents, then controversy is surely on its way. NPEs already attract masses of criticism; and if they are to begin trading, licensing and enforcing patents covering medical technologies, that anti-troll ire is sure to reach a whole new level, especially if it leads to stories – whether accurate or not – of patients being denied treatments, or having to pay higher prices for them.