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Monetizing Your Patents Ten Techniques for Turning Patents into Profits

Why Monetization is Not Easy n Establishing channels to sell n n products is expensive & takes years. Selling licenses requires a sales team & effort. Infringement is often difficult to detect. Infringers are often difficult to find. Enforcing patents requires armies of lawyers & legal fees. © Source: Knowledgebase at www. astecs. org

Top Ten Techniques 1. Sale of Products 2. Sale of Patents 3. Patent Sale with License Back 4. Selling Patent with Revenue Share 5. Selling Enforcement Rights Only 6. "Friendly" Licensing 7. "Threatening" Licensing 8. "Semi-Threatening" Licensing 9. VC Investment with Strings 10. IP-Backed Loans © Source: Knowledgebase at www. astecs. org

What is a Patent? n The right to exclude, not right to use. n You Do not Have the Rights to Use your own patented invention. n As Elements of your invention may infringe other patents. © Source: Knowledgebase at www. astecs. org Keep Out!

Monetization: Selling Products n "Our products are unique as they are backed by our patents". n Advantages n Product differentiation. n Disadvantages n Restricted by your sales channels. n What’s Involved n Establish complete product sales operation. n Good Candidates n Large corp. with sales channels © Source: Knowledgebase at www. astecs. org

Sale of Patents n "We'll buy your patents outright". n Advantages n Relatively quick & high returns. n Disadvantages n Give up future potential. n What’s Involved n Listing & marketing. n Good Candidates n Patent holders lacking products or sales channels. © Source: Knowledgebase at www. astecs. org

What Patents Sell For Patent Acquisition Value in US$ Industry-standard $1 m+ F Litigated & won Fortune 500 infringers $0. 5 -1 m E Litigated & won Known infringers $100 k-$0. 5 m D $30 k-100 k C Not litigated Broad claims Large market $10 k-30 k B Not litigated No licensees No broad claims $0 A Patent invalidated or expired Several competing buyers Pending (unissued) patent applications: value is triggered when patent is approved. Value is contingent on approval. © Source: Knowledgebase at www. astecs. org

Patent Sale with License Back n "We'll buy your patents and give you a license to continue selling your products that use them". n Advantages n Cash now without giving up product line. n Disadvantages n May enable competitors. n What’s Involved n Listing & marketing patent. n Good Candidates n Product companies without army of lawyers. © Source: Knowledgebase at www. astecs. org

Selling Patent with Revenue Share n "We'll buy your patents and share any subsequent licensing revenue with you". n Advantages n Cash today & cash tomorrow. n Disadvantages n Lower up-front payment. n Can be complicated. n What’s Involved n Sale with revenue sharing agreement. n Good Candidates n Operating companies divesting of infringed patents. © Source: Knowledgebase at www. astecs. org

Selling Enforcement Rights Only n "We'll enforce the patents for you. We pay the costs and split the proceeds with you". n Advantages n Revenue without “selling”. n Disadvantages n May be joined in infringement suits. n What’s Involved n Exclusive license with right to enforce, right to join & indemnification. n Good Candidates n Research labs & universities. © Source: Knowledgebase at www. astecs. org

"Friendly" Licensing n "Would you like to license our patents? “ n Advantages n Reputation as being “nice”. n Disadvantages n Ineffective. n May trigger declaratory judgment suits. n What’s Involved n Searching for licensees. n Often exclusive rights sold. n Good Candidates n Corporate strategic licensing groups. n Academic OTL’s. © Source: Knowledgebase at www. astecs. org

"Threatening" Licensing n "If you don't license we'll sue you for infringement!" n Advantages n Grabs attention. n Can be very effective. n Disadvantages n Led by lawyers. Adversarial. n Costly. n What’s Involved n Finding infringers. Filing lawsuits. Negotiating. n Good Candidates n Corporations with huge legal teams. n Those with little to lose. © Source: Knowledgebase at www. astecs. org

"Semi Threatening" Licensing n "Would you like to license our patents? We do plan to enforce them. “ n Advantages n Can be effective. n Disadvantages n Can confuse the licensee. n Can trigger declaratory judgment suits. n What’s Involved n Identifying infringers & carefully approaching them. n Good Candidates n Patent holder with legal resources to pose threat. © Source: Knowledgebase at www. astecs. org

VC Investment with Strings n "We'll invest in your company if we can partner with you to enforce your patents". n Advantages n Preferential investment terms (to VC). n Disadvantages n May upset your competitors. n What’s Involved n Finding investor, negotiating terms. n Good Candidates n Startups with infringed patents. © Source: Knowledgebase at www. astecs. org

IP Backed Loans n "We can use your patents as collateral for a loan/credit line". n Advantages n Source of debt-capital. n Disadvantages n Encumbers patents. n What’s Involved n Find lender. Valuation. Loan with security. n Good Candidates n Corporations with good credit rating. n Not for small companies. © Source: Knowledgebase at www. astecs. org

Monetizing Your Patents Ten Techniques for Turning Patents into Profits WWW. TYNAX. COM