In this IP-driven age, it is common for companies to monetize their IP portfolio to generate revenue. Generally, IP is monetized via two methods – sales and licensing. However, before you start monetizing your IP assets, it is advisable to thoroughly evaluate your options and decide whether monetizing your IP assets via sales or licensing is the right way to go. Read on to discover how Sagacious IP helped a Fortune 100 giant to avoid potential loss by analysing the IP licensing route.

IP Monetization

IP monetization refers to the generation of revenue from IP assets such as patents, copyrights, and trademarks. Among these assets, companies usually monetize their patents to generate revenue. As mentioned above, patents can be monetized either via licensing or sales. In patent sales, the ownership of patents is transferred to a person/company for a mutually agreed amount. However, in patent licensing, owners retain the rights to their patents but license them in return for a royalty payment related to product sales.

Macro-Level Analysis – A Novel Approach by Sagacious IP

At Sagacious IP, we have developed an innovative approach called macro-level analysis to perform a detailed analysis on a small subset of patents. This approach primarily gives insights into the actual number of potential assets in an IP portfolio.

To understand this approach better, let us assume we have a set of 1000 patents. At the outset, we would perform an automated ranking using which the number of patents would be reduced to 250 best-scored patents. Thereafter, we would perform T-ranking which involves a quick title, abstract, and claim (TAC) based screening of the patents and mark them as T1, T2, and T3 to identify patents with high relevance and probability of being infringed. Using T-ranking, we would get nearly 50 T1-ranked patents. Next, a detailed (micro-level) analysis would be conducted on T1-ranked patents to mark them as high (H), medium (M), and low (L) based on the infringement potential as seen in product search. This shows that using automated ranking and T-ranking, we can reduce 1000 patents to nearly 50 patents, thereby saving time and money.

Case Study

A Fortune 100 client engaged Sagacious IP for a custom project wherein they wanted to monetize their IP portfolio via licensing route in the payment domain. They were keen to license their portfolio to some companies. The client believed that licensing was a good opportunity for them to monetize their IP portfolio against these companies as they were neither the client’s direct competitors nor had any counter assertion potential.

As part of the project, our team implemented the macro-level approach. After performing T-ranking, the team identified patents that were relevant for these companies, as well as those which were not relevant to any of them. Furthermore, using detailed analysis, the team identified mappable patents, i.e., patents on which we could generate detailed charts and patents on which we could generate high-level charts. We believe that for a good licensing program one should have around six to eight detailed charts (EoU charts) against a company. After our analysis, the client realized that their portfolio was not strong enough for a licensing program against any of these companies. Hence, they dropped their plan of licensing and decided to find better alternatives to optimize their portfolio for monetary gains.

Final Thoughts

It is a common practice among companies to expand and venture into a new business domain. Though there are multiple routes for doing so, licensing is one of the most popular one. Before choosing this route, however, it is important to weigh your options and decide if it is suitable for your business plan. Sagacious IP’s Patent Licensing and Monetization service offers holistic solutions including patent ranking and identification of potential licensees. This allows companies to convert their IP into a revenue generation unit. Click here to know more about the service and click here for webinar on the topic.

-Aman Goyal (ICT Licensing) and the Editorial Team

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