FIVE STRATEGIES TO MONETIZE YOUR PATENT PORTFOLIO ON

A SMALL CLIENT BUDGET

Michael A. Shimokaji

WWW.SHIMOKAJI.COM1

OVERVIEW

• PORTFOLIO ASSESSMENT

• LICENSING OR SALE – PATENT BROKER

• LICENSING OR SALE – DO IT YOURSELF

• LITIGATION – NONPRACTICING ENTITY

• LITIGATION – DO IT YOURSELF

WWW.SHIMOKAJI.COM

PORTFOLIO ASSESSMENT

• What’s In Your Portfolio

Group patents by technology

For each group –

How many US patents/applications

How many foreign patents/applications

WWW.SHIMOKAJI.COM3

PORTFOLIO ASSESSMENT

• Who Are Your Primary Competitors

For each group of your patents –

Who are the primary US competitors

Who are the primary foreign competitors

WWW.SHIMOKAJI.COM4

PORTFOLIO ASSESSMENT

• Who Are Your Primary Competitors

Factors to consider –

Number of patents in technology area

Number of forward citations of your patents

WWW.SHIMOKAJI.COM5

PORTFOLIO ASSESSMENT

• What is the Market Size

For each technology group –

Number of product units being sold by all

Gross revenue being generated by all

WWW.SHIMOKAJI.COM6

PORTFOLIO ASSESSMENT

• Who/What is Infringing Your Portfolio

Claim charts are needed –

Prepared by a patent professional, not client

Neutral presentation, not as an advocate

WWW.SHIMOKAJI.COM7

PORTFOLIO ASSESSMENT

• If No Infringement Found

Next strategy steps will be difficult to achieve

WWW.SHIMOKAJI.COM8

LICENSING OR SALEPATENT BROKER

• What is a Patent Broker

Assist buyers and sellers of patent portfolios

Some only represent sellers

Most are NOT interested in licensing

WWW.SHIMOKAJI.COM9

LICENSING OR SALEPATENT BROKER

• What Value Does a Patent Broker Provide

Access to known buyers and sellers

Marketing and sales infrastructure

Marketing and sales expertise

Eliminates your time commitment

WWW.SHIMOKAJI.COM10

LICENSING OR SALEPATENT BROKER

• What Do Patent Brokers Charge

Most charge a success fee based on a percentage of the transaction price

Percentages vary – in the range of 15% to 35%

Out of pocket costs (e.g., marketing) are not extra

WWW.SHIMOKAJI.COM11

LICENSING OR SALEPATENT BROKER

• What Do Patent Brokers Charge

Some charge an up front fee

Fees vary – up to around $25K

WWW.SHIMOKAJI.COM12

LICENSING OR SALEPATENT BROKER

• What Do Patent Brokers Look For

Evidence of use/infringement

Standard essential patents

Large revenue market

High tech portfolios

WWW.SHIMOKAJI.COM13

LICENSING OR SALEDO IT YOURSELF

• Why Do It Yourself

Save money on the broker fee

Your portfolio is not what a broker seeks

WWW.SHIMOKAJI.COM14

LICENSING OR SALEDO IT YOURSELF

• How To Do It Yourself

Create marketing package – why a buyer should buy

Why should a buyer buy your portfolio

WWW.SHIMOKAJI.COM15

LICENSING OR SALEDO IT YOURSELF

• How To Do It Yourself

Identify potential buyers

Your competitors

Patentees who have cited your patents

Non-practicing entities

WWW.SHIMOKAJI.COM16

LICENSING OR SALEDO IT YOURSELF

• How To Do It Yourself

Establish a sales price

Comparable sales

WWW.SHIMOKAJI.COM17

LICENSING OR SALEDO IT YOURSELF

• How To Do It Yourself

Establish a sales mechanism

Offer at an established price

Take all bids

WWW.SHIMOKAJI.COM18

LICENSING OR SALEDO IT YOURSELF

• How To Do It Yourself

Negotiate and close

WWW.SHIMOKAJI.COM19

LITIGATIONNON-PRACTICING ENTITY

• What is a Non-Practicing Entity

They come in many forms

Some aggregate patents for defensive purposes

Others are combinations of operating companies

WWW.SHIMOKAJI.COM20

LITIGATIONNON-PRACTICING ENTITY

• What Value Does an NPE Provide

Similar to patent brokers

Saves you time

Saves you up front out of pocket costs

WWW.SHIMOKAJI.COM21

LITIGATIONNON-PRACTICING ENTITY

• What Value Does an NPE Provide

Similar to patent brokers

Provides insulation against counterclaims

Provides litigation management expertise

WWW.SHIMOKAJI.COM22

LITIGATIONNON-PRACTICING ENTITY

• What Do NPEs Charge

Varies – But Often a Percentage of Net Recovery

Percentage may be 40% or more

WWW.SHIMOKAJI.COM23

LITIGATIONNON-PRACTICING ENTITY

• What Do NPEs Look For

Same as patent brokers

But with greater emphasis on infringement

WWW.SHIMOKAJI.COM24

LITIGATIONDO IT YOURSELF

• Why Do It Yourself

Save money on the NPE fee

Your portfolio is not what an NPE seeks

WWW.SHIMOKAJI.COM25

LITIGATIONDO IT YOURSELF

• How To Do It Yourself

Create a marketing package – FOR ATTORNEYS

Emphasis on claim charts

WWW.SHIMOKAJI.COM26

LITIGATIONDO IT YOURSELF

• How To Do It Yourself

You want to “sell” your case to a contingency law firm

Make the law firm’s due diligence easy

WWW.SHIMOKAJI.COM27

LITIGATIONDO IT YOURSELF

• How To Do It Yourself

Identify potential law firms

Internet search

Referrals from your patent prosecution counsel

WWW.SHIMOKAJI.COM28

LITIGATIONDO IT YOURSELF

• How To Do It Yourself

“Sales” mechanism

Smile and dial

WWW.SHIMOKAJI.COM29

LITIGATIONDO IT YOURSELF

• How To Do It Yourself

Concurrent licensing and litigation

Some infringers resolved through licensing

Other infringers resolved through litigation

WWW.SHIMOKAJI.COM30

QUESTIONS

WWW.SHIMOKAJI.COM31