Many rights holders are unaware that their intellectual property assets could generate a hassle free ongoing revenue stream for years to come. Technology businesses have been doing this for years and it is the main driver behind many companies that have pursued aggressive patent purchasing strategies. Like dragons they sit on their hoarded patents and charge an on ongoing licence fee for others to use the technologies.
A troll by any other name…..
The activities of some unscrupulous patent holders have lead to this practice being referred to as patent trolling. However when the world’s biggest patent dragons derive a large source of their income from this practice, yes we are talking about Google, Samsung, Apple and Microsoft, it is called good business. Lets face it, dragons are so much more glamorous than trolls.
An example of this practice in action can be seen from this recent tale from the Nokia patent hoard. Nokia may have retired from the global phone market, but it’s still got a pension to collect in the form of patent licenses from decades of R&D. Nokia says it has spent more than €50 billion on R&D over the past two decades, collecting some 30,000 individual patents in the process.
The company has announced that it has settled a dispute with Samsung over the licensing of its technologies, boosting the Finnish firm’s bottom line by hundreds of millions of euros. Nokia’s dedicated patent unit, Nokia Technologies, says it expects sales of around €1.02 billion ($1.1 billion) in 2015 following the deal, with an additional €1.3 billion ($1.4 billion) in the years 2016 to 2018.
This money is being made on mobile phone technology by a company that sold its mobile phone department in 2013 to Microsoft. What Nokia have done is provide for their future by strategically using the valuable Patent portfolio they have amassed. Clever dragons indeed.
Lessons from the den
Recently I was watching an episode of Dragons Den. One great pitch was a business that involved the manufacture and selling of a patented spray tanning tent. In the pitch it was mentioned that a major player in the tanning industry was interested in purchasing the tent. A reasonable offer had been made and rejected by the business owner. Deborah Meaden immediately made a crucial point that should stand as a lesson to any IP owner. Why had the business not considered licensing the product to create a lucrative hassle free income stream? There was no answer to this question other that the business had got pound signs in its eyes and turned down a great opportunity. They had completely missed their chance to become an IP dragon. At this point the chance of investment from the regular dragons was lost.
Become the dragon you always wanted to be
There is a lesson here for any business that has intellectual property assets. Rather than looking at the quick return on investment asset owners could instead look to the future. It is the very nature of IP that as assets get older they gather goodwill and in the case of patents, can have new technologies that are reliant on them.
Instead of selling your IP assets consider making a commercial agreement that will give you a steady income with minimum or no effort on your part. It really is the perfect arrangement. Of course this may not be suitable or all intellectual property and you should consult an IP expert before starting your hoard and putting on that dragon costume from your closet.
The experts at Virtuoso Legal are experts in this area and would be happy to discuss your dragon ambitions over the phone. If becoming an IP dragon something that interests you simply call 0113 237 9900.