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Our Role in the Patent Market
Oso IP’s role in the patent market is to secure capital to bolster patent families exclusively for licensing the resulting patents. By way of background, in addition to protecting their products/services (if any), patent owners can monetize their patents by either 1) selling, or 2) licensing their patents.
Selling
Some companies [e.g. non-practicing entities (NPEs), small operating companies, etc.] typically buy patents for the ability to enforce them, while other companies (e.g. larger corporations, etc.) buy patents to remove the risk of such patents being asserted against them. Because of recently-erected hurdles to patent enforcement (by Congress and the Supreme Court), patents generally pose less “reward” opportunity for those who buy such patents for assertion, and less “risk” for those who buy them to avoid such risk. In effect, this dynamic has led to the average patent purchase price being depressed, as compared to average patent sale prices from over a decade ago.
Third-party information on patent sale statistics (e.g. average sales price) can be found here: (link)
Licensing
Patents are typically licensed for far larger dollar amounts as compared to what they can be sold for (10-100X), because licensing (and the typically-required assertion) takes significant time and capital, both of which (along with the patent itself) are put at risk of succumbing to the hurdles mentioned above.
A comparison of risk, reward, and timeframes for patent sales vs. licensing, is illustrated in the following chart and table.
Diagram comparing a Patent Sale vs. Patent License in terms of 1) risk, 2), reward, and 3) time
| PATENT SALE | PATENT LICENSE | |
|---|---|---|
| Risk | Risk of No Sale (No Assertion Required) | Risk of Losing Patent (Since Assertion Typically Required) |
| Size-of-Return | Typically 6-to-low-7-Digit Returns | Ten-One Hundred Fold (10-100X), as Compared to a Patent Sale |
| Time-to-Money | Can be < 1 year | Can be 2-5+ years |
Oso IP secures capital exclusively for investing in the “long game” of licensing in the pursuit of maximum returns. To mitigate the associated risk and thereby maximize success, Oso IP engages in the “longer game” by securing investment for patent portfolio build-out not only before patent assertion, but also during patent assertion.