The Continuing Lack of a Formal IP Marketplace
As IP has increased in both strategic importance and value over the past two decades, the need for a stable marketplace has become ever more obvious. Looking back from the beginning of the second decade of the twenty-first century, it is clear that the IP community has not yet achieved this goal.
During the late 1990s a number of companies were formed, each offering its own version of an online marketplace for transacting intellectual property exchanges. For a variety of reasons, most of these companies no longer exist.
By the year 2000, IP monetization was still in its infancy—and generally limited to carrot-or-stick licensing. In a “carrot” license, a patent holder convinces a company to buy an attractive patent (carrot) on its own merits, so that the buyer can use it, or license it to others profitably. The alternative, “stick” license is offered to an actual or potential infringer: unless the prospect agrees to license, the patent holder will sue. Either way, when a company agrees to license a patent, payment is based on estimated future use over the life of the patent, plus past use when applicable.
Somehow, though, firms seeking customers for licensing or purchase of patents found it difficult to locate interested companies. Despite the promises implied by publications as our first Edison book, or another popular title of the same era, Rembrandts in the Attic, the emerging reality was that licensing of IP (whether as a carrot ...