Patent monetization refers to the generation of

revenue In accounting, revenue is the total amount of income generated by the sale of product (business), goods and services related to the primary operations of a business. Commercial revenue may also be referred to as sales or as turnover. Some compan ...

or the attempt to generate revenue by a person or company by selling or

licensing A license (American English) or licence ( Commonwealth English) is an official permission or permit to do, use, or own something (as well as the document of that permission or permit). A license is granted by a party (licensor) to another par ...

the

patent A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an sufficiency of disclosure, enabling discl ...

s it owns. Some of these owners try to make money from patents on inventions they develop, manufacture or market. Others attempt to generate revenue by buying and enforcing patents against one or more alleged infringers in a manner considered by the target or observers as unduly aggressive or opportunistic, often with no intention to further develop, manufacture or market the patented invention. The latter group is pejoratively called

patent troll In international law and business, patent trolling or patent hoarding is a categorical or pejorative term applied to a person or company that attempts to enforce patent rights against accused infringers far beyond the patent's actual value or ...

s by their critics.

History

Texas Instruments Texas Instruments Incorporated (TI) is an American multinational semiconductor company headquartered in Dallas, Texas. It is one of the top 10 semiconductor companies worldwide based on sales volume. The company's focus is on developing analog ...

is believed to be the first company to monetize in the 1990s its portfolio of patents (more than 38,000 in total) when the company was losing market share to competitors. After the Texas Instruments example,

IBM International Business Machines Corporation (using the trademark IBM), nicknamed Big Blue, is an American Multinational corporation, multinational technology company headquartered in Armonk, New York, and present in over 175 countries. It is ...

was another company who used the same technique in the 1990s to monetize its own patents to make more than $1 billion annually in revenue. Also in the 1990s,

mainframe computer A mainframe computer, informally called a mainframe or big iron, is a computer used primarily by large organizations for critical applications like bulk data processing for tasks such as censuses, industry and consumer statistics, enterprise ...

manufacturer

Unisys Unisys Corporation is a global technology solutions company founded in 1986 and headquartered in Blue Bell, Pennsylvania. The company provides cloud, AI, digital workplace, logistics, and enterprise computing services. History Founding Unis ...

and

minicomputer A minicomputer, or colloquially mini, is a type of general-purpose computer mostly developed from the mid-1960s, built significantly smaller and sold at a much lower price than mainframe computers . By 21st century-standards however, a mini is ...

manufacturer

Wang Wang may refer to: Names * Wang (surname) Wang () is the pinyin romanization of Chinese, romanization of the common Chinese surname (''Wáng''). It has a mixture of various origin with uncertain lineage of family history, however it is c ...

turned to patent monetization in the face of declining product revenue resulting from the

microcomputer revolution The history of the personal computer as a mass-market consumer electronic device began with the microcomputer revolution of the 1970s. A personal computer is one intended for interactive individual use, as opposed to a mainframe computer whe ...

. Unisys sued software companies over its

underlying GIF technology and Wang sued

RAM Ram, ram, or RAM most commonly refers to: * A male sheep * Random-access memory, computer memory * Ram Trucks, US, since 2009 ** List of vehicles named Dodge Ram, trucks and vans ** Ram Pickup, produced by Ram Trucks Ram, ram, or RAM may also ref ...

manufacturers over its patent involving RAM parity bits.

Microsoft Microsoft Corporation is an American multinational corporation and technology company, technology conglomerate headquartered in Redmond, Washington. Founded in 1975, the company became influential in the History of personal computers#The ear ...

uses its patents to make deals with the major Android vendors, which amount to more than 70% of Android's market share.

Eastman Kodak The Eastman Kodak Company, referred to simply as Kodak (), is an American public company that produces various products related to its historic basis in film photography. The company is headquartered in Rochester, New York, and is incorporated i ...

is an example of a struggling company which use its patents portfolio to make additional revenue. For example, it is said that Kodaks' licensing programs have generated more than $3 billion in revenue since 2004.

Nokia Nokia Corporation is a Finnish multinational corporation, multinational telecommunications industry, telecommunications, technology company, information technology, and consumer electronics corporation, originally established as a pulp mill in 1 ...

generated €500 million from patents in 2013.

Guangdong Deal

Eleven high-tech companies in China's Guangzhou Development District, through a sales-and-licensing back arrangement, collectively securitized their patents in exchange for a proceed of CN¥300 million on July 31, 2019, which was reportedly the first patent securitization deal in China.

Ant Group

Alibaba Group Alibaba Group Holding Limited, branded as Alibaba (), is a Chinese Multinational corporation, multinational technology company specializing in E-commerce in China, e-commerce, retail, Internet, and technology. Founded on 28 June 1999 in Hangzho ...

made an in-kind investment by contributing IPs appraised at CN¥12 billion to

Ant Group Ant Group ( zh, s=蚂蚁集团, p=Mǎyǐ jítuán, t=), formerly known as Ant Financial, is an affiliate company of the Chinese conglomerate Alibaba Group. The group owns the world's largest mobile (digital) payment platform Alipay, which serves ...

in exchange for one-third shareholding. The IPs contributed through in-kind investment account to 90% of Ant Group’s IPs, including 26,279 patents applied or granted, 8,569

trademarks A trademark (also written trade mark or trade-mark) is a form of intellectual property that consists of a word, phrase, symbol, design, or a combination that identifies a product or service from a particular source and distinguishes it from ot ...

, 677

copyrights A copyright is a type of intellectual property that gives its owner the exclusive legal right to copy, distribute, adapt, display, and perform a creative work, usually for a limited time. The creative work may be in a literary, artistic, ...

, 3,927 domain names, and 369 design patents and

trade secrets A trade secret is a form of intellectual property (IP) comprising confidential information that is not generally known or readily ascertainable, derives economic value from its secrecy, and is protected by reasonable efforts to maintain its conf ...

in 40 countries and regions at home and abroad, covering the technological areas of

artificial intelligence Artificial intelligence (AI) is the capability of computer, computational systems to perform tasks typically associated with human intelligence, such as learning, reasoning, problem-solving, perception, and decision-making. It is a field of re ...

risk control Risk control, also known as hazard control, is a part of the risk management process in which methods for neutralising or reduction of identified risks are implemented. Controlled risks remain potential threats, but the probability of an associa ...

, security, and

blockchain The blockchain is a distributed ledger with growing lists of Record (computer science), records (''blocks'') that are securely linked together via Cryptographic hash function, cryptographic hashes. Each block contains a cryptographic hash of th ...

. In November 2020 before Ant Groups’ IPO was put on hold, its estimated market capitalization was once about CN¥2.1 trillion, i.e., the CN¥12 billion becoming CN¥700 billion market value (1/3 of the shareholding), about 50 times investment return generated from Alibaba’s IP Monetization.

References

{{Reflist, colwidth=30em Patent law

History

Guangdong Deal

Ant Group

See also

References