The state of patent auctions

Over at IAM Blog, they have posted a recap of the most recent ICAP-OceanTomo patent auction. The headline of posting says it all: No big bids at ICAP OT auction as most lots go unsold; but value is created nevertheless. I’m not going to argue with Joff about whether value really was created. I agree that having the auction does create some new information about pricing. But I’m not sure this is the most useful or efficient way of creating and disseminating market price information. There are other mechanisms — harkening back to the earlier days of commerce — such as clearinghouses and broker surveys. I know that some of these already exist such as large expensive surveys of licensing transactions.
But we might want to think about other ways to pierce the veil of, as Joff puts it, “what is normally a very opaque world.” One way might be through enhanced corporate reporting (see our ealier report Reporting Intangibles: A Hard Look at Improving Business Information in the US). For example, there could be more detailed disclosure of what companies (and universities) sold and bought and the price. I realize that such disclosure will raise howls of protest about “confidential information.” But, the same cries were heard in the past about giving investors even basic information such as revenues.
On other point on the auction. The IAM blog posting has the follow analysis from Terry Ludlow of Chipworks: “High quality and valuable patents still sell for good prices where there is a valid business proposition – but, no-one is snapping up speculative high risk IP.” I think that is a succinct and insightful statement about the state of the market. Enough said.

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