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Five Strengths To Look For In A Skilled Patent Broker
Finding a patent broker may seem like an intimidating process, but thankfully there are several qualities to look for that your patent broker must have if they’re a good broker. Working with a patent broker is pivotal to increase the value of your patent portfolio, but since not all brokers are necessarily good at it, here are five characteristics to look for which distinguish the best patent brokers from the rest.
Technical and Legal Knowledge
Albert Einstein once said, “the only source of knowledge is experience.” A great patent broker isn’t conjured out of thin air; it takes time to learn the intricacies of the patent market and which information will be most relevant to each new transaction.
In particular, when working with patents, adaptability is key as technology itself constantly innovates and evolves. A patent brokerage with an in-house team who understands the technical minutiae is paramount for effective patent assessment.
Technology patents often describe complicated new processes, algorithms, and architecture which may compliment or clash with existing products already on the market. A great patent brokerage possesses the technical knowledge to accurately grasp these concepts, real-world applications, and infringement cases. A broker who lacks this technical know-how is simply not in a position to maximize the return on your patent or portfolio.
Further, finding a patent broker with a strong legal background is equally important to balance both patent and technical analysis with the unique knowledge that is necessary for identifying potential legal matters. Items that may positively or negatively affect a sale, such as infringement or prior art considerations, are always important to identify early in the process in order to maximize patent value.
As in many fields, experience is an essential attribute for the best patent brokers. An experienced broker can not only better understand the value and demand for a patent or portfolio, but also has established relationships with frequent buyers, active firms, and other relevant parties. Experienced patent brokers also have more overall exposure to the intricacies of working in a confidential, opaque, and shifting marketplace where infringement or prior art may substantially alter market value. In contrast, an inexperienced broker may not be aware of market conditions which will likely result in a lesser sales price for your portfolio.
It is equally important that a broker be a skilled salesman and negotiator, an art refined through experience. A skilled salesman develops relationships with patent sellers and buyers and finalizes the deal, while a talented negotiator identifies and utilizes the strengths and weaknesses of a portfolio before engaging in a sales negotiation. The combination of these skills provides important leverage in developing effective marketing strategies and materials alongside a list of potential buyers by matching the patents to the specific needs of the buyer, or vice versa.
3. Research Skills
Even the most experienced broker cannot inherently know everything which may be relevant to valuing and transacting a specific patent portfolio. A strong set of patent research skills is vital for your patent broker to have. For example, having internal, proprietary patent databases and other research tools may make the difference between a good patent valuation or analysis, and a great one. Research may include:
Identifying patent ownership in relevant tech areas.
Pinpointing competitor products and services.
Locating products and services on the market that are infringing on patent(s) in the portfolio.
Assessing the strengths and weaknesses of possible infringement claims, and analyzing previous patent filings to determine possible prior art concerns.
A good patent broker understands the patent portfolios of his clients, but a great broker possesses the skills to locate and understand potential infringement, market trends, and other factors which may affect the strength of the valuation and sale.
4. Understanding of the Patent Market
The purpose of engaging a patent broker is to achieve the greatest return on investment through the successful sale of your patent portfolio, but this is not as simple as it sounds in a market as fluctuating, inconsistent, and inefficient as the patent landscape. In addition, most transactions are confidential, and any potential company’s patent buying interest is not publicly disclosed, making the marketplace ever-difficult to maneuver. Therefore, it is necessary for a good patent broker to have the experience, ability, and resources to understand and establish a realistic value of the patents or portfolio in the current market.
To achieve this goal, and ultimately provide a higher return on investment, your brokerage team must have the skills and knowledge to accurately assess the strengths and weaknesses of the portfolio. This includes a technical understanding of the patents, extensive comprehension of infringement and its function in the marketplace, conducting pertinent research in the relevant field(s), and then applying these concentrated insights to effectively market the portfolio to the right potential buyers.
5. Trustworthiness & Transparency
Naturally, trust between the patent holder and patent broker is imperative, and a great patent brokerage will nurture that trust through hard work, integrity, and transparency. A confident and reputable patent broker does not charge an upfront fee or demand a pre-determined sales price before agreeing to market and sell a patent portfolio. Instead, a great broker offers their services on a contingency fee basis, creating a partnership with the patent holder aimed at achieving the same goal: maximizing the sale amount of the portfolio. A contingency fee model builds trust between the patent holder and the broker, where, in a sense, the patent broker pays it forward by performing the tasks necessary to bring a patent to market without up-front compensation.
Moreover, a patent portfolio typically takes anywhere from 4 to 9 months to bring to market and close the sale. During this time, many important insights are collected, and decisions are made, including how to resourcefully market the portfolio and negotiate its sale. A trustworthy broker will be transparent with a patent holder from beginning to end by providing regular updates on possible issues, improvements, and on the overall progress of the sale. Working with a patent broker who is honest about all strengths and weaknesses of a portfolio which may affect the sale is essential to navigating your portfolio transaction with confidence.
Ultimately, no two patent brokers are alike, and choosing the right patent broker for you can feel daunting. Bringing a patent to market is already a time-consuming process filled with serious monetary and emotional implications, so when you’re ready to select a broker, focus on these five characteristics as a guidepost for finding a great patent broker who will lead you through an informed, knowledgeable, and transparent process, and ultimately maximize the value and return of your portfolio.
The core team of patent consultants at Vitek IP, LLC have analyzed over 20,000 patents, while managing hundreds of buy-side and sell-side transactions for some of the world’s largest companies. Vitek’s founders have over five decades of experience in IP and tech, and have developed sophisticated patent sales and patent acquisitions strategies for some of the world’s largest companies. Vitek’s patent consultancy, brokerage group, and research organization provide clients exceptional guidance navigating the patent landscape. For more information, visit www.vitek-ip.com.
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