At the Precipice: Takeaways from IAM’s Patent Transactions

New financial products, shifting commercialization strategies, and unavoidable disruption from AI

Now that the dust has settled from IAM’s Patent Transactions Summit, we’re sharing takeaways from a week of talking with IP leaders about AI, portfolio value, relationship building etc.

Why You Should Care: The IP space is on the precipice of major shifts. As Joff Wild shared with me, “When I started in IP 20 years ago, I would have recognized the market as it exists today. Three years from now – I have no idea what I’ll be looking at.

According to 20 heads of IP, AI will likely drive significant changes in how their groups function over the next five years. However, there is still skepticism about complex uses. Early experiments using ChatGPT or GPT-connected tools are promising for tasks like summarization and search. However, IP teams I spoke with have not had success leveraging general intelligence models for valuation or infringement analysis

• IP departments with access to deep technical resources are contemplating their own IP-specific LLMs

• Service providers and evaluation experts like Aon, Fortress, and others are increasingly partnering with technology providers to tune application-specific models

Chart Courtesy of AST Patent Deals Report

• About 20% of assets on the market transacted, slightly down from 2021 and 2022

• New financial products (e.g., monetization insurance) are emerging, existing models (IP-Backed Lending) set to experience disruption

• According to Kent Richardson, most “new” entrants are actually the old guard – existing NPEs using new names

• Economic headwinds are driving greater appetite in the C-Suite for sell-side transactions

  • Although value-driven buyers are taking advantage of this, challenges in the licensing market have prevented monetization firms from picking up all of the slack

When I asked Grant Moss at Adapt IP Ventures how brokers could communicate value, his answer hit at the heart of the issue: “With so much variability in how companies want to consume deals; its nearly impossible to communicate deal value without the trust that comes through a pre-existing relationship”

• Even in the litigation funding world – top financers and insurers I spoke with said that NPEs can actually make for more rational actors and build stronger relationships – because they are not doing one-off deals
• According to Ada Wong at Brightseed – relationships between internal stakeholders (corporate dev, R&D, etc.) are equally important to enable transactions and drive greater portfolio value

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