Don’t Wait to Monetize Your Patent!

You can’t wait too late, or it will be too late.

 

Robert Bob Kelly by: Robert Kelly | February 2, 2018

Patent owners often wait until their patents are near expiration, or sometimes even expired, before they attempt to license or otherwise monetize them. There is nothing wrong with asserting a patent at the end of its term, and very often there is still revenue to be generated from these assets. However, there are several risks that the patent owner needs to be aware of when attempting to monetize a patent asset in the later stages of its life. Several of those risk are identified below.

  1. The patent owner will have to overcome issues of perception. Unfortunately, most infringers think that there is something inherently unjust about paying for a license and/or release to a patent that has expired or is near expiration. Though the reality is that if the infringer was using the patented technology before the asset expired, there is typically still a meaningful period of exposure that will need to be addressed.
  2. The patent owner has less flexibility with their exposure analysis. Having the ability to account for future market growth can be a valuable tool when negotiating a patent license. In the case of an expiring or expired patent, the patent owner will often find themselves restricted primarily to the historical revenue generated by the patented technology when discussing the value of the asset.
  3. If there is a product that should have been marked (according to 35 U.S.C. § 287(a)), and that product was not marked, the failure to mark can cut off the patent owner’s ability to extract most or all of the claimed damages. Marking issues are less damaging to assertions involving an in-force patent, because in those situations the infringer can be put on actual notice through a letter or complaint, thus at least partially remedying the marking issue.
  4. The patent owner will not be permitted to amend its claims during a post-grant review proceeding. Post-grant review challenges are very common in patent monetization and enforcement, and while typically there is an opportunity to amend challenged patent claims during these proceedings, that opportunity does not exist if the patent has already expired.
  5. If the patent asset has expired due to a failure to pay maintenance fees, and the patent is subsequently revived, a prospective licensee will almost certainly question whether the patent was properly revived. This is an argument that can make it more difficult to reach consensus on the value of the license.

 

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