Transparency, or the lack thereof, has caused hopeful transactors in the IP market more frustration than Terrell Owens has caused General Managers in the NFL. The sell-side has never had a platform on which to market their rights to all potential buyers, and the buy-side has never had a platform on which complete information is disclosed. This is partly (and to some, wholly) due to the inherent character of intellectual property and its valuation.
The phenomenon of IP Auctions, however, has the potential to create the transparency that the market desperately needs. The concept of auctioning intellectual property is not completely novel. Private IP auctions have been held in the context of bankruptcy or dissolution of a business. In 2006, however, this all changed when Ocean Tomo, an intellectual property merchant banc, hosted the first public IP auction in San Francisco, recording sales of almost $3 million. Since then, Ocean Tomo and other IP consulting firms abroad have hosted numerous successful auctions. The phenomenon has created a much needed transparency to both the sell-side and the buy-side of the market. Before, most IP transactions were done at arms length and behind closed doors, causing arbitrary pricing. Now, price standards can be set, and parties can find each other on a common stage, erasing the transaction costs usually associated with searching for buyers or sellers. Thus, companies that hold unused IP in their portfolio that might be valuable to another enterprise can sell their IP in a visible marketplace.
The success of Ocean Tomo’s auctions is a great sign for sell-side and buy-side participants. Of course, more public sales means more information is disseminated about those sales. Ocean Tomo’s next auction will be held in San Francisco on March 26-27. The event includes two days of panels covering industry-specific nuggets of information, as well as a gala dinner for networking. I plan to attend this auction, which will be my first, and I will document as much as I can for the IP Prospective audience.
For creators, inventors, or rights holders that are interested in submitting IP for sale in the upcoming auction, you can do so HERE.