Since Yahoo! put up a large portfolio of is patents up for sale last year we have become accustomed to plenty of speculation about how much the assets might be worth and who might actually buy them. We’re still none the wiser about how much those assets might be worth because aside from a small package that was acquired by Dominion Harbor the portfolio, known as Excalibur IP, is still owned by what remains of the Yahoo! business which is now known as Altaba.

Speaking recently, Provenance Asset Group CEO Dan McCurdy posited one reason for why the patents haven’t sold as he compared the process with the 2012 disposal of the portfolio owned by chip designing business MIPS. “There were literally thousands of companies around the world that were fearful of the MIPS portfolio and there aren’t thousands scared of the Yahoo! portfolio,” he commented. In other words, they don’t pose such a threat to operating companies that a large corporate buyer feels they need to have them or a defensive aggregator feels motivated to launch a bid in order to protect its subscribers.

The MIPS transaction saw the company sell almost 500 patents to a consortium led by AST and including British chipmaker ARM (MIPS was then acquired by Imagination Technologies). McCurdy was CEO of AST at the time and so played an active role in how that deal played out. Such was the strength of the portfolio and the risk that it might fall into the hands of a non-practising entity or an industry competitor that the likes of ARM felt strongly motivated to step in.

McCurdy was speaking on a panel at the recent IP Dealmakers Forum alongside Michael Friedman of Hilco IP Merchant Banking, Courtney Quish of Rovi and Mike Dansky of Berkeley Research Group. The panel, titled “Getting good deals done”, was moderated by Elvir Causevic of Houlihan Lokey which is handling the Yahoo! disposal. Causevic admitted that they had tried to create the same kind of competitive dynamic as the MIPS deal which prompted McCurdy to make his comment about why he thought the Yahoo! assets hadn’t sold. The Provenance head described the MIPS portfolio as “an extraordinarily fundamental patent portfolio” and credited the company with doing, “a good job of making sure that people knew there was a risk they might do a deal with an NPE”.

Of course, 2012 when the deal was done, feels like light years removed from today’s patent climate. Anyone looking at the Yahoo assets would naturally be concerned of any patent eligibility challenges that the portfolio might face thanks in large part to the Supreme Court’s Alice decision. There are also far fewer, well-capitalised NPEs on hand to acquire the assets and none (that I can think) who would be willing to pay cash upfront for a portfolio rather than some sort of privateering deal structure with the vast majority of the money changing hands once a deal had been done.

As well as McCurdy’s comments about why the Yahoo! assets had so far failed to find a buyer, the panel discussion also looked at a range of other reasons for why patent deals fall apart. Friedman pointed out that deals often face competition from other assets such as real estate, which might be more appealing and perhaps better understood than an IP transaction. Plus dealmakers in the IP space still run up against a familiar narrative which can turn investors off. “The zeitgeist on Wall Street is that anyone who asserts a patent is a troll,” Friedman commented. “We’ve had deals fall apart because an investor has this irrational fear of assertion.” Creating a competitive dynamic for patent assets with that kind of concern is still a huge challenge for dealmakers. Just ask Yahoo!.