Last Friday, this blog broke the story of a huge portfolio of Nokia assets that had been acquired by Provenance Asset Group, a company set up by IP advisory business Quatela Lynch McCurdy (QLM). With around 4,000 US assets it looks to be amomg the largest transactions so far in 2017.
They’re also part of what — from a sales perspective at least — is shaping up as one of the busiest deals markets in years. According to AST chief executive Russell Binns, the US market is on course to see 30,000 patents put up for sale this year. “It seems like everyone is trying to clean house at the same time,” Binns remarked.
The bumper crop in 2017 is considerably higher than ones seen in recent years where the number of assets has hovered somewhere between 18,000 to 20,000, according to Binns. As a defensive patent business that looks to acquire rights on the secondary market, license them to its members and then sell them back into the market, AST has as good a view of what's happening as anyone.
Nokia’s recent spate of transfers is one reason for the significant jump. As well as the large stockpile recently acquired by PAG, the Finnish telco has also put a portfolio of 6,000 patents up for sale through AQUA Licensing. Following its purchase of Alcatel-Lucent last year, which significantly boosted its patent reserves, Nokia has clearly been busy assessing the size and scope of its portfolio. Intellectual Ventures has also shaken up the secondary deals market, significantly ramping up its rate of sales including, earlier this year, the disposal of around 4,000 former Kodak patents to Dominion Harbor.
Of course the question is who might buy all of these assets. Speaking at LES’s annual meeting in Chicago yesterday Richardson Oliver Law Group partner Kent Richardson said that NPEs still remain significant buyers, although for the last few years operating companies have been the most active. Some, such as Uber, have been on well publicised buying sprees, but most large businesses tend to buy on a more discrete basis, picking up assets in one-off deals. Earlier this year, for instance, in a relatively rare foray into the secondary market, Apple acquired a package of former patents owners Pantech. More recently, according to the USPTO assignment database, Google bought a portfolio of 15 assets from Korean telecoms business KT.
Even with operating businesses looking to add to their portfolios, it’s not clear that there’s the demand among buyers to create a buoyant sales market. Patent values remain depressed so there’s no doubt that the opportunistic have plenty of scope to add to their assets, though not many have the resources or expertise to do a deal as large as the recent Provenance acquisition.