Patent Liquidity

Name

Patent Liquidity

Cite

The Patent Prospector

Year

2005

Bluebook cite

Posting of Gary Odom to The Patent Prospector, http://www.patenthawk.com/blog/2005/10/patent_liquidity.html (Oct. 3, 2005, 20:23 EST)

Author

Gary Odom

URL

http://www.patenthawk.com/blog/2005/10/patent_liquidity.html#more

Item Type

blog

Summary

Turning nominally illiquid assets into liquid assets is only accomplished through market makers. This is fundamentally how the stock market works. And it's how the patent market is increasingly working.

Anyone who understands how a stock market transaction actually occurs understands market makers.

For patents, licensing companies, in buying patents from individual inventors and companies unable to afford enforcement on their own, are patent market makers. What this does is create a market for invention.

If an inventor cannot profit from his invention via a patent, he won't put in the effort to invent: no reward - the inventor's dilemma. But the inventor's dilemma is not solved just with the patent grant; an inventor must be able to actually profit from his invention. Getting a patent is a half step. The other half step is getting someone to pay for the patent.

Companies ubiquitously avoid negotiating patent licenses with small inventors. "Get away from me kid, you bother me." More hard-nosed tactics are thus called for - litigation. Litigation is expensive, and so provides a barrier to patent enforcement, particularly for small inventors; hence companies' refusals to negotiate. A market maker is needed.

Patent market makers thus provide the lubricant to the invention machine, allowing inventors, regardless of means, to actually profit from their inventions. Without market makers, corporate hegemony in high technology would be complete, and consumers would suffer from the lack of innovation.

Excerpts and Summaries

Created

Wednesday 12 of August, 2009 16:23:34 GMT
by Unknown

LastModif

Wednesday 12 of August, 2009 16:25:28 GMT
by Unknown