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23 September 2019PatentsEric Podlogar

Innovation trends: The truth behind transactions

As global economic and market activity continue to evolve, we pause to provide perspective on how these activities intersect with innovation. Market leaders develop reputations as innovation hotbeds predicated on volume-based patent filing strategies.

There are many ways to take advantage of emerging technologies outside of owning massive patent portfolios. Given the various economic entanglements from tariffs, trade disputes, antitrust claims and more, entities are exploring new ways to access new technologies to enrich business models.

IP and patents are transacting

Entities are continuously adjusting how they conduct business to offset global economic effects and legal disruptions. Borders no longer confine technologies to a particular location. Innovation enables activity to flow from one territory to another.

Transaction data provides insights to pinpoint active industries and territories. The different types of agreements filed show the unique interactions, and the different bases used to calculate royalty rates (Figure 1) offer alternative “scales” to derive valuations. These factors identify the degrees of freedom from which engagements can be tailored or customised.

Agreement activity for each base provides a broad perspective on year-on-year changes. Since net sales is the most commonly used basis, it is an indicator for royalty rate trends. The net sales average royalty rate declined from the 2013 to 2018 plateau. There may be impacts from localised factors, but industry and sector-specific trends rely more on global factors, such as international trade events.

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