Patent monetization

Patent monetization refers to the generation of revenue or the attempt to generate revenue by a person or company by selling or licensing the patents it owns. According to a 2006 survey of patent owners at the European Patent Office, about half of small and medium-sized enterprises (SMEs) take patents for monetary reasons.

Some of these owners try to make money from patents on inventions they develop, manufacture or market. Others attempt to generate revenue by buying and enforcing patents against one or more alleged infringers in a manner considered by the target or observers as unduly aggressive or opportunistic, often with no intention to further develop, manufacture or market the patented invention. The latter group is pejoratively called patent trolls by their critics.

Texas Instruments is believed to be the first company to monetize in the 1990s its portfolio of patents (more than 38,000 in total) when the company was losing market share to competitors.

After the Texas Instruments example, IBM was another company who used the same technique in the 1990s to monetize its own patents to make more than $1 billion annually in revenue.

Microsoft use its patents to make deals with the major Android vendors, which amount to more than 70% of Android's market share.

Eastman Kodak is an example of a struggling company which use its patents portfolio to make additional revenue. For example, it is said that Kodaks' licensing programs have generated more than $3 billion in revenue since 2004.

Nokia generated €500 million from patents in 2013.

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Wikipedia