GET THE BEST VALUE FOR YOUR BEST PATENTS
sell to a troll:
The troll will borrow money to pay for your patents and finance an expensive litigation. That money is extremely expensive for the troll, who won't be able to offer you a fair cash price. A reward sharing arrangement is actually from whatever is left after covering the troll's costs and income.
License it yourself:
Get ready for IPR, CBM, PGR, DJ, and years of expensive and distracting litigation and loss of reputation, at the end of which you might end up with an invalidated patent and pay the other party's attorney fees. Well, good luck with that...
With so many patents already in its portfolio, it would need yours just for defensive purposes, lest it falls in the hands of its competitors or a troll. If that company values your patens as X, and there are about 10 operating companies with similar value perception, you just lost 9X!
That entity uses its annual budget to buy as many patents as possible just to add them to its huge patent graveyard rather than to use them to generate revenue. The less it pays you, the more patents it can buy and kill. How compelling could its offer be to you?
Covering 100% market share
Only SynPat offers you a competitive cash price, plus 1/3 of all possible future licensing.
Since we don't markdown our purchase price to ensure a traditional marginal profit, if you sell your patent to SynPat you will get the most competitive upfront price + 1/3 of all SynPat revenues.
SynPat's revenues come only from selling licenses, and they positively correlate with your upfront price. The higher it is, the higher the COST PRICE, the REGULAR PRICE and the VALIDATED PRICE are. Simply put, we try to buy from you at the highest transact-able price. When we sell licenses, we share our revenues with you, dollar for dollar.
Unlike any other buyer, SynPat's interests always align with yours. Because we sell the licenses to all three segments of the market, we cover 100% of the addressable market, rather fast!
Upfront price, plus 1/3 of revenue - all in less than 18 months!
For example, if you sell to SynPat at an upfront price of $6M, and the entire market of licensees is no greater than 10 operating companies, like in any commodity market, 30% of this market is expected to be early adopters i.e., 3 companies will be interested in participating in an ad-hoc syndicate to equally share the funding of your upfront price: $2M, in exchange for a license plus 1/3 of all SynPat revenue.
Since $2M is the open market COST PRICE, the REGULAR PRICE is automatically set to $3M. Like in any commodity market, 50% of this market is expected to buy their licenses during the next four months. i.e. 5 companies will be interested in acquiring licenses at a REGULAR PRICE of $3M. The laggards, who wait until 80% of the market buys their licenses will pay a VALIDATED PRICE of $6M for a similar license.
You, the seller, will make $6M upfront, then, within four months an additional $5M, an about 11 months later an additional $4M. Altogether, $15M within 18 months, with minimal or no risk at all.
How much should you ask for your patents? The following simulator allows you to get a realistic idea of the dollar value of your patents. Under SynPat's Market Value approach, the value of your patent portfolio depends on two variables:
1. The price licensees will perceive as reasonable. The higher the impact of your patent is, the higher the price a licensee will be willing to pay in exchange for a non-exclusive license under your specific patents.
2. The number of potential licensees. The larger the number of potential licensees covered by your patents, the more valuable your patent portfolio is.
In the simulator below, plug in the number of potential licensees covered by your patents, and then modify your asking price until the resulting Regular License Fee is reasonable in light of your patents' impact.
PRICING SIMULATOR FOR PATENT SELLERS
What’s the value of my patents?
- Value of a Patent Portfolio = Α×Β÷2
- A = the total number of potential licensees.
- B = the amount one licensee would be willing to pay.
- Α×Β÷5 = $4M = Upfront Price, payable upon assignment of the patents to SynPat (Closing)
- Α×Β÷6 = $3.3M = payable during the first 4 months after the Closing.
- Α×Β÷7.5 = $2.7M = payable within additional 10 months.
What make SynPat’s price offer so competitive?
Provided that you have the right patents, no other buyer can offer you a better price. Especially not patent aggregators or "trolls" of any kind.
Any other buyer will try to lower the sale price in order to maximize its expected profit, and minimize its risk in making that profit. SynPat is the only buyer whose revenues are not based on the arbitrage between the price it pays for the patents and its revenues. In fact, SynPat’s revenues are based on the acquisition price and correlate with it; the higher the price, the higher the revenues! Thus, SynPat has no incentive to mark down or discount the seller's asking price.
SynPat accepts the seller's asking price - so long as it's executable, i.e. the price can be raised from multiple participants, taking into consideration the number, the quality, and the impact of the patents as well as the total number of potential licensees.
Can we continue showing the patents to others until the Closing?
Sure, go ahead, that would help the exposure of your patents. Thanks to SynPat's unique Open Licensing Program, we are confident that any operating company that finds your patents interesting would prefer to join our ad-hoc acquisition syndicate, and pay a fraction of the sale price.
If an operating company acquires a patent portfolio for defensive purposes (to avoid the risk of having those patents asserted against it in the future), why would it pay a full price that also incorporates the offensive elements of owning the patents, when, with SynPat, it can buy exactly what it needs - a license at a fraction of the price to purchase the patents?
Even when an operating company acquires a patent portfolio for assertion, it can always participate in our ad-hoc syndicate and acquire a Strategic License from SynPat, again, at a fraction of the price.
Whatever an operating company's acquisition strategy is (to eliminate infringement risk or for assertion), participating in SynPat's syndicates and paying a fraction of the sale price is always preferable to an outright acquisition of the patents.
Does SynPat produce claim charts?
Yes, as many as possible. SynPat invests most of its resources from the time of signing the Patent Purchase Agreement until the Closing on preparing claim charts, prior art reports and other evidence that is necessary to reflect and demonstrate the value of the patent portfolio to potential licensees.
When selling patents to SynPat, the risk of a Declaratory Judgment (DJ) response does not exist. SynPat is a buyer, like any other buyer. A lawsuit for a DJ can be filed only when the patentee or someone who represents the patentee offers a license. Before the Closing, SynPat is not the owner of the patents, and doesn't represent the seller in any way. Thus, an accused licensee cannot file a lawsuit for a DJ, neither against the seller (the patent owner), because the seller did not make any representations or offer a license, nor against SynPat, because it is not the owner, and cannot pose any threat to anyone.
How does SynPat deal with “free riders”?
SynPat doesn't deal with "free riders" or stubborn infringers. SynPat is a licensing company, not an enforcement entity. SynPat was created to offer operating companies who wish to acquire licenses to patents that could impact their business opportunities to do so at reasonable prices - something that has never been offered before.
As to free riders, we believe that when the carrot is sweet enough, a stick is not needed. We created a licensing program that is open and available for everyone to enjoy, and we offer generous licenses to high quality and impact patents. We do so by letting the free market of licensees, through its direct ad-hoc funding, determine whether or not SynPat acquires a portfolio. Thus patent quality or impact is never an issue.
We don't force companies to acquire licenses. Unlike other buyers who use their own capital or funds from investors to buy patents and then demand, under threat of suit, that operating companies acquire licenses, SynPat lets licensees decide whether we acquire the patents so they can get a license. If a sufficient number of operating companies don't join a particular syndicate and don't fund the acquisition of a specific patent portfolio, SynPat simply doesn't buy it. We believe that this “acquisition filter” is the best mechanism to reflect the market needs and to ensure the highest quality of our patent inventory.
When we acquire a patent portfolio, it's always as a result of operating companies' needs. If, however, the invisible hand effect of the free market is being subverted by free riders or willful/stubborn infringers, that's a problem that needs to be addressed, because free riders make the ride more expensive for paying passengers.
So, while our door is always open for everyone to come aboard and buy a ticket to ride, at a variety of different times and prices, depending on each client's preferences, if a stubborn free rider insists on sneaking in through the back door and riding for free - we let security deal with it. We sell the patents to someone who knows how to deal with them.