AST IP Transactions Market Report – Q2 2019

09/13/2019

In the second quarter of 2019, the secondary patent market experienced modest increases from Q1, with 287 new patent sales involving 3,933 assets, 263 sellers, and 259 buyers. Since Q3 2018, the market has been averaging around 300 deals per quarter, an increase from the 2017 average of 275 deals.

A few important observations:

In an unusual turn of events, healthcare & pharma overtook software as the leading category, as measured by the number of deals. In fact, software was third this quarter, as the industrial sector moved into second place. This marks the first time in a decade that software has not been the technology category with the most transactions in a quarter.
IBM’s sizable sale of 1,175 assets to Pure Storage Inc made up the overwhelming majority of the 1,234 assets that IBM sold this quarter.
In Q2 non-practicing entities (NPEs) were particularly litigious. They filed 76 new lawsuits using Q2 transacted patents, compared with only 15 lawsuits in the previous quarter. In addition, in many cases, NPEs are filing lawsuits against operating companies right after acquiring the patents.
- That said, we note that Allied Security Trust (AST) received 40 percent of the litigated patents before they were used in litigation—assets that were eventually involved in 60 percent of this quarter’s NPE litigations.

While there were fewer NPE buyers this quarter, several NPEs bought large portfolios in software and semiconductor technologies. One example: 2S Ventures bought assets from different sellers in various deals.

For those who have access to IAM Media articles, the full report may be found here: https://www.iam-media.com/defensive-aggregation/latest-patent-deal-numbers-reveals-software-loses-mantle-busiest-sector

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