AST on track for record year as it capitalises on buyers’ market for patent dealmakers

IAM Blog by Richard Lloyd

December 15, 2017

In October we ran a story following a comment from AST’s CEO Russell Binns that the patent market was due to see 30,000 assets for sale in 2017. “It seems like everyone is trying to clear house at the same time,” he commented at that time.

Well, as we approach the holiday period, it looks like AST has been taking advantage of what remains a buoyant buyers’ market. Speaking to IAM once more, Binns stated that this year is shaping up to be the defensive aggregator’s busiest on record, describing its buying activity as “very robust and more active than the last several years”.

What’s more, Binns said, AST has “granted many more licences to our members this year than any other year in our history by far”. AST acquires patents, licenses them to some or all of its members and then sells them back into the market in what is known as a “catch and release model”. Members include IBM, Microsoft, Google and Ford.

Binns revealed that the AST team is currently working on about 10 possible deals which he said wouldn’t all close before the end of the year but which look set to add to the already buoyant activity levels. “Overall it is looking like 2017 will be the most active year in AST’s history,” he said.

That activity includes the second version of IP3, the patent buying programme which is designed to give IP owners a quick and efficient way of selling their assets. Sellers were asked to submit their patents for consideration between 1st August and 30th September with AST due to notify them of any buying interest by the end of last month and any deals wrapped up by early next year.

Among the transactions that AST has done this year on the secondary market, most recently it picked up a package of 33 US assets from music streaming business Napster, which was formerly known as Rhapsody International. Napster has gone through several iterations since its early days as the pioneering bad boy of music streaming. It remains a relatively small player in a sector that is dominated by Spotify and music streaming services from tech giants like Apple. The fact that it has done this deal with AST suggests that it has been actively looking to monetise some of its IP. On the sell side, AST transferred over 50 assets to Uber in the summer as the ride-sharing business contnues to aggressively build its portfolio.

While there are some signs of an uptick in patent values in the secondary market, it seems likely that 2018 will remain favourable for buyers. With those market conditions and the recent hire of Yahoo!-dealmaker Ray Strimaitis, it could be another very busy 12 months for AST.

This story also may be found here.