By SUSAN LAHEY
Reporter with Silicon Hills News
After all, you’re peddling pure potential: “Take this patent and make yourself a star…or at least solve some problem faster and more cheaply than you would have been able to yourself.” But in reality, IP sellers and buyers have to contend with a veritable ocean of patented ideas, many of which are worthless or irrelevant to what you’re doing. All of which are written in legalese so you can’t quickly ascertain what they do or how it might help you. And by the time a buyer and seller connect, the idea may be obsolete.
And if you’re someone with only a couple of patents to sell, fuggedaboudit.
The way IP has always been sold, as idealAsset CEO Tom Hochstatter says, is like trying to sell a house by leading with the concrete’s tensile strength. What the buyer wants to know is “How many bedrooms? How big is the kitchen?”But Hochstatter’s new product, idealAsset, aims to change all that. His company calls it the Match.com for IP. Individuals or companies join and list their IP; idealAsset creates listings with more “buyer empathy,” matching the patented idea with what a buyer is looking for. Within moments, IP assets are matched to interested buyers. idealAsset doesn’t guarantee a marriage, but it gets the conversation going.
idealAsset is one of the companies pitching at the 2014 SXSW HATCH Pitch Competition.
Marketing IP Correctly
“IP licensing and commercialization is hard,” said Mike Millard, Director of Innovation, Seton Hospital/Ascension Healthcare. “It’s not like a widget. It’s a one relationship sale and just finding that person, even that part is hard…. idealAsset really cuts down on the research time needed to strike a deal. You want to get to the face time.”
“IP is usually commercialized by the top 10 percent of inventors,” said Courtney Landers, Director of IP, Calavista Software and previously VP of IP for Emergent Technologies—also an idealAsset customer. “For the most part, people in the industry don’t have a background in sales and marketing and don’t want to do the legwork to pick up the phone and make 100 calls to find out who might want this IP,” Landers said. And a broker takes 30-to-50 percent of the profit.
“I like the fact that I can put assets in there to scale and within minutes of loading them up with idealAsset, I’m sitting there with warm introductions to interested buyers,” Landers said. “I don’t know of any other tool that even comes close to that.”
idealAsset was incubated at Fluid Innovation, an IP brokerage started in 2005. When Hochstatter came on in 2007 with his tech background that includes Microsoft, IBM, Yahoo and a couple of startups, he suggested the company create tools and solutions for the IP commercialization industry, such as its licensing platform. idealAsset was one of the tools they conceived that will become its own company. Hochstatter likes to think of Fluid Innovation as an innovation accelerator.
“If we find another cool idea we might pull it into Fluid, fool around with it, incubate it for awhile and spin it out.”
Like Amazon for IP
“It takes almost an entire year to do an IP deal,” he said. “It’s hard and silly and there’s no good reason for it. It takes 347 days on average, if it ever gets done. It’s like pandas mating, and you really have to help them or it’s not going to happen.”
This is especially true for people with one or a few patents whose chances of finding a buyer and making a profit from their IP is miniscule. idealAsset offers a relatively fast, inexpensive alternative. Subscriptions range from $199 per person per month to $10,000 a month for an enterprise customer with unlimited access. Transaction fees range from 5 percent to 15 depending on your subscription level.
idealAsset also uses scrapers and crawlers to aggregate IP from companies that are not signed customers. If a buyer bites on one of these properties, idealAsset informs the owner of an interested buyer and invites it to become a member.
One of the huge benefits of idealAsset, Landers said, is that it provides a way for IP sellers to attach a reasonable value to the patents they’re trying to sell.
“More deals fall apart (at pricing) than anything,” Landers said. “With idealAsset if you’re looking for a technology you can start gathering a fair price point on the commercial data…. That’s a huge value…at the end of the day your IP really is worth what someone is willing to pay for it.”
But another benefit is the partnerships and ideas that may emerge from idealAsset. Being able to see various patents on the market may spark ideas.
“I’m an ideas advocate,” said Hochstatter. “I’m centered on the idea, not who owns it. I want to find the best home, the next place for that idea in that continuum…that’s my responsibility.”
Editor’s note: this article originally appeared in Silicon Hills News’ print magazine, which debuted at South by Southwest Interactive.