Business Models of Patent Intermediaries

This chapter presents the various IP business models. After providing evidence of the diversity of patent intermediaries, the chapter generates a list of “ills” that patent intermediaries seek to mitigate. To do so, the discussion provides and builds on a straightforward definition of business model as a description of an organization and of the way that organization functions to anticipate an “ill” (or detect a problem significant to others) and to provide a viable solution or increased gain for a specific group of customers. This pragmatic definition serves as the foundation for the chapter’s discussion of whether patent intermediaries are efficient players in solving companies’ problems or whether, in contrast, they generate “artificial” ills that they then solve for a fee, obtaining unnecessary monetary rewards for doing so. Much criticism of the patent intermediation business model is justified by the litigation and opacity characteristic of many companies’ activity. Although it would be extremely naïve to assert that patent intermediaries are the only source of these problems, arguments concerning their role in exacerbating the problems are the subject of debate. Although one can question intermediaries’ business model, intermediaries do play a somewhat entrepreneurial role in taking the initiative, bundling resources, and assuming risks.