Burford Capital, the leading global finance and asset management firm focused on law, has officially the results from a new research on patent monetization, which is a medium for businesses with significant intellectual property to generate revenue from patent assets through licensing, direct enforcement and corporate divestitures.
To understand the significance of such a development, we must take into account how high research and development costs have historically caused long development timelines and intense IP competition, birthing a challenge for GCs and CFOs of seeking greater value from their companies’ patent portfolios without diverting capital from core business operations.
More on that would reveal how, even with substantial investments in securing and maintaining patents, many companies continue to fall short in leveraging their intellectual property. As a result, they often miss out on financial opportunities and ongoing costs that could otherwise be offset through monetization.
“Patent monetization remains a significantly underutilized asset for many businesses,” said Christopher Bogart, CEO of Burford Capital. “Companies frequently hold valuable patents that require substantial investment to enforce, incurring significant expense—risk we routinely finance for clients. In today’s climate of intensifying global competition and rapidly evolving IP enforcement landscapes, legal finance empowers companies to strengthen their patent monetization strategies and take a more proactive, value-driven approach to IP management.”
Talk about the data showcased in Burford’s research, it claims that more than 70% of in-house lawyers say their organizations are more likely to monetize patents today than a decade ago.
However, despite the clear increase in patent monetization, 79% of in-house lawyers say that more than a quarter of their patent portfolio still remains underutilized. The costs of maintaining patents without monetization presently include lost revenue, delayed market entry, and reduced market share.
Another detail worth a mention is provided by a contingent of 72% law firm lawyers who cite the high cost of litigation as a deterrent to clients pursuing meritorious patent claims.
Having covered the issues, we now must turn our attention towards the brighter side, as according to 73% of in-house lawyers, revenue from patent monetization has increased over the last 10 years. 69% of in-house lawyers, on the other hand, say their organizations have become more likely to monetize patents in the past decade.
Amidst this shift, divestiture emerged as a fast-growing monetization strategy. We get to say so because 71% of in-house lawyers have already divested patents or are actively exploring divestiture options.
Apart from that, legal finance has also come to play a significant role in patent monetization. In essence, 59% of law firm lawyers said that clients use legal finance for patent monetization, while 51% of in-house lawyers claimed they are actively planning or exploring the use of legal finance to support patent enforcement and monetization going forward.
Burford’s survey also revealed how US remains the top market for patent monetization due to strong enforcement mechanisms. Outside of US, Unified Patent Court (UPC) is driving change in Europe, with 74% of in-house lawyers expecting increased enforcement throughout the region.
“Companies have a significant opportunity to unlock value from their intellectual property,” said Katharine Wolanyk, Managing Director at Burford Capital and head of its intellectual property and patent litigation finance division. “In conversations with CFOs and general counsel across industries, we frequently hear that patent portfolios are viewed as cost centers rather than assets, and this research substantiates that assertion. Legal finance offers a powerful solution by transforming underutilized IP assets into a source of liquidity that can fuel business priorities and allow companies to continue the essential cycle of innovation.”
