Stepping Into the Arena with RPX and AST

Stepping Into the Arena with RPX and AST

Two of the largest and most active patent buyers in the market are RPX and Allied Security Trust (AST), and if you’ve ever considered selling or licensing your high-tech patent portfolio, you probably have considered approaching them. Read on to learn what RPX and AST are, how do they differ, and what considerations to keep in mind as a patent seller.

What is RPX?

RPX Corporation is a defensive patent aggregator, and a deep-pocketed player in the secondary patent acquisitions market. They operate on a corporate membership-based model, and acquire patent rights on behalf of their member companies to clear their clients’ collective risk and costs related to potential (or actual) claims of infringement.

Formerly a NASDAQ-listed company, RPX went private in 2018, so less is publicly known about their acquisition activity now than before. Still, in August 2020, they reported spending over $500 million for patent deals in the prior two years. RPX has been a buyer in several headline-grabbing deals in the patent monetization industry over the years, opposite of heavyweight patent owners including Intellectual Ventures, Technicolor SA, and Sisvel.

Which companies are RPX members? While the company reports over 450 member companies, few details are publicly available. However, available litigation and securities filings over the years suggest that RPX counts many of the world’s best-known tech companies, including those in the top tiers of consumer electronics, cloud, and networking and telecommunications, as among its members.

 

What is Allied Security Trust?

Allied Security Trust is also a membership-based defensive aggregator, and similarly focuses on acquiring patents that mitigate the potential risk (such as patent infringement litigation) to its members. AST touts about 50 members, some of which are publicly touted such as (at the time of this writing) Google, Microsoft, IBM, and Uber. AST’s members include startups and well-established firms in the social media, IoT, semiconductor, and automotive sectors. They are a very active player in the patent acquisitions market, and reported closing 70 deals in 2021 alone.

AST operate as a non-profit cooperative, and emphasizes its member-driven model, where decisions to acquire patents are often collaborative among its member companies. AST performs an initial screening and diligence of portfolio submissions, and hosts an online platform for members to review the qualified portfolios and any supporting documentation such as marketing materials, claim charts, and other relevant information provided by the seller or their broker.

Patent sale submissions can be made to AST at any time, and the sale timelines and negotiation process can resemble those of RPX of other buyers. However, AST is particularly active around summertime, when it runs its annual Industry Patent Purchase Program (IP3). This specific program is designed to streamline the sale process by operating on a strict set of deadlines and also requiring the seller to set, and commit to, fixed asking prices upon making a submission. In 2023, the program received over 1,000 package submissions, and 48 of them resulted in a deal.

 

How Can You Sell to Allied Security Trust or RPX?

Selling to RPX or AST is one way to achieve value recognition for your patents. The key for patent owners is to understand these collective’s buying criteria from the outset — portfolios whose acquisition offers a convincing risk reduction value among their membership will be the ones most likely to pique their interest. Being able to demonstrate that value in a technically and narratively clear, concise, and professional way can be key to getting attention for your portfolio from buyers like RPX and AST. As well, setting appropriate price expectations, and being prepared to defend (and/or adjust) them through a constructive dialogue with the potential buyer is a crucial element to setting a portfolio’s sale up for success. This process is a difficult thicket for patent owners to navigate if they go it alone, which is party why high-quality portfolios are typically represented by seasoned patent brokers who fully manage the sale process from end-to-end.

What happens if AST or RPX signal their interest in a patent portfolio? The firms each have a well-established and highly credentialed team of technical analysts, dealmakers, and contract attorneys who consider and negotiate patent deals every week of the year. They work for their dues-paying corporations. The seller sits at the other side of the table, or does their representative such as a broker. Here again, the value to a seller of having an experienced, professional patent brokerage team to manage the sale can be essential when negotiating with a highly sophisticated buyer to achieve the maximum deal value, best terms, and quickest time to close.

 

Are You Ready to Step into the Arena?

Successfully engaging and negotiating with highly sophisticated, experienced, and well-resourced entities like RPX and AST can be daunting task for any patent owner. This is why Vitek IP’s brokerage services is a game-changer for our clients.

Our team has collectively managed hundreds of deals, worth hundreds of millions in combined value, opposite buyers of all types, including defensive aggregators as well as operating companies and investors. We know the patent market’s dynamics, its current trends in buying interest and valuations, and how to present a portfolio compellingly into the market.

Having Vitek IP represent you will transform your patent selling experience. With our expertise, network, and strategic insights, we can ensure that your innovations find their place with buyers who value them most, while securing the best terms that respect their worth.