close window 
Over the past four decades, the primary base of the U.S. economy has transitioned from products to knowledge. “It can be evidenced by this statistic, which amazed me when I first saw it: In 1970, 80 percent of the S&P was hard assets—inventory, equipment, real estate. Forty years later, it is completely inverted. Eighty percent of the value of the S&P 500 is now intangibles, intellectual property, good will, and know-how,” said Michael Anglin, ’03, chief operating officer of ICAP Ocean Tomo, an independent intellectual property broker that matches patent sellers with appropriate buyers.
Anglin shared his thoughts at a May 1 event sponsored by student-led Technology Entrepreneurship Chicago, an Evening MBA and Weekend MBA student group, at Gleacher Center in downtown Chicago.
Anglin said ICAP Ocean Tomo works in two arenas: a private brokerage and a public auction. Since June 2009, the private brokerage has handled $100 million in assets, while the auction house has successfully sold $135 million in assets since 2006. At the company’s most recent auction in March of 2003, it handled $14.3 million in assets.
The bottom line: There’s money to be had for patent holders and the companies that purchase and then use that intellectual property (IP), not to mention for brokers like ICAP Ocean Tomo, which charges a 25 percent success fee.
“The market over the last 10 years has really started to understand the role of IP as an asset class,” Anglin said. “It’s still a very misunderstood asset class in some case. You have some very large companies out there who still sit on some very large portfolios of very good patents, and they really don’t do much with them.
“It’s improving as it goes along, and you’ll see the definitely the more sophisticated companies out there have an IP strategy. They have a way the go about using IP to increase the bottom line, and IP is becoming a profit center at some of those companies.”
A good IP strategy for a company depends on a number of factors, Anglin said, including:
Valuing intellectual property, however, is often difficult, Anglin said. ICAP Ocean Tomo values its clients’ patents using a variety of criteria, including the size of a potential market, the jurisdiction of the patent (because patents in developed countries are far more valuable than those in emerging markets), and whether others are or might infringe on the patent.
As the market has matured over the years, sellers are gaining more leverage, Anglin said “It’s like real estate. I put a price on it. You may like the price, and you will say yes. You may look at the price and say, ‘This is ridiculous; I’m not going to do this.’”
The topic of IP as a profit stream was largely a new one for students.
“The reason we chose this topic is it is not often covered in our asset classes,” said Wei Sun, co-chairman of the TECH group. “Many of you, like me, may be thinking the only way to make money with technology is through companies. Today Mike gave us a new way to think about how you can benefit from IP.”
Tom Wisted, a first-year student in the Full-Time MBA Program, wanted to gather information for fulfilling his post-graduation goal of starting a company. “I wanted to understand whether it’s better to start the business and compete with larger companies, or to create the intellectual property, try to sell it, and save yourself the challenges of competing,” Wisted said.
He said he was surprised to learn there’s a market purely for technology. “I wouldn’t have to visit companies themselves to see if they are interested in a patent. I could hire a broker because there’s an actual marketplace that exists.”
—Patrick Ferrell