Concluding our 2016 Patent Market Report with an in-depth view of current patent market size and reflect our on our key findings and action item of the year. Even with some setbacks in 2016, the patent market continues to be strong and robust. Once again brokered market has shrunk we estimate that actual sales from June 1, 2015 to May 31, 2016 were $165 million (down from $233 million the previous year).
We have continued to reuse the methodologies adopted in last year’s article to simplify the analysis by using the actual observed sales which were executed in the 2016 market year, along with their asking prices. As with last year, if no pricing guidance was provided, the average asking price per asset for that market year (e.g., $197,000 for 2016 market year listing) was multiplied by the number of assets to determine the expected asking price.
In the 2016 market year, 118 sales were identified, accounting for a total asking price of $242 million. We know that some of the sales in that period have not yet been recorded – estimated at approximately 3% – so we reduced our standard 35% discount between the asking price and the expected selling price to 32%. Thus, our expected total market size for the 2016 market is $165 million. In our analysis last year, we estimated the 2015 market at $233 million, so the market has declined by approximately 30%.
Market conditions
The evolution of patent market continues as more companies look to participate. Companies should define success in their patent buying/selling programs with metrics calibrated to market data. Through focused sourcing and intake processes, buyers can streamline their processes to identify high-value patent more effectively. Further, buyers can leverage the market pricing data that we provide and pair it with company specific valuation model. Buyers expectation have helped to drive market to be more efficient, more and varied source of patent.
