(16) For the first time, we provide near-comprehensive statistics on the size and composition of the brokered market, including the types of buyers and sellers who participate in the market, the types of patents listed and sold on the market, and how market conditions have changed over time.
(19) Almost without exception, patents offered for sale in this quasi-public market are shopped by patent "brokers," (20) and for this reason we refer to it as the "brokered market." Brokers are, in effect, the intellectual property equivalent of real estate agents.
Patent purchases that take place outside the brokered market are both harder to observe and harder to categorize.
(38) To estimate the percent of the brokered market that our data covers, we benchmarked our data against internal datasets maintained by multiple entities that operate large patent buying programs.
We elected to limit our data collection to the brokered market and, thus, our database does not include any "private" transactions.
However, as shown below in Figure 2, most packages offered on the brokered market were quite small.
Finally, we estimate the size of the annual brokered market. Correcting for gaps in our data's coverage, we estimate that the brokered market for patent sales exceeded $225 million per year.
Only by attempting to bypass the global brokers can these players create value in a brokered market
. The most attractive markets for such insurers are small and midsize businesses, where high transaction costs provide a price umbrella for entry by insurers who bypass brokers.