Allied Security Trust had its best year ever, and every patent owner who has tried to sell, license, or enforce a patent should read the numbers carefully.

On October 30, AST announced the results of its eleventh Industry Patent Purchase & Licensing Program. Twenty-seven member companies reviewed 1,384 accepted lots covering 1,493 patent families, and selected 70 of them. Members committed $5.625 million, up from $5.139 million the year before. Deal count rose 49% over 2025. Forty-one lots were acquired outright; 29 were licensed through group sublicenses. On average, 3.6 members shared the cost of each deal.

Read that from the seller's side of the table.

More buyers, more transactions, more money moving into the patent market, and a path to cash that does not require four years and a validity fight. For a university or an independent inventor, that is a real option worth having. But the same structure that works beautifully for twenty-seven of the world's largest technology companies can work badly for the person on the other end of the wire, and for a simple reason: patent owners make money when buyers compete against each other, and defensive aggregation is built to keep buyers from having to.

That is not an accusation of illegality. Whether AST, RPX, or any other defensive aggregator has violated the antitrust laws is a separate question that turns on agreements, market definition, and competitive effects, and I am not answering it here. What I am saying is narrower and ought to be uncontroversial. Defensive aggregation is not a neutral marketplace built equally for buyers and sellers. It is a purchasing mechanism organized for the benefit of the buyers. The more successful it becomes, the more patent owners need to understand what it does to price.

Price discovery requires someone to bid against

Patents are peculiar assets. There is no exchange, no ticker, no screen telling you that Patent A is worth $2.3 million at 10:31 this morning. Value gets discovered one transaction at a time.

One company looks at a telecommunications patent and sees nothing. The next one sees a claim that reads on a product line generating billions. A third wants it because it plugs a hole in an existing portfolio, and a fourth wants it because the third one wants it. That spread of views is where price comes from. The owner does not need everyone to value the patent highly. The owner needs two buyers who value it enough to compete.

Every other valuable asset works this way. A house sells for more with three bidders than with one. So does a company, and so does an NFL franchise. Patent portfolios are not an exception to the rule.

Defensive aggregation changes that arithmetic. Rather than approaching the market as fully independent purchasers, Cisco, Google, IBM, Intel, Meta, Microsoft, Oracle, Snap, Sony, Spotify, Uber, Verizon and the rest of the IP3 membership can evaluate the same asset collectively and split the check. AST publishes that list itself. The efficiency is obvious. Why anyone would assume the arrangement also maximizes what the seller receives is less obvious.

The seller names the price. That answers less than it appears to.

There is a ready response to all of this, and it deserves a fair hearing: AST does not dictate anything. Under IP3 the patent owner sets the asking price, the price is fixed and non-negotiable, and the owner chooses whether to offer the assets for sale, for a group license, or both. Nobody from the buyer group calls an inventor and says take $50,000 or leave it.

True. It still leaves the harder question untouched. Who sets the conditions under which the seller decides what to ask?

Suppose an owner believes some mix of Google, Microsoft, Cisco, Intel, Meta, Oracle, Sony, and Verizon has exposure to the portfolio. Run that as a conventional sale and the owner approaches them separately. One offers $100,000. Another offers $250,000. A third offers $500,000 because its exposure is different in kind. A broker uses the first expression of interest to flush out the second. A pending enforcement campaign adds urgency. By the end, the owner knows who cares most, and negotiates against that knowledge.

Now put the same portfolio into a fixed-price program. The owner supplies one number, and the companies evaluate it together. The owner never learns which of them was interested; AST's own FAQ tells sellers plainly that it buys on behalf of a group and will not identify any particular company's interest in their patents. The members know how many of them are in. The intermediary knows whether the lot drew broad attention or none. The seller knows neither, and AST's 2026 results confirm how much that information is worth: lots that drew interest from several members were far more likely to be funded, and 242 of the 1,384 lots emerged as the ones members converged on.

The owner sets the number on the form. The owner sets it without knowing the single most valuable fact in any auction, which is who wants the asset and how badly. That is price discovery with one side blindfolded.

One payment, up to thirty-five releases

The licensing track deserves closer attention than it usually gets. The owner sets one total price for a non-exclusive group license, and IP3 may sublicense the patents to as many as 35 members during the sublicensing term. Group sublicenses made up 41% of this year's deals, up from 30% in 2025.

Economically, one payment can clear the exposure of a large share of the world's biggest technology companies. For the members that is an excellent trade. For the owner the question is what those same licenses would have been worth if each company had to negotiate on its own.

Take five companies whose products read on the patent, and assume they would independently pay $200,000, $150,000, $125,000, $100,000, and $75,000 for peace. Negotiated separately, that is $650,000. Inside a collective structure the owner may take $300,000 for the group license, and may be entirely rational to do so, because the money is certain, immediate, and costs nothing to collect. Rational is not the same as market value. The buyer is purchasing efficiency. The seller is selling competition.

Volume is not the same as leverage

AST's own figures sharpen the point. Seventy deals, against 47 in 2025 and 51 in 2024. Investment up 9% year over year and 34% above 2024. A record program by any measure AST uses.

Then look at the other number. The 2026 program averaged $80,357 per lot, with prices running from $8,000 to $350,000. The 2025 program put $5.139 million into 47 deals, which works out to roughly $109,000 per lot.

That comparison proves nothing on its own, and I want to be clear about that. The technology mix changed. The quality of submissions changed. The share of group licenses jumped eleven points. Two annual averages cannot carry a causal argument. But the pattern is worth noticing, because transaction volume rose by half while the average seller took home less. Walmart buys more units than the hardware store on the corner. Its suppliers do not get better prices.

What the exclusivity period actually costs

The program's timing rules matter too, and they get less scrutiny than the headline numbers.

IP3 opens with a non-exclusive review period, during which sellers can keep marketing their assets elsewhere — through August 30 this year. On August 31 the exclusivity period begins, and a submission still in the program at the asking price has to close through IP3. Under the program's terms and conditions, the seller agrees during that window not to sell, transfer, litigate, or otherwise encumber the submitted patents, with non-exclusive licensing carved out for sublicense submissions, and if AST sends a tentative notice of intent to move forward, that restriction continues past the stated end date while the parties work to close.

Exclusivity is not sinister. M&A deals use it, brokers use it, bankers use it. The question is always the same: what does the seller get for it, and what does the seller give up?

For a patent owner with a genuinely valuable asset, time is leverage. A product launch is leverage. A favorable claim construction is leverage. A competitor's lawsuit, hard evidence of use, a damages period running toward trial — all leverage. Signing away five weeks during which you cannot create an alternative transaction or an enforcement event is a real concession, and it should be priced as one. In most negotiations the most valuable thing a seller owns is not the asset. It is the ability to walk.

The model is doing exactly what it says it does

None of this should surprise anyone, because the aggregators have never hidden the ball.

AST describes itself as a member-driven cooperative that reduces patent risk for leading technology companies through cost-shared acquisitions and licenses. RPX has been equally plain for nearly two decades. It was founded to cut cost and risk for corporate legal departments, it buys patents preemptively before they become expensive litigation, and its members pay an annual fee in exchange for a license to everything it acquires. RPX has told the SEC that its syndicated transactions, where clients contribute money beyond their subscriptions to fund a particular acquisition, are designed to share resources efficiently and collectively reduce litigation risk.

The customer is the operating company. The product is reduced patent risk. The benefit is reduced patent cost. Why would anyone expect a structure built on that premise to maximize what the patent owner receives? That is not a criticism of anyone's management. That is the model working as designed.

In any other market this would be an obvious question

Picture twenty-five manufacturers that all need a specialized component. Instead of negotiating separately, they build a mechanism where suppliers submit a single fixed price, the manufacturers review the offerings together, several of them split the cost of whatever they take, and the supplier never learns which manufacturer needed the part most. No one would be puzzled if suppliers started asking what that structure did to their bargaining power.

Federal competition policy has already answered the general question. Guideline 10 of the 2023 Merger Guidelines addresses mergers involving competing buyers and asks whether they may substantially lessen competition for workers, creators, suppliers, or other providers, on the straightforward premise that a combination of buyers can harm sellers the same way a combination of sellers harms buyers. Both agencies confirmed in February 2025 that they would continue reviewing transactions under those guidelines. None of that establishes a violation by AST, RPX, or anyone else; antitrust liability requires agreements, markets, effects, and efficiencies, and a purchasing consortium alone does not supply them.

The economics, though, are old law. In Mandeville Island Farms v. American Crystal Sugar Co., decided by the Supreme Court in 1948, three California refiners agreed to pay uniform prices for sugar beets, and the growers sued. The Court held the conspiracy was the kind the Sherman Act forbids even though the price fixing was done by purchasers and the plaintiffs were sellers rather than consumers. Sellers get hurt when buyers stop competing. That proposition should not become controversial because the asset in question is a patent instead of a beet.

Thin markets make this worse

Patent owners carry a disadvantage that commodity sellers do not. The asset is illiquid and the pricing is opaque. Richardson Oliver Insights built an entire data business on that opacity, and reports having tracked tens of billions of dollars in patent assets offered on the secondary and brokered markets since it began measuring them.

For any given portfolio there may be a handful of realistic buyers, and those buyers tend to know each other. They use the same brokers, hire the same valuation consultants, sit in the same industry groups, face the same assertion entities, subscribe to the same analytics platforms, and may belong to the same defensive aggregators. With a thousand potential buyers, losing competition among five of them is noise. With eight realistic buyers, five of whom can handle the transaction collectively, it is the whole ballgame.

Liquidity and competition are not the same thing

AST provides something real. It creates liquidity, lowers transaction costs, and puts an asset in front of two dozen sophisticated companies in a matter of weeks. For an owner facing $5 million and four years of litigation, taking a modest check now can be the right business decision, and I would never tell a client otherwise as a categorical matter.

But liquidity is not competition. A pawn shop creates liquidity. So does a foreclosure auction and so does a distressed-debt fund. The presence of a willing buyer says nothing about whether the seller got full value.

So the question is not whether a patent owner can sell through an aggregator. The question is what competition the owner is giving up by doing it. Before entering a group process, know who the natural buyers are, understand the actual infringement exposure, identify which companies have the greatest economic need for the rights, and test whether a bilateral license, an enforcement action, a brokered auction, or a strategic sale would establish a better price. Create the competition first. Then decide whether the fixed-price route still looks attractive.

The next debate should be about the buy side

For twenty years the patent policy debate has focused almost exclusively on sellers. Trolls, NPEs, litigation funders, contingency-fee lawyers, demand letters, venue, injunctions, damages, PTAB petitions. The premise running underneath all of it is that the system is in danger when patent owners get too good at monetizing what they own.

Look at the other side of the table for a moment. The largest technology companies in the world have become extraordinarily sophisticated patent purchasers. They have built patent departments, analytics platforms, acquisition programs, defensive networks, licensing coalitions, and aggregation vehicles, and they understand precisely what competition does to price. Patent owners should understand it just as well.

AST's record year may well show that companies would rather buy patent rights than fight about them, and there is something healthy in that. The unavoidable follow-up is this: if more and more of the companies that would otherwise compete to buy or license a patent are evaluating it together instead, who is left to bid against them?

A market in which the buyers organize while the sellers stay fragmented produces the result anyone would predict. Lower risk for the buyers. More predictable costs for the buyers. Greater purchasing efficiency for the buyers. Less leverage for the patent owner. That may be first-rate defensive patent strategy. It should not be mistaken for a competitive market for inventions.

Ramey LLP is a Texas-based intellectual property law firm dedicated to representing small patent owners, startups, and independent inventors in disputes against larger corporations.