How Much to Sell and When: Optimal Staged Divestiture of Patent‐Linked Royalty Claims Under Risk, Illiquidity, and Finite Horizon

Abstract

Patent owners can sell a royalty interest in stages rather than all at once. This paper asks how much to sell now when claim values are uncertain, buyers are costly to reach, and patent expiry limits the time available. A decision model produces sale schedules that adjust to current value, the share retained, and time remaining. In the baseline scenario, placing more weight on downside risk accelerates sales and narrows the proceeds distribution at the cost of lower average proceeds. Greater volatility does not imply one fixed response, and costly placement can leave part of the claim unsold at expiry.