Access practice tools, as well as industry leading news, customizable alerts, dockets, and primary content, including a comprehensive collection of case law, dockets, and regulations. Leverage...
Intellectual Ventures Management LLC emerged as one of the top patent buyers in the U.S. brokered market in the fourth quarter of 2016, after a year of sporadic buying activity from the patent licensing company, according to data reviewed by Bloomberg BNA.
Through two of its subsidiaries, the Bellevue, Wash.-based Intellectual Ventures escalated its buying activity by purchasing a total of 172 assets, compared with no purchases in the same period a year ago, according to data provided by Richardson Oliver Law Group LLP (ROL). ROL advises companies on patent acquisitions in the brokered market.
Intellectual Ventures’ activity on the brokered market declined last year when it bought no assets in the first and third quarters and made a small purchase of eight assets in the second quarter. Known for buying patents, charging companies to license its IP and suing them if they use it without permission, privately-held Intellectual Ventures is closely watched in the patent market.
After a funding round in 2013, Intellectual Ventures went on a buying spree in the brokered patent market in 2014 and 2015, buying 4,679 and 1,777 assets, respectively, according to ROL data. In comparison, it bought a total of 180 assets in 2016.
“Intellectual Ventures just hasn’t gone away,” Kent Richardson, an ROL partner said. “Anybody who was hoping that they would go away is going to be disappointed.”
Compared to previous years, though, Intellectual Ventures is now “much more selective in what they buy and their resources are limited,” Richardson said.
ROL Group tracks the reassignment of patents from various listed packages, comprising numerous assets for sale, to identify when a sale is executed. Due to a lag in recording reassignments at the Patent and Trademark Office, ROL Group assumes that a given package is sold if any of the U.S. patents listed in the package are shown as reassigned in the PTO’s system.
Intellectual Ventures could not immediately be reached for comment.
Founded in 2000 by former Microsoft Corp. Chief Technology Officer Nathan Myrhvold, Intellectual Ventures has raised over $6 billion to purchase patents and owns around 70,000 intellectual property assets, according to its website. The company has 40,000 intellectual property assets in programs to grow revenue through licensing and related litigation.
In the fourth quarter of 2016, Intellectual Ventures purchased patents in the brokered market from Japanese electronics maker Panasonic Corp. related to wireless communication technology and electric motor-driving devices used in appliances such as air-conditioners, according to patent assignment listings on the PTO’s website.
It also bought patents on technology that connects computer networks and users of cloud computing from computer programming services company Adaptive Computing Inc.
Brokers can help companies acquire patents in fields where competitors and likely legal adversaries operate, giving them defensive leverage against infringement claims. While the brokered market represents a small portion of the overall market for patent sales between companies, it can help illustrate broader trends.
For instance, the number of cloud computing and semiconductor technology patent assets spiked in the fourth quarter of 2016. In the third quarter, the fast-growing cloud computing market saw 123 patent assets in eight deals or packages sold, compared to three deals involving 67 assets in the third quarter.
The U.S. Supreme Court’s June 2014 decision in Alice Corp. v. CLS Bank Int’l resulted in the invalidation of hundreds of software patents for covering ineligible abstract ideas. Recent case law and regulation have increased the risk related to buying software and business method patents, including e-commerce and financial technology patents.
Buyers, including Intellectual Ventures, see less risk in semiconductor technology and cloud computing patent purchases, Richardson said.
A transaction involving semiconductor technology patents by Mitsubishi Group to electronics component maker Murata Manufacturing Co. Ltd. appeared to be one of the top sales with the largest number of assets sold in the quarter, according to data from ROL and the PTO’s online assignment listings.
Pressured by tough competition from Taiwan and China, some of Japan’s electronics makers have begun selling off and licensing patents in recent years, Richardson said. Since 2014, at least half of the top ten sales in the brokered patent market have been semiconductor deals, he added.
The number of assets available in the market dropped 13.2 percent to 2,478 new assets in the fourth quarter from the previous quarter.
The number of patent packages listed rose 3.5 percent to 147 from the third quarter. However, 2,855 assets listed in the third quarter were offered in a smaller number of patent packages .
The median asking price per new asset listed by patent brokers was $150,000 in the fourth quarter. That reflected increases of 38 percent from the previous quarter and 80 percent from the fourth quarter of 2015.
Brokers matched buyers and sellers for 28 deals on packages of related patents during the quarter, according to ROL data. Those deals totaled 637 assets, comprising 395 granted or pending U.S. patents, while the remaining amount represented granted or pending foreign patents.
By comparison, 565 assets were sold in 35 brokered patent deals during the third quarter of 2016. In the fourth quarter of 2015, 554 assets sold in 33 patent packages.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)