Intellectual Ventures says it takes a technology- centric approach. In addition to buying patents, it conducts regular "invention sessions," where staff and invited technical people brainstorm on technology and market directions to develop ideas they can patent.
The Bellevue, Wash., startup has about 370 patents pending and as many as 30 new application submissions a month, stemming from about 70 invention sessions held since August 2003. The invention sessions "have been described as anything from a jazz session to herding cats to an argument," said Casey T. Tegreene, chief patent counsel for IV. The filings and submissions span computers, chips, medical electronics and nanotechnology. IV saw its first patent issued in December.
While other companies conduct similar brainstorming sessions, IV may be unique in how it will manage its patents. It plans to act as an "invention capitalist," investing its patent portfolios in spinout companies that handle licensing or build products. The startup could roll its first licensing company in six to 18 months.
Intellectual Ventures could perform the role of patent distributor, helping big companies get license revenue from second- and third-tier companies they don't have the time to pursue. It could also be an aggregator for companies that would pay a slice of their revenues to let IV become their patent umbrella--a fee that would decrease if they kicked their own patents into the pools.
IV plans future-looking patent portfolios that could rival the CPU patents of Patriot Scientific (see story, above) or the video distribution patents of Acacia Research Corp. (see story, page 20). But IV will provide an equitable method of rewarding the inventors without demanding huge settlements from companies that infringe or want to implement them.
"We want to be part of the solution, not the problem," said Brent Frei, an IV vice president and the former chief executive of a $100 million software startup he formed while working in IT support at Microsoft Corp.
Still, many say it remains unclear exactly what IV is up to. "They are buying thousands of patents, and no one knows what they will do with them," said Rich Belgard, a patent analyst in Saratoga, Calif.
According to published reports, IV got an infusion of up to $250 million from Microsoft and another sizable sum from six other partners, said to include Apple, eBay, Google, Intel and Nokia. The startup is using the money to shop for patent portfolios in areas that its partners might be seen as infringing, said Acacia CEO Paul Ryan. Ryan claims to have gotten calls from patent holders hoping Acacia might outbid offers from IV.
A spokeswoman for IV would not comment on the reports of partnerships.