“I don’t know what to say. I guess I’ll go to the bathroom...and then call my partner,” said a visibly stunned Ballantyne, a systems engineer based in Nepean, Ontario.
The bidding had started at $300,000 and got up to $850,000 when bids stalled briefly.
“I was worried at that point because we had set a [minimum sales price] and I thought it would not hit it,” he said. But in another brief surge of bidding the patent hit the $1.4 million mark. Even though Ocean Tomo had officially valued the patent at between $2 million and $5 million when the hammer came down the $1.4 million bid had surpassed Ballantyne’s reserve price and his expectations.
It was not immediately clear who the buyer was. However, one company involved in buying and enforcing patents, Acacia Research, is currently in a court fight in Northern California with a number of cable and satellite TV companies over Acacia’s patent portfolio relating to video-on-demand. Any of the parties in that litigation could have desired the patent to improve their negotiating stance.
Patent attorneys from large companies have expressed fears that patent auctions could serve the interests of patent “trolls,” companies like Acacia who have no products or services beyond buying and enforcing patents against established firms. However, lone inventors and small firms like Ballantyne’s, have said an auction might be the only way they can sell their patents because large companies typically ignore them.
In the first half of the auction, Lot 21, a group of about 36 patents mainly from Eaton Corp. and related to an automotive torsion mechanism got the highest bids. But at $1.9 million, the price still fell below the owner’s minimum expectations, so they were not sold.
Lot 19, a single patent from 3Com for a flash memory module fetched $950,000 in the first flush of competitive bidding from the floor. The sale generated applause from the audience, briefly breaking the ice in an otherwise relatively stiff and serious atmosphere.