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Intellectual Ventures, IP, IP Asset, Patent

The Intellectual Ventures Investment List — An Unwelcome Revelation?

(With corrections — 11:30 AM 5/19/11)

By way of IAM and PatentlyO, a fairly comprehensive list of investors in Intellectual Ventures published yesterday.  Rather than re-hash the list, I’ve just embedded the disclosure statement below.  In general, what’s interesting about this revelation is the fact that companies pushing hardest for patent reform, like Patent Fairness Coalition members Google and Cisco, are now exposed as having a “financial interest” in the outcome of IV’s patent litigation.

Back in December, Gametime IP noted that IV’s litigation meant the firm would “inevitably expose more about its business model and structure than was previously known.”  IAM noted similar comments from Dan McCurdy:

As you know IV has operated since the beginning in great secrecy under the cloak of non disclosure agreements. Details on who has financed them, who has taken licences and for how much, their purchase practices, prices they have paid for purchases, sharing arrangements if any with patent sellers, accounting and tax treatment of revenues, licensing techniques and practices, the extent of patent holdings, subsidiaries and affiliates, and other details may all be relevant to the defence. Obviously the case will be closely watched.

On those same lines, Dennis Crouch notes that IV “has played extensive games in an attempt to stifle the utility of the patent ownership recording system.”  These “games” would presumably include things like holding, but not recording, certain assignments and using a series of holding companies that each own separate properties.  Of course, recording assignments is primarily for the patent owner’s benefit, and while policies are used to encourage recordation, it certainly isn’t required.  IV is free to record assignments, or not, at its own peril.

Today(Ed. note: Joff’s story broke yesterday, shortly before PatentlyO. Apologies to Joff and IAM for the mixup.) Meanwhile, Joff openly asks whether this is one of those “unwelcome revelations from IV’s perspective.” This revelation may be unwelcome for companies like Cisco and Google, but probably not from IV’s perspective.  Investment in one of the IV funds is, in effect, an investment in IP assets (a class of assets currently gaining respect and recognition).  In other words, investment by many respected operating companies and financial institutions into IV’s business model demonstrates a more sophisticated understanding of IP as an asset, and a practical approach to IP licensing.

Basically, in addition to participating as an investor, each operating company is presumably free to practice any of the patents held by that particular fund.  Xilinx, the company suing all of these IV funds, is also a participant in two of them (Invention Investment Fund I, L.P., and Invention Investment Fund II, LLC).  This is an interesting nuance to the case, since it would appear that Xilinx is being targeted with certain IV patents, and may have either failed to secure the correct licensing rights, or simply made a bad choice in picking the funds to invest in.

The list of investors can be seen here:

View this document on Scribd



6 thoughts on “The Intellectual Ventures Investment List — An Unwelcome Revelation?

  1. I certainly don’t blame all of these entities for having invested in Intellectual Ventures; in fact, I’ve considered doing so myself. Whether or not you want to call the company a “patent troll,” IV has successfully demonstrated the efficacy of its version of the NPE business model. IV has simply proven that it’s ahead of the curve in realizing and capitalizing on this new way of doing business.

    Posted by patent litigation | May 23, 2011, 5:52 pm


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