Joff Wild has already thoroughly covered this story (See: It was Micron’s idea to create an NPE to monetise its patents, Round Rock founder reveals), but I just wanted to confirm (as if there was any doubt) that I too was in the room, and I heard exactly what Wild heard. Specifically, it was toward the end of Day 1 at this week’s IP Business Congress in San Francisco, and John Desmarais admitted the following:
- Micron approached him about buying their 4500 patents.
- He didn’t initially want to do it.
- Micron persisted and ultimately Desmarais agreed. (Note to operating companies, if you’re begging to divest yourself of IP assets and your first choice turns you down, feel free to give me a call, eh?)
- It was ICAP that came up with the idea to auction covenants not to sue for Round Rock’s patents.
So, not only was Micron looking for a way to raise cash and reduce expenses by clearing 20% of its patents off the books, it seems that they were motivated to the point that they continued to pursue and convince Desmarais of the value the opportunity presented.
In fact, ICAP’s proposal of using the CNS auction was probably even more significant to Desmarais financially, as a single auction raised $35 MM in gross revenue. Again, as with Micron, ICAP initially approached to persuade Round Rock to put some of its patents into the auction. While that was evidently a non-starter, the CNS idea, and some prodding by Dean Becker, got his attention.
Seriously, check out Joff’s story for more details, including the dramatic costs the portfolio must have been imposing on Micron (such as 27 different law firms being initially responsible for various portions of the portfolio). Meanwhile, Desmarais also had another interesting comment. On a weekly basis, he gets approached by operating companies interested in outsourcing their patents to private investors exactly as Micron has. About this, he advised that companies should not look to maintain any significant level of interest or control over the patents (implying that Micron similarly has no say in Round Rock’s actions).
Of course, we’ve yet to hear of Round Rock II, (or maybe Flat Stone, LLC), so it’s unclear whether Desmarais has executed on any of these additional opportunities … Maybe he’s waiting for the talking dog to tell him what to do.
- HTC Quietly Dismissed From Round Rock Patent Litigation (gametimeip.com)
- Ocean Tomo ‘Freedom To Operate’ Auction Helps Patent Owners Build Value (gametimeip.com)