University of California Generates Millions From Patent Infringement & Royalty
Add two more intellectual property (IP) exchanges to my October 30th post Advantages of Open Innovation . Just this week, I have seen two more articles supporting upward trend in IP aggregators. Intellectual Ventures LLC and number of prestigious research institutions like University of California are increasingly vying to buy and license you patents. Some universities are making hundreds of million from royalty and fee income. Could this be the new investment vehicle for private investors and hedge funds?
The University of California is a major patent player. It receives by far more patents from the U.S. PTO than any school in the country. Its generated about $500 million in patent royalties and fee income in the past five years. It also aggressively uses the courts. As a plaintiff alleging patent infringement, the school has settled a claim against Genentech for $200 million, secured a payment of $185 million from Monsanto, and won a $30 million settlement from Microsoft. Full story - Critics Take Aim at California's Patent Shield.
Intellectual Ventures investment firm is seeking $2 billion to expand its vast portfolio of patents. According to The Wall Street Journal, the firm plans to spend a $1 billion to acquire patents and another $1 billion to develop patents globally. The firm claims it generates hundreds of million in revenue from licensing Patent Firm Lays Global Plans .
Intellectual Venture's business model has stirred debate. Officials from some U.S. universities -- including Stanford University and Massachusetts Institute of Technology -- say they aren't working with the firm because they worry it could use its patents for litigation or other purposes that don't promote innovation.
"We want to work with companies that are really going to develop the technology, and I'm not sure if they will or not," said Katharine Ku, who heads Stanford's Office of Technology Licensing. "They keep saying they're not a litigation play necessarily, but we'll just see."
Mr. Myhrvold noted that his firm has deals to buy or license patents with more than 80 universities, including the University of California system and Boston University, "so any reluctance to work with us is a distinctly minority view." He said that his firm simply wants to get "fair compensation" for new inventions, and help inventors do the same, and that its goal has always been to create a more liquid market for intellectual property. Full story - Patent Firm Lays Global Plans: Intellectual Ventures Is Seeking $2 Billion As Strategy Shifts.
Depending on your perspective, innovation just got easier or more complicated. Dot your i's and cross your t's carefully.