Growth of the patent secondary market complicates life for in-house patent counsel

Work has become more complicated for patent lawyers as organizations have combined to create ways to buy and sell patents. What a recent conference presentation referred to as the “secondary market” can be thought of as “offensive buyers,” “defensive buyers,” and “brokers.”

The offensive buyers of patents include Intellectual Ventures, founded by Nathan Myhrvold after retiring from his position as chief strategist and chief technology officer of Microsoft Corporation; Altitude; Acacia Technologies, where Paul Ryan is CEO;
Rembrandt Management Group,and Winn.

A hedge fund founded by Robert Kramer in 2005, raising $250 million from hedge funds and others to invest in intellectual property. According to Forbes in mid-2007, other hedge funds include Coller Capital, a London private equity firm that formed Coller IP Capital with an eye toward investing $200 million a year; Rembrandt IP Management, a Bala Cynwyd, Pa. firm that has raised $150 million; and Northwater Capital, a $9 billion Toronto manager of funds of hedge funds that formedNW Patent Funding in 2006. Forbes wrote that “these funds exist solely to exploit patent lawsuits in the U.S.”

The “defensive buyers” include RPX, Allied Security Trust, and Open Invention Network.

The presentation slide also mentioned brokers such as IPInvestments, Ocean Tomo, IPotential, Inflection Point, TechInsights,
and TAE US.

Those who wield, aggregate or broker patents complicates immensely the life of patent counsel in companies (See my post of Sept. 25, 2008: cottage industry of patent services.).

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