Intellectual Ventures Stops Buying Patents

Intellectual Ventures has stopped buying patents on the secondary market based upon an ‘investor driven decision.’ Removal of this dedicated capital from the market likely means a continued depression of patent prices — especially for patents not directly tied to a product currently on the market.

Although IV is only a small part of the secondary patent market, it filled an important niche for patents not currently being infringed and not purchased as part of a larger business transaction such as a merger, buyout, or technology transfer and license agreement.  Rather, IV’s focus has been on aggregating.

Of course, IV will continue to monetize its many assets via enforcement actions as well as sales.  Jack Ellis at IAM-Market describes a recent sale of more than 1,000 IV patents to Dominion Harbor. [LINK]

As Ellis writes, “some canny players may see the gap in the marketplace as presenting an exciting opportunity” to buy up patents at a depressed price.

Dennis Crouch

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

70 thoughts on “Intellectual Ventures Stops Buying Patents

  1. From IV’s Website:
    “..70,000 IP assets acquired and nearly 40,000 in active monetization programs, our patent portfolio spans more than 50 technology areas from agriculture to software.* Our patents come from within our own Lab** as well as individual inventors, start-ups, large corporations and research institutions.”

    *Have there been IV lawsuits on technical subjects NOT broadly related to results that could be accomplished with some kind of software? {I have not looked for it.}

    **The IV website also says that IV is one of the largest filers of patent applications. There were prior reports of their holding large “brainstorming” sessions with technology experts and patent attorneys to generate conceptual patents.

    1. Paul >>*Have there been IV lawsuits on technical subjects NOT broadly related to results that could be accomplished with some kind of software? {I have not looked for it.}

      Really Paul. So, software isn’t technical. I wish people like you would put up or shxt up. Try using patent law and real science and technology. This whole business of generating a new abstract term, the witch words, and then some w@nker like you telling us what that witch term means or that any invention that is that witch word is bad.

      So sick of people like you. Try switching to patent law and science and getting out of the witch burning business.

          1. The type of patents that IV has been filing losing lawsuits on is a matter of record, not opinion.
            If you want to speculate, I would speculate that IV is NOT having that kind of difficulty in licensing OTHER technologies, hence, far less lawsuits.* Hence, my question about that.

            *It is also indisputable from the PTO’s records that the odds of the patent owner succeeding in avoiding or winning IPRs are very much higher for OTHER technologies.

            P.S. Although irrelevant, as a mere personal opinion, yes, I do think that novel and unobvious software-enabled inventions that are sufficiently 112 disclosed in a patent spec [rather than kept 112-un-enabled trade secrets] [at least a specific enabling algorithm] ought to be patentable.

            1. The type of patents that IV has been filing losing lawsuits on is a matter of record, not opinion.

              That does not address YOUR decision to post and try to make a distinction, Paul.

              I would speculate that IV is NOT having that kind of difficulty in licensing OTHER technologies

              What do you mean by “OTHER” technologies (since software is something that is present in so many different technologies?

              And why would you CHOOSE to speculate so?

              For all the “I feel” of your last paragraph, your choices show a different bent.

            2. Their photon enhanced thermionic emission patents (they call them field effect heat engines, lol) are garbage, as are their CRISPR patents, and I suspect the rest of their portfolio is as well. But:

              1) good luck doing a capital intensive startup when those patents are in force and would kill tentative investment
              2) these are likely 5-10 years off (being generous).
              3) Much easier to buy garbage software patents, because that’s the chief export of the USPTO.

                1. Oops. They own field effect heat engine patents (likely all anticipated by work in the 70s since the claims suck), only have pending CRISPR patents with lame specs.

                  Assignee search Elwha LLC.

  2. IV got itself into this financial situation by aggressively pursuing losing patent suits against major companies willing to fight back on very broad functional end result claim patents with obvious Alice-101 problems.
    P,S. I thought the below was an interesting article, especially in contrast to constant allegations on patent blogs by some patent attorneys and inventors that AIA IPRs, and Mayo & Alice Sup. Ct. decisions on 101, etc., have made ALL patents worthless. Who are all these patents still being sold to via these patent brokers if the PAE business is as dead as some others claim?

    link to ipwatchdog.com

    1. “IV got itself into this financial situation by aggressively pursuing losing patent suits against major companies willing to fight back on very broad functional end result claim patents with obvious Alice-101 problems.”

      Word.

      They were also the l0sers who got smacked by the Fed. Cir. in In re Jung. Their arguments were so s!lly as to almost defy belief. That they wasted $$$ on that appeal is evidence of their st00p!dity.

  3. So it only took IV a few years longer than it took Ray Niro to comprehend the direction in which things were headed…

    1. Exactly Atari Man. Exactly.

      Patents are worth about 20 percent of what they used to be worth.

      The question is when/if we reach a tipping point where large corporations stop filing patent applications and lock-down their employees with trade secret law.

      That will be a disaster.

      1. Patents are worth about 20 percent of what they used to be worth.

        Good news.

        Our key takeaway from pricing data is that asking prices have stabilized from 2015 to 2016 (see Table 3). Asking prices have changed only negligibly from last year, both per asset and per US-issued patent. Average price per asset increased by 3.7%, while average price per US-issued patent dropped 0.8%. The standard deviations, though still quite large, have also dropped. It is possible that the fall in asking prices has been arrested.

        Maybe we are not headed toward that tipping point as quickly as one might have feared.

    2. What is happening now is the politicians keep damaging the patent system and it isn’t completely broken yet–but nearly is–and, the CAFC judges keep kicking it.

      Then you get these unethical academics like Lemley who recently presented at a conference with the hypotheses that all the weakening of the patent system had not lowered the number of patent applications so it was having no effect. Yet, Lemley did not normalize for foreign filings or the increase in high-tech for the economy. So, Lemley broke bright-line rules of ethics, which is typical for Lemley.

      I have a friend who grew-up in China and moved here and now is a professor in science at one of the top universities in the US. He talks about how the US is becoming a third-world country and how we are destroying our entire country. A good start would be bring Lemley up on charges for unethical conduct and for the professors to do it themselves.

      1. I think we will reach a tipping point when some large companies decide that trade secrets are a better way to protect their IP. It probably will be some kind of highbred where companies like Google lockdown their employees with trade secret law and then file some patent applications where they cannot hide the tech (e.g., interfaces), so they can use it to harass small companies.

        Let’s all remember what I predicted about 10 years ago. That the large companies were going to morph this into a system that only worked for them. We now have that.

        1. I think we will reach a tipping point when some large companies decide that trade secrets are a better way to protect their IP.

          Sadly, I worry that you are right about this.

          1. That has been ‘true’ since long before Bilski. Most software patent applications describe black boxes with no details on the secret sauce. The only change is that the expected value of applications for results-defined black boxes has decreased.

            1. Here we have more witch words from Ben. “Results-defined black boxes” is a witch phrase. This has no meaning in patent law. And apparently what Ben would like to do is set-up an abstract word in his head and then tell us all what the test is to determine whether something is the abstract word in his head.

              Try to use patent law if you have a point. I am sure you do not.

              1. The proof of validity of your ramblings would be if software practitioners actually used patents for research or learning purposes.

                They don’t.

                So what’s the difference to society between a trade secret and a patent if the disclosure is never used by anyone?

                Witch words indeed.

                1. Martin, what patents do is disclose. The disclosure of patents is used by software developers. I work with start-ups who use them and can read them.

                  Moreover, what patents do is disclose so that the inventor can then talk about the invention and publish articles about the invention in technical journals, etc. This is very, very common.

                  How can you have spent so much time on patents Martin and still not know so many basic things?

                2. It is because Mr. Snyder has a pre-conceived agenda and only gloms onto things that reinforce his existing belief structure.

                3. “Fill your claims with unnecessary loop-holes to satisfy the whim of an examiner who has a dent in his head and needs some counts renders the whole process next to worthless. ”

                  This is the same silly, tired argument that “actual” scientist, engineers, researchers, etc. “don’t read patents” so patents are worthless “for research and learning purposes.”

                  What patent applications do to promote innovation is allow the inventors to disclose their technology in other ways, after the application is filed, in ways that “actual” scientists, engineers, researchers, etc. will learn from. For example, after the application is filed the inventors may safely publish in a technical journal that “actual” scientists, engineers, researchers, etc. do read. Or the inventors may release a product that includes the technology. Or license the technology to a third party.

                  That’s how patents promote disclosure and progress. Nobody is expecting people to sit around all day and read patents. That’s nothing but a straw man.

                  You should know this already.

                4. The first paragraph should be Mr. Snyder’s

                  “The proof of validity of your ramblings would be if software practitioners actually used patents for research or learning purposes.”

                5. Just a reminder: “Actual scientists” have been publishing their discoveries without patents since forever, in quantities that — by comparison — render the patented disclosures miniscule by comparison.

                  This is a feature, not a bug.

                  The concept that you need to file a patent on every bit of information or logic that is potentially “useful” to anyone is a relatively new one. It’s a cancer on the system.

                6. Just a reminder: “Actual scientists” have been publishing their discoveries without patents since forever, in quantities that — by comparison — render the patented disclosures miniscule by comparison.

                  This is the sort of thing where quantity is much less important than quality. My entire career output did much less to advance scientific knowledge than one single paper by Kary Mullis, but Cetus would not have let him publish that paper if the patent application were not first on file.

                  The concept that you need to file a patent on every bit of information or logic that is potentially “useful” to anyone is a relatively new one. It’s a cancer on the system.

                  I expect that this is also true. Your point and AAA JJ’s are not really mutually exclusive. There are some discoveries that are only going to be made with a patent system in place, and many others that would be made regardless. It does no one any great favors to encumber the second category with patent thickets.

                7. There are some discoveries that are only…

                  That should have been “There are some discoveries and disclosures that are only…”

                8. “Just a reminder: “Actual scientists” have been publishing their discoveries without patents since forever, in quantities that — by comparison — render the patented disclosures miniscule by comparison.”

                  And your point is…what?

                  “The concept that you need to file a patent on every bit of information or logic that is potentially ‘useful’ to anyone is a relatively new one. It’s a cancer on the system.”

                  That’s a pretty neat straw man you’re beating. Getting your jollies?

      2. Sadly, there is no such “bright line rule.”

        If there were one, then action could be taken.

        Strange is it not, that the attorney profession has ethics rules based in part on our proximity and ability to influence law and those teaching attorneys (and ALSO actively seeking to influence law) do not…

        1. Actually, in academia it is a bright line rule. The professors on here that pretend to care about ethics and write about it are a joke–a joke.

          If you care about ethics, then police your own. What a joke you are.

  4. What percent of all granted US patents are held by IV at this presumptive point of “Peak IV”? Any ideas?

    1. What percent of all granted patents are involved in actual litigation?

      What percent of all individual claims of granted patents are involved in litigation?

      Those answers might provide some context to the answers to your question.

    2. MM we all know what is coming. When you retire from your paid blogging job you are going to write a post laughing your head off at us.

  5. Oh how this will be flogged by the maximalists as proof that innovation has been crushed and that the patent right has been rendered worthless by Alice et al.

    Meanwhile, if IV finds a worthy patent to purchase here or there, do you think they will make it known? Doubtful.

    1. Accusing others of ideological rants is itself a form of ideological rant…

      Instead of “flog,” perhaps the present case can be viewed as a sign of the very thing that you seem to want to “inoculate” against.

      Perhaps you should look to your own feelings as to why you seem compelled to post the ideological view that you have…

      Are you concerned that “the maximalists” might actually be correct?

    2. What a strange comment Martin. Clear evidence of the continuing decline of the patent system is before you and your comment is that, gee, some people will use this as clear evidence–the horror.

      Clearly you are not interested in intellectually honest discussions.

      1. …because…

        maximalists

        Witness the propaganda effect wherein those wanting a strong patent system are somehow possessing negative characteristics and emotive buzzwords like “flog” are used.

        Mr. Snyder cannot help himself that his viewpoint is drenched in the implications of “patents are E V 1 L”

        1. Wait a minute. “Flog” is emotionally loaded, but “strong” is a neutral and objective description of a patent system?

            1. I agree that it is strange what gets caught in the filter. I will look forward to reading your reply when eventually the embargo lifts.

    3. I mean yes Martin if people are not being paid for innovations then that will crush innovation. People do what they are paid for – and don’t do what they are not paid for. Small start up companies that don’t have the money to enforce their patents could sell them before to companies like IV and make at least some money off them and IV could enforce them protecting the company that sold them.

      Now who will protect those companies?

      1. Please. Who has actual information on the provenance of the patents IV has enforced?

        Were they really from small startups, or were they junky claims that never should have been granted, but were granted, to larger corporations helmed by experienced patent prosecutors?

        I see no evidence in the decline of the patent system. I see large numbers of newly issued and applied-for patents, I see big patent-users making record profits, and I see a healthy-enough patent bar not exactly going hungry. I see no apparent decline in actual innovation, nor any serious innovations of new physical structures or physically grounded methods not being effectively protected by patents.

        Of course, I do see more junky patents invalidated, but I also see the stirring forces of counter-revolution (i.e. maximalists) seeking to rewrite Section 101, and always, always pushing for more patents to be more easily enforced and more rent-seeking and special pleading for those who own patents.

        Any resistance to the agenda of more patents naturally makes one anti-patent. How could it be otherwise? That includes judges on the highest courts, who clearly hate patents too.

        Now the fun is coming to Europe. The unified patent regime will ensure it.

        1. The lady doth protest too much, methinks.

          (Put away the straw man that people who want strong patent rights somehow also want patents that are improvidently granted)

          1. Uh huh. Maybe when you and your teammates put away the strawman that people who want improvidently granted patents quickly excised, and the unjust conditions leading to those grants cured, and the unjust results of assertions of those claims mitigated are anti-patent.

            1. The arguments that I call anti-patent (and the people that wield the anti-patent arguments) ARE anti-patent and there are NO straw men on my account.

              Further, I have forever and a day criticized p00r examination.

              I know that that is just an inconvenient fact for you, but it remains a fact nonetheless.

        2. Martin, the solution to the problem of “bad” patents is not to make all patents, good or bad, all but unenforceable across the board, but to identify and solve the problem of bad patents in the first place:

          A bad patent is a patent that

          1. Reads on the prior art, including substitutions that were KNOWN, or combinations of old elements that provide no synergy.

          2. Claim results, the so-called “functional at the point of novelty problem.”

          3. Claims ineligible inventions.

          99.9% of the focus of USPTO is today on 1 and 2; but the real damage has always come from 2.

      2. I mean yes Martin if people are not being paid for innovations then that will crush innovation.

        This is phrased like some sort of axiom or self-evident truth, but really this is a highly contingent empirical claim. You need data if you want to say something like this and be taken seriously. I would be interested to see the data necessary to substantiate this.

        Imagine you plotted a graph of new product launches over time, starting in 1980 and running to 2016. IV was founded in 2000. Do you think that there would be any sort of inflection in that time line around 2000? I would be willing to believe it if I saw the data, but if there is no inflection upward, that would be hard evidence that IV’s advent (and probably its demise) is simply irrelevant to the pace of innovation.

        1. Your quest for data would have offended those that took the exact same stance when writing the Constitution.

          Of course, you could try for the contra-positive, and supply even a single example of a modern advanced society that did NOT believe in the promotion of innovation through patents…

          1. I am not following your response. I wonder if you misunderstand my post.

            I am not suggesting that patent systems are not worthwhile. The data to back the worth of patent systems is clear enough to my mind.

            I am suggesting that IV might be not worthwhile. We really cannot know the social utility of IV simply be reasoning from first principles. The assertion that IV is encouraging innovation is an empirical claim, but I am not aware of any data to support that empirical claim.

            Do you have any such data? Does anyone? If not, why should we care whether IV (or its business model) lives or dies?

            1. Gotcha – I did misunderstand your post as to being to particularly IV.

              First principles are usable for the type of things that IV does, but if one wants to drive to the particular entity itself, I can see why you might want empirical data.

        2. A reply here too remains in “moderation”

          What needs moderation is the application of this new “moderation” gag system….

  6. Subtitle: how the Big Corp Propaganda machine works and property values get to that depressed price point for the “exciting opportunity.”

    1. Once again, “flog” is a loaded term, but “propaganda” is calm and objective?

      Incidentally, how do we know that the price point is “depressed”? The term “depressed” implies that some outside force is pressing the price down. Based on the available data, is it not just as plausible to suppose that from ~2005 to today, some outside force was artificially pushing the price up, and that any decline simply reflects a return to the equilibrium that would have prevailed but for the inflationary actions?

      1. Here, the word “propaganda” is definitely “excitable” – it is also highly accurate, and its accuracy overcomes any view that the “excitable” would detract (vis a vis, common application of evidence rules).

      2. Here, the word “propaganda” is definitely “excitable” – it is also highly accurate, and its accuracy overcomes any view that the “excitable” would detract (vis a vis, common application of evidence rules).

        1. ???

          This reads as if it were composed originally in Gaelic, and fed through Google translate before posting it here.

          1. With all due respect, Greg, bite me.

            Common application from evidence of terms that “might” be inflammatory (might “excite”) is a pretty simple and easy to understand concept.

            The bottom line is that “propaganda” fits well enough to use while “flog” does not.

            You did get through law school, did you not?

            1. I gather that you think that you are saying something meaningful, but bless me if I can decipher it. Near as I can tell, this is just a long string of words in the service of special pleading.

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