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Augme Technologies – which holds a number of patents relating to mobile marketing and advertising – last week changed its trade name to Hipcricket, a recognised brand it acquired in 2011. Augme’s rebrand appears to be aimed at increasing investor confidence and reducing negative perceptions of its patent monetisation activities; something that several leading NPEs are seeking to do with a number of different strategies.
It’s worth first taking the opportunity to have a look at Augme/Hipcricket’s activities. It is not clear how much, if any, of its business is currently accounted for by the development and sale of marketing services covered by its patents, as opposed to monetisation of the patents themselves. The company’s website states that:
Augme's platform has provided measurable successes across an industry-leading 250,000+ campaigns for its clients, which include many of America's brand-name leaders (e.g. MillerCoors, Clear Channel) in a variety of industries, along with their agencies. Augme's offerings allow marketers, brands, and agencies to plan, create, test, deploy, and track mobile marketing programs across every mobile channel, including SMS, MMS, 2D/QR codes, mobile websites, advertising networks, social media and branded apps[…] Augme also provides business-to-consumer solutions, including national mobile couponing campaigns, strategic mobile healthcare tools, custom mobile application development, and consumer data tracking and analytics.
What we can say for certain is that Augme/Hipcricket has initiated litigation several times to assert its patent rights. It is also worth noting that Don Stout is a director and board member at the company. Stout is a co-founder of NTP, the NPE which won a $612.5 million settlement payment for patent infringement from Research In Motion (now BlackBerry) in 2006.
In the ‘IP Markets’ column back in issue 58 of IAM, we examined the market valuations and patent holdings of the key publicly traded IP companies (PIPCOs). Augme – considered as a PIPCO in this instance – had one of the smallest IP portfolios of the companies listed, with seven patents at the time of publication. It would appear that this has expanded in the meantime thanks to a number of strategic acquisitions.
According to Patrick Anderson over at the Gametime IP blog, Augme (today’s Hipcricket) started life back in 1999 as Modavox, which developed, patented and marketed internet broadcast technology. In 2009, Modavox bought mobile marketing platform provider Augme Mobile, later adopting the acquisition’s name as its new corporate identity. In 2011, the company acquired QR code start-up Jagtag for $5.5 million and mobile advertising firm Hipcricket for $44.5 million.
Regardless of what proportion of Augme’s income is derived from patent licensing and how much from its operating business, what is important is that each revenue source supports and complements the other. “Companies in emerging industries enhance their ability to compete by incorporating a value-generating IP strategy,” Stout told Gametime IP. “Quality patents, strategically deployed, support young operating businesses and provide investors additional ways to achieve return.”
This goes the other way, too; companies that are focused on patent assertion and licensing would not have successful businesses if their intellectual property had no relevance to the product and service markets. In the most recent issue of IAM we looked at some of the ways in which patent monetisation companies are trying to expand and diversify their businesses. Acacia has made a number of significant strategic acquisitions of patents in a range of different technological areas, including oil and gas production, automotive and healthcare, taking its holdings beyond the telecommunications and computing fields which have until now provided NPEs with their bread and butter. It appears a similar strategy is also being pursued by CopyTele (which notably counts a number of former Acacia executives among its team). Others – including Rambus and Vringo – have looked to make a move into product and prototype development by actually practising on some of the patents they own.
Such strategies are designed to make the NPE business model better equipped for economic uncertainty and to sustain investor interest by opening additional value streams. But another factor that undoubtedly comes into play here is the potential toll of anti-patent sentiment, and the possibility of legislative reforms that could have a fundamental impact on the patent marketplace and the value of patent assets.
By launching own-branded products, Rambus paints itself as more than a patent monetisation entity – even if licensing continues to be its main source of revenue for some time to come. Likewise, Vringo’s toying with the idea of becoming more involved in product development shifts its perception in the eyes of IP sceptics from that of a ‘troll’ that “doesn’t actually produce anything themselves” (to paraphrase Barack Obama) to that of an ‘innovator’ making an easily comprehensible contribution to the economy. Perhaps by changing its name to Hipcricket – a brand which already enjoys consumer recognition and a decent reputation in its marketplace – Augme can deflect any potential controversy or negative attention that its patent monetisation activities might attract.
Licensing, IP politics, Brands, IP litigation, IA management, Patents, IP business, IP finance