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The IP marketplace can expect to see more deals in which Intellectual Ventures and other parties work together to purchase patents. So say Loria Yeadon, executive VP of IV’s Invention Investment Fund, and Ken Lustig, the firm’s head of strategic acquisitions. They were speaking to me after the announcement of IV’s hook-up with NVIDIA to purchase what a press release describes as “approximately 500 patents granted and pending in the wireless communications area, including essential concepts in LTE, LTE-Advanced and 3G/4G technologies” from IPWireless.
Although they were not giving much away about the specifics of the transaction, Yeadon confirmed that the portfolio is one that IV has had its eyes on for a while and that both parties had put dollars on the table to buy. Lustig described the purchase as one which took place after the portfolio had been “put up for sale in a competitive situation”. He would not specify whether that meant IV and NVIDIA had been successful in an auction, but did state that once it became clear the portfolio was available the partners moved speedily to secure it. “We both liked what was on offer, our interests aligned and the deal was done very quickly,” he said.
What caught my eye immediately about this purchase is that I do not recall IV ever having gone public with such a transaction before. For whatever reason that is, it is not because this is the first time it has happened. Lustig confirmed that the firm has collaborated with both investors and partners - like NVIDIA - to do similar ones in the past, and that they expect to do more of the same in the future. This type of transaction is becoming more popular, he stated, especially among larger corporate entities. In future, Yeadon stated, doing such deals may even be the way in which IV starts a relationship with a third party.
According to Yeadon, today’s announcement is a demonstration that IV has the ability to access the market for premier assets. “We have our engine revving and can move as fast as the seller and our partner need us to.” This is because, she explained, the firm has done over 1,500 deals in total, not all of are completely custom built from scratch. Instead, IV has done a lot of work to streamline and standardise its transactions in what Yeadon called “a market friendly way”. In other words, while every deal is different, the more you do the less time it takes to put them together. “I have had situations where we have done deals in just a few weeks. We can be very agile. It is a differentiator,” Yeadon said.
Quite why IV and NVIDIA chose to work together no-one is saying. Obviously, it’s cheaper that way, but for NVIDIA it could presumably have been even cheaper still to let IV do all the heavy lifting and then take a licence to what they needed. Perhaps they have more aggressive plans in mind, or maybe it was a case of IV making them an offer they could not refuse: these things are always very murky. What is certain, though, is that IV would not have got involved if it did not see a decent return further down the line. In September 2011, Nathan Myhrvold did an interview with CNN in which he stated that “with respect to cellular, we're in a good position”. Working with NVIDIA to buy the IPWireless portfolio may well mean that today IV is in an even better place, and for less of a spend than would otherwise have been the case.
IP management, Patents, IP business