The buzz surrounding the IP marketplace today typically revolves around litigation issues. When the IP rights of Research in Motion were called into question by patent warehousing company NTP, three million businessmen and women lived in fear that their Blackberry service would be brought to an abrupt halt. As it turned out the Canadian based tech firm reached a $612 million settlement with NTP, putting to rest any such fears.
While the Blackberry case has been among the most notable patent squabbles in recent months, it is by no means an isolated situation. Hewlett Packard recently sued G&G Ninestar Image Co. of China, claiming that the ink cartridge manufacturer had infringed on its patents; Blockbuster Video is currently being targeted by Netflix, which says the video giant is violating its patents; Symantec is suing Microsoft, saying it infringed on certain data storage technology; and Apple Computer has agreed to pay Creative Technology a $100 million licensing fee that will end a patent suit that involved Apple’s iPod.
And these are just the cases making headlines in the last week of August.
While the legal tussles might make the industry appear somewhat unhinged, James Malackowski counters that the suits actually represent the IP space’s growing stability.
“The enforcement process is a lot better today than it was twenty years ago. Because of that you have a lot more value associated with IP,” he says. And with more value being ascribed to the space, the natural consequence is more head-butting among groups trying to profit on that value.
A lot of criticism has been heaped on the so called patent trolls—firms such as NTP that accumulate patents simply to litigate licensing fees or settlements out of companies in violation of existing patents. Ocean Tomo refers to these entities as patent licensing and enforcement companies, or P-LECs, and while the firm doesn’t participate in this kind of investment strategy itself, it does view their presence as necessary to the IP industry’s development.
Keith Cardoza, who declined to pick a side in the Blackberry case, did tell Buyouts, “The people who own the patents should be viewed in the marketplace as the legitimate owner of the [corresponding] technology.”
Eventually, Ocean Tomo anticipates that the battles for IP rights will shift from the legal domain to the financial domain. And from there, the firm expects the IP marketplace to blossom into its own asset class. “Whether you like it or not, it’s here to stay,” Malackowski says.