Avancept LLC created the Intellectual Ventures Report in 2007, the first
publicly available report of its kind. Prior to Avancept's report, the public
perception of the Intellectual Ventures' portfolio was that it was simply
unknown and unknowable, even though patent ownership is publicly
available information. Avancept applied skills and techniques mastered
through more than 30 years experience in law, business, technology, and
journalism to uncover a tremendous amount of information about
Intellectual Ventures. We are now pleased to offer a 655-page report
detailing our findings.
What is Intellectual Ventures
Intellectual Ventures was founded by Nathan Myhrvold and Edward Jung in
2000, “driven by the belief that invention is the highest-value and most
interesting part of the commercial food chain.” Myhrvold formerly served as
Microsoft’s chief technology officer, and Jung is Microsoft’s former chief
architect. Intellectual Ventures has been organised to invest in innovations
and technologies across a broad spectrum of industries – everything from
computer hardware to biotechnology, and consumer electronics to
nanotechnology. The company has acquired inventions and related IP from a
combination of individual inventors, government agencies, and universities.
In addition, Intellectual Ventures has contracted with numerous inventors to
develop its own IP, much of which is still pending in various patent offices
around the world. Intellectual Ventures now claims to be one of the top 50
patent filers in the US.
To finance these IP acquisitions, Intellectual Ventures has raised more than
$1 billion from companies such as Microsoft, Intel, Sony, Nokia, Apple,
Google, and eBay, according to published reports. Intellectual Venture’s
investors typically receive a royalty-free license to the entire Intellectual
Ventures portfolio in exchange for their investment. According to published
reports, Intellectual Ventures plans to group all acquired patents into
clusters of like technology and then license the patents to potential users or
infringers of each technology cluster. The goal is to derive more value than
would likely be attained from the licensing of any individual patent.
Intellectual Ventures has been at the forefront of efforts promoting
intellectual property as a legitimate business in its right. Myhrvold even
authored a white paper on the benefits of invention entitled “Invention – the
Next Software.” The paper, part of Myhrvold’s testimony before the US
Senate, suggests that a viable and socially beneficial business can be based
upon the commercial exploitation of invention alone. This quite laudable
paper somewhat resembles the post industrial “open innovation” model
advocated by Prof. Henry Chesbrough and others.
The Avancept IV Report
Our report attempts to fill the void in information about Intellectual
Venture's (IV) patent portfolio. IV does not reveal its portfolio publicly,
relying instead upon numerous shell companies to conduct IP transactions.
Using only publicly available information, we believe that we have found
some 362 shell companies associated with IV. From these shell companies
and other IV entities, we have found 247 apparently relevant IP transactions
from 2001-2006. These transactions pertain to 2,069 US patents and 754
US patent applications. We have further categorized these patents and
applications according to their technical subject matter. We also use these
transactions found estimate the portfolio's overall size at 10,000 to 30,000
patents/applications worldwide by the end of 2007, based on IV's apparent
acquisition rate and purchasing preferences. We have also attempted to
describe IV's apparent organization and corporate philosophy.
We note that approximately half of IV's US portfolio originated with non-US
entities. We assume that IV has somewhat assumed the role of IP
arbitrageur, exploiting the relative disparities in IP value between the US and
the rest of the world. We note that much of IV's portfolio originated from
European entities, where IP seems to be particularly undervalued as a
We believe that our methodology will allow us to locate further IV shell
companies and their patents, which we hope to do in future reports.
While we are generally enthusiastic about IV's reported goal of turning
invention per se into a sustainable business model, we nevertheless believe
that the potential licensees of this portfolio should be, able to study this
portfolio as easily as they can study the portfolios of the world's other
major patent licensors.
We hope that this report will assist in according this remarkable portfolio its
full and appropriate commercial import.
(c) 2008 Avancept LLC, All Rights Reserved
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