The Intellectual Ventures Report (2nd Ed., Version 2.4) builds upon the
information disclosed in previous editions of our report.
Avancept applied
the skills and techniques mastered through more than 30 years
experience in law, business, technology, and journalism to uncover a
tremendous amount of information about IV.
Version 2.4 of our Second
Edition provides four times the information found in our First Edition and
reveals the remarkable growth of IV during just a few short years of
active IP asset acquisition.   We are now pleased to offer a 2,506-page
report detailing our findings.  

A search on “Intellectual Ventures” reveals lots of opinions about the
company but few independent facts.  Most information about IV comes
from the company’s own nuanced disclosures.  This report aims to fill that
void by providing information on the intellectual property assets that the
company appears to own and the parties who supplied these assets.  
Among other things, we describe how IV employed IP arbitrage as a
technique for building one of the world's largest IP portfolios in just a few
short years.

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 was Microsoft’s 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 corporations, individual inventors,
government agencies, and universities worldwide. 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.  The company has also struck licensing arrangements of various
sorts with universities and research labs throughout the developed and
developing worlds.

To finance these IP acquisitions, Intellectual Ventures has raised more
than $5 billion from companies such as Microsoft, Intel, Sony, Nokia,
Apple, Google, and eBay, and various financial investors, according to
published reports and documents disclosed in open court. Intellectual
Venture’s corporate 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 own 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 paper discloses a variant of the post industrial “open
innovation” model advocated by various economists and others.

The Avancept IV Report (Second Ed., Version 2.4)

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 1,276 shell companies associated with IV. From these
shell companies and other IV entities, we have found 954 apparently
relevant IP transactions from 2001-2011. These transactions pertain to
8,093 US patents, and 2,998 US patent applications that appear to be
directly controlled by the company. We have further categorized these
patents and applications according to their technical subject matter.  We
believe that we have also found another 3,100 patents/applications that
appear to be controlled by IV.

We use the transactions found and other information to estimate the
portfolio's overall size to comprise more than 10,000 patent families that
amount to some 30,000-60,000
directly controlled patents/applications
worldwide by the end of 2010, although this number could range even
higher depending on factors such as the company’s international filing
preferences.  
Thus, in just a few years of active acquisition, IV appears to
have acquired a patent portfolio among the top 10 in size for domestic US
companies and quite possibly at the upper end of the top 10.

We have also attempted to describe IV's apparent organization and its
corporate philosophy of "invention capitalism."  We provide some
information about the company's funding and investment mechanisms, as
well as its sales and licensing efforts.  We also discuss the company's
forays into actual technology development with IV Labs and TerraPower.

IV may represent the greatest exemplar of IP arbitrage to date. We note
that approximately half of IV's US portfolio originated with non-US
entities. As an IP arbitrageur, IV seems to have successfully exploited 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 general rule.  The
company has also been successful at obtaining IP from universities and
governments worldwide.

We are generally enthusiastic about IV's reported goal of turning
invention
per se into a sustainable and socially useful business model, and
we believe that the public should be able to study this portfolio as easily
as it can study the portfolios of the world's other great IP portfolios.

We hope that this report will assist in according this remarkable portfolio
its full and appropriate commercial import.
(c) 2010-2011 Avancept LLC, All Rights Reserved
The Intellectual Ventures Report (2nd Ed., Ver. 2.4)
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