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 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 corporations, 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 $5 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 (First Edition)

Our Report (First Edition) 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 the transactions found to 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 general rule.

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.  We are generally enthusiastic about IV’s reported goal of turning invention per se into a sustainable business model, and we believe that information about this portfolio should be as easily obtainable as information about the world’s other major IP portfolios.

We hope that this report will assist in according this remarkable portfolio its full and appropriate commercial import.