Exclusive: Intellectual Ventures curbs patent buying amid fund-raising effort

Thu Oct 3, 2013 6:11pm EDT
 
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By Dan Levine

SAN FRANCISCO (Reuters) - Intellectual Ventures, a multi-billion-dollar firm that virtually invented a new market for patents and inventions, has curtailed its patent buying in the past few months, according to sources familiar with its patent market activity, as it seeks to raise new funds.

Created in 2000, Intellectual Ventures to date has raised about $6 billion and acquired 70,000 patents and other intellectual property assets.

The company is currently attempting to raise $3 billion more, according to an investor presentation reviewed by Reuters. Its last major investment fund closed in 2008, and it can no longer use that capital to buy new patents, say three sources with direct knowledge of that fund's terms.

Without a new fund in place, Intellectual Ventures has pushed back the closing dates on some patent deals in recent months and bowed out of others, according to IV purchasing contracts and half a dozen sources involved in patent transactions.

The company's buying slowdown has not damaged the overall patent market because other buyers have picked up the slack, said Robert Aronoff, a patent broker and managing partner of Pluritas in San Francisco. Still, "brokers will welcome them back in," Aronoff said.

Intellectual Ventures declined to comment on any aspect of its fundraising or business operations.

IV's fundraising comes amid a heated debate in Washington over whether current policies make it too easy for patent owners to extract large royalty payments, even in cases where the patented technology may not be central to a given product or service.

Companies like IV, which amass patents but don't manufacture products, have drawn special ire from tech companies and others who believe patent protection has gone too far and is stifling innovation.   Continued...