Thu, Mar 21, 2013 - Page 15 News List

Countries enter patent-buying business

STATE-SPONSORED TROLLS?While opinion is divided over the role played by patent aggregators, the arrival of state-backed firms show it is an increasingly important field

Reuters, SAN FRANCISCO and SEOUL

Patent reform advocates say patent aggregators have exploited loopholes in the system and are often little more than quick-settlement artists who threaten lawsuits with flimsy patent claims registered years after a product hits the market.

However, big players such as Intellectual Ventures, launched by former Microsoft Corp chief technology officer Nathan Myhrvold, say they prevent upstart companies and independent inventors from being ripped off and create a much-needed market for innovation.

Several tech companies, including Microsoft and Google, as well as universities and foundations, are investors in Intellectual Ventures, according to court filings.

Stanford Law School professor Mark Lemley said the emergence of state-sponsored companies could drive more support for the bill, now in committee. Legislators may view them as foreign governments sucking away the fruits of US research, Lemley said, regardless of whether that is a realistic threat.

So far, the government-backed aggregators do not have nearly the same scale as Intellectual Ventures, which says it has over US$5 billion in committed capital and owns roughly 70,000 intellectual property assets.

France Brevets was launched in 2011 with 100 million euros (US$128.7 million), half from the state and half from the Caisse des Depots, a publicly managed investor in French economic development.

Korea’s Intellectual Discovery, which was started in 2010 amid government fears that domestic companies were losing key patents that could be used against them by foreign companies, has a US$140 million government commitment.

Meanwhile, the Innovation Network Corp of Japan, a joint public-private investment company, launched a fund in 2010 to acquire and license life-sciences patents. Officials there were unavailable for comment.

China has plans to set up about 20 IP “investment service platforms,” as well as exploring a joint government-industry-university patent funding model and extending pilot programs for patent insurance, according to a strategy plan for this year from the state intellectual property office.

Taiwan’s national research lab set up an “IP service company” but it is not government funded, said Sean Wang, a representative for the lab in the US in an e-mail to reporters. He did not respond to follow-up questions.

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