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IV Insights Blog

Why IV Takes a Global Stance on Innovation

As many in the technology and economics sectors have noted, innovation in Asia is on a major upswing. The first time I heard the phrase “The Asian Century” was in 1992 at AT&T Bell Laboratories. At the time, American companies were making plans to address long-term opportunities in Asia. They felt that Asia would have the largest and fastest-growing markets, and thus the 21st century would be “The Asian Century.”

Now, in early 2011, the news is full of reports on patent filings from inventors in Asian countries and it’s clear that The Asian Century has arrived, though perhaps the phrase “Global Century” would be more accurate. There’s a fascinating discussion going on now about global innovation. Scott Anthony, managing director of Innosight Ventures, has written a few blog posts for the Harvard Business Review about his personal experiences with innovation in Asia after moving to Singapore.  He brings up excellent points and I agree with his observations and recommendations.

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New Pathways to Commercialization for University Inventions

IV is based just outside of Seattle, Washington and has a lot of experience working with American companies, universities, and inventors. But something that is perhaps less known about IV is that we are also an international company. We have a network of offices and fantastic staff working with inventors, universities, and inventive companies in nine countries around the world.  Most recently, the University of British Columbia (UBC) in Vancouver, Canada entered into an agreement with us to work together on the development and commercialization of new inventions.

We are excited that a renowned university such as UBC has joined our invention development program. One of the things we will do with UBC will be to provide them access to special documents we make called Requests For Invention that identify important problems we think need more solutions. The university gets a new view into the marketplace through the suggestions we provide them as well as access to additional pathways for commercialization of university inventions. Working with IV simply offers another resource that supplements all the great work that the university technology transfer office already does. Providing university inventors with additional access to a marketplace for their ideas and inventions can be both a new source of revenue and can improve the chances that we all benefit from the top-notch thinking going on at the world’s best universities. You can read more about IV’s goal of creating an industry dedicated to financing inventors and monetizing their creations in an article authored by Intellectual Ventures CEO, Nathan Myhrvold, in Harvard Business Review.

We can’t wait to see the inventions that UBC comes up with and start sharing them with the world.

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Working with Inventors

At IV we work with inventors and inventive companies in a variety of ways, including buying IP assets from them. Many times we buy valuable assets when a company believes that a reputable and experienced IP company like IV will be best suited to monetize them. The cash infusion from selling us those assets allows those companies to continue developing and marketing their core products.

FSMLabs is one such company who recently sold us some of its virtualization, security and fault tolerance patents. FSMLabs, which provides its customers with real-time and timekeeping technology, sold us part of their patent portfolio because it allows them to apply the capital toward continuing to execute on their business and do further research. 

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IV Welcomes David Kris as General Counsel

We have new talent joining the ranks. IV President and COO Adriane Brown told us earlier today that David Kris, Assistant Attorney General for National Security, will be joining the IV team as General Counsel. Here’s an excerpt from Adriane’s email to the company:

David brings nearly twenty years of legal experience both in government roles and in the private sector. He has expertise in assessing legal risk while also taking into account operational efficiency.  In between positions at the US Department of Justice, David served as Deputy General Counsel and Chief Compliance Officer for Time Warner where he developed an enterprise-wide ethics and compliance program for offices in more than 50 countries and provided counsel to executives regarding corporate legal risk and compliance.

With David’s experience, intellect and engaging personality, I’m certain he will effectively step into the role of General Counsel and lead our well-established legal department. David is well known for his ability to assess a situation from all angles and make decisions that bridge the gap between theory and practice. He is a strong leader, a bright lawyer and a great addition to the company.

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IV Signs New Licensing Customer

It’s a busy week for technology with CES in full swing in Las Vegas! Here at IV, we just announced another license agreement with a top tech company, SAP. 2011 is shaping up to be a busy year for IV, and we’ll continue to share our news with you as it happens. Check out the Press Releases page if you’re interested in learning more about some of our other recent deals with top tech companies including HTC, Samsung and Digimarc.

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Monetizing Patent Portfolios

A few weeks ago Edward Jung, IV’s founder and CTO, blogged about creating an invention ecosystem. IV contributes to that ecosystem in a variety of ways. One of the less known ways is to benefit companies by using financial instruments to allow them to monetize their patent portfolios. This allows those companies to provide value to their shareholders while funding future innovation. We have a team here at IV who does exactly this.

Recently the head of that division, Vincent Pluvinage, described two circumstances where capital was used to leverage the value of patents. Here Vincent answers the question, Who benefited from these deals?

First example. A couple of years ago, we led the purchase of more than a thousand patents that Motorola had filed during the development of the first generation of Iridium Satellites. The original venture went bankrupt after billions invested in this ambitious project, and was purchased for a mere $25M by private equity investors that slowly built up a profitable business. When the “new” Iridium had to select a supplier to build the NEXT generation of satellites, IV sold most of the patents (and a license to other satellite patents) to a French Financial Institution. Thales, a French satellite constructor, was able to help Iridium secure the debt financing in part because of the patents. Here is the value chain: Motorola got to sell an aging and expensive to maintain patent portfolio for immediate cash two years ago. Thales won a $2.9B contract. Iridium secured $1.8B of debt financing. IV investors made a profit on the patent transactions. The initial inventions were recycled and blended with new innovations from a French engineering team, in order to create a better performing constellation to satisfy new needs.

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Creating an Invention Ecosystem

Creating a market for intellectual property (IP) was one of our clear goals in founding Intellectual Ventures. We saw an opportunity to develop a system of buyers and sellers setting value for intellectual assets through open competitive markets where none had existed before. In just a few years this market, and IV, have grown faster than we’d ever imagined they would.

But in addition to buyers and sellers, an IP market needs to be fed by a continual stream of innovative ideas. That’s why, from the outset, IV has also focused on creating an ecosystem of invention: a stable and dynamic community of participants interacting with one another and their environment to produce useful and valuable inventions.

A business strategist named James F. Moore first applied the biological term “ecosystem” to business in 1993, in an article he wrote for the Harvard Business Review. Moore also described a special type of ecosystem relevant to our purposes: a keystone ecosystem, in which one very large player has a key stabilizing and defining role in the ecosystem itself and in the growth of other ”organisms.” The ecosystem model emphasizes the interdependence of its members. The health of each participant depends on the health of the other members, and in particular the health of the keystone. Likewise the keystone player gets critical support from the goods and services provided by its partners, producers, and suppliers.

At IV, we want to encourage a stable and dynamic ecosystem of invention. If you’re interested in learning more about the ecosystem business model, I recommend a book co-authored by one of IV’s inventors and program managers, Roy Levien: The Keystone Advantage: What the New Dynamics of Business Ecosystems Mean for Strategy, Innovation, and Sustainability.

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A look inside the partnership between University of New South Wales and Intellectual Ventures

Just this past spring, IV partnered with New South Innovations (NSi), the group responsible for commercializing research and technologies at the University of New South Wales in Sydney, Australia. IV and NSi’s agreement provides financial incentives to UNSW researchers for submitting new invention ideas. We are excited about this partnership – and so is the team at NSi.

Don’t just take our word for it. To introduce the partnership with IV, NSi has produced a new video, which they released this week, featuring IV’s very own Dr. Patrick Ennis, Global Head of Technology. We are looking forward to working with such a cutting-edge organization as NSi, as well as the many talented inventors at UNSW.

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Getting to know IV

Today we are launching IV Insights, the Intellectual Ventures corporate blog.  IV Insights will give you information about what is happening at IV as well as our insights on industry news and events.

For our first post, we wanted to start with the question we get most – What does IV do anyway?

Our CEO, Nathan Myhrvold, wrote an in-depth article earlier this year on just this topic for Harvard Business Review. If you really want to understand IV’s vision and business model, this is the best resource.

If you just want the summary: IV’s goal is to lead the way in building an invention capital market.  This is an ambitious vision with a long timescale, but we are a committed bunch of people!

Our business model has many moving parts but basically, we treat invention as an asset.  We want to make investing in this asset class a profitable activity.  Bottom line is: ideas are valuable.  It’s important that inventors get paid for their inventions and that corporate innovators who understand the competitive value of a strong IP portfolio have an efficient way to find the inventions they need to operate freely and competitively. 

To get to our goal, we fund and support inventors to come up with new ideas and we invest in existing inventions.  We then work to package inventions and get them into the market through a variety of business development and licensing efforts.  We also have a group of projects we do around what we call global good efforts -- these are projects focused on finding solutions for some of the world’s hard problems in energy, climate and global health – particularly malaria.

Face it: inventors make people a bit nostalgic. We all have our favorite inventor story. Yet the world has taken the importance of invention for granted. By making invention a for-profit activity, we believe we will incentivize more people to take necessary risks on coming up with radical new solutions and ultimately the world will benefit. 

This sums up our first official blog post. We hope to update the blog weekly, but please bear with us as we get into the groove of regular posts. You can also sign up for the blog’s RSS feed and follow IV on Twitter @IVinvents.

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