More Matchmaking: Aqua Licensing Offers Access to More than 60,000 Patents

In another attempt to create an efficient marketplace for patents, Aqua Licensing is offering access to a substantial portfolio of patents—“more than 60,000.”  The patents are part of the portfolios of AT&T, Rambus, Lenovo and Entegris, among others.  According to the Aqua Licensing website:

Startups submit business plans to the pool as they would to a venture capital investor, at which point the team of patent experts at AQUA identify IP assets that will improve the defensive position of the company and contribute to its long-term growth and value potential. When a match is made, the IP is offered to the startup in exchange for equity, rather than cash, as part of their next-round of financing. This structure enables the startup to secure the Strategic IP Investment from the technology leader prior to pricing the financing round, allowing the benefits of the secured IP and strategic investment to be reflected in the valuation of that round. In many cases this allow for an immediately accretive acquisition of assets.

This sounds similar to one of Google’s recent efforts.  At least one study has shown that supposed patent trolls may target new companies near significant events such as IPOs.  This type of portfolio may provide defensive protection against practicing entities—which is a valid concern, of course.  According to Bloomberg BNA, Aqua’s program is closer to a marketplace because it can result in patent ownership. 

RPX flotation: brilliant investment or bubble waiting to burst?

I had the pleasure of a long discussion with Intellectual Asset Management (IAM) editor Joff Wild over lunch yesterday, in the course of which we discussed the initial public offering of RPX.   I agreed with him that the offer was likely to be well-subscribed, but expressed my doubts as to whether there is a commercial future for a business plan based on defensive patent aggregation -- particularly given the relatively short duration of patent rights and their high degree of vulnerability.  Anyway, as Joff predicted, the IPO was extremely successful.  In his blog today he writes:

"Defensive patent aggregator RPX Corp has stated that its IPO, which took place today, raised approximately $159.6 million, with shares trading at $19 a pop. This is higher than the original $16 to $18 forecast, and must mean the firm is valued close to, or even over, $1 billion. That is an extraordinary valuation for a company that has yet to have its third birthday and which has generated "just" $100 million since its inception. How much leverage does this give the firm's subscribers I wonder? Could RPX afford to allow any of them to walk away by refusing a request for a discount on subscription fees? 

You can follow RPX share price performance here. As of 5.45 pm UK time (12.45 EST), shares were trading at $23.65, up over 20% on the day. As I say, extraordinary. I cannot do the maths, but I wonder whether RPX is now notionally more valuable than Acacia, the NASDAQ-quoted NPE. Its market cap is currently $1.45 billion. That's up from $90 million two and a half years ago. Is it just me, or is anyone else seeing bubbles when they close their eyes?"

I agree wholeheartedly with Joff's comment and wonder what other readers feel. Do let us know.