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THE $5-billion US fund Intellectual Ventures (IV) is setting up base in India and has entered into agreement to buy patents from the Indian Institute of Science, Bangalore and plans to tie up with IIT Madras and other such institutes. The company owns over 20,000 patents worldwide related to everything from lasers to computer chips and is now eyeing the 15,000 patents filed every year by various research institutes in India. The fund, founded by Microsoft’s former chief technology officer Nathan P Myhrvold (also the CEO), has roped in Prof Ashok Misra, who quit as director IIT Mumbai to join IV India as chairman.

The fund is controversial in the US as it’s seen as monopolising inventions and using its clout to sign expensive patent-licensing agreements. Says Myhrvold,”there’s controversy around our company as it is a new business model. We will do the patent filing on behalf of institutes, buy or licence patents and take inventions to the market.’’ The $5 billion has been raised from pension funds, individual investors and large companies including Microsoft, Cisco, Intel, Verizon Communications, Sony, Apple. The fund seeks to invest in inventions by buying patents from inventors, universities, institutions and R&D labs engaged in research in high-tech areas. These include semiconductors, aspects of computing, networking, medical devices, chemical engineering and others. Intellectual Ventures claims to be the eighth largest patent owner in the world and has generated $1 billion revenue by marketing the patents. “We either own patents or have exclusive rights to sub-licence them. Across Asia we will be spending about $100 million to buy or licence patents, though the exact amount will depend on the flow of ideas. We believe that over the next 10-20 years institutes in India could make around $1 billion a year if they can market their inventions,’’ says Myhrvold.

Around the world companies like IBM, Intel, HP, NEC, Microsoft, Texas Instruments, Qualcomm are the large patent holders. However, unlike government funded labs and institutes the large companies tend to do market oriented research and have their resources to licence or market their inventions. IBM alone makes about $1 billion a year by licensing its patents. Across Asia, universities make just about $30-40 million by licensing patents and this is where Intellectual Ventures sees its role as being able get better RoI on patents.

In India, Intellectual Ventures has set up base in Bangalore with a 10 people staff. The India operations are headed by Monish Suvarna, GM, Intellectual Ventures. Across Asia the company has started operations in Singapore, Seoul, Tokyo and Beijing as well. Worldwide, Intellectual Ventures has a 500 people team comprising scientific analysts, patent attorneys and business development managers. Gurgaon-based Knowledge Process Outsourcing (KPO) firm Evalueserve’s country head & COO Ashish Gupta says, ``quite a few KPOs do patent filing. Now third party licencing and marketing inventions are beginning to happen. There will be more firms getting into the new areas as margins are attractive.’’ If third party patent marketing works well, it could provide research labs a new avenue to garner returns from intellectual property.

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