Intellectual Ventures insists on high royalties for patent licenses from Symantec, Trend Micro

By Rizza Sta. Ana

Oct 29, 2013 10:34 AM EDT

In a Delaware courtroom, buyout firm Intellectual Ventures (IV) argued that security firms Symantec and Trend Micro should be paying the former royalties in the amount of USD310 million. IV said the fees consisted of licenses to its malicious software detetion technology. The enormity of the fees was deemed fair compensation by IV considering that Symantec and Trend Micro had been using the technology extensively.

The argument had led Symantec and Trend Micro to challenge the business model of IV and other patent acquisition firms. Both companies argued back in the same court that large licensing fees should not be implemented especially if patents were acquired at a minimal cost. IV acquired the malicious software technology seven years ago for USD750,000. Lawyers of the two tech companies said a patent license is considerably less valuable compared to a patent ownership.

U.S. District Judge Leonard Stark of Delaware seemed to have acknowledged Symantec and Trend Micro's argument.

"Who would possibly pay hundreds of millions of dollars for something that we know a willing seller would sell for hundreds of thousands of dollars?" Stark asked in court.

Patent damages expert Thomas Cotter at the University of Minnesota Law School addressed IV's case. "They're a type of intermediary or broker, providing a service, and the spread between the price they buy and the price they sell is their compensation for that service. Plus, there's always some risk they won't get anything."

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