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Tuesday, August 21, 2018

Sovereign Patent Funds (SPF)

In the year 2000, a new patent aggregation business emerged under the name Intellectual Ventures (“IV”). Armed with more than five billion dollars from global companies such as Microsoft, Intel, Sony, Nokia, Apple, Google, Yahoo, American Express, Adobe, SAP, Nvidia, and eBay, IV aggressively acquired patents. Within its first ten years of existence, the privately-held company occupied the enviable spot of being one of the top five U.S. patent owners. In March 2009, IV expanded its reach globally to Japan, South Korea, Taiwan, China, India, and other countries, hoarding patents in important industries as it opened new offices on foreign soil. Indian innovators happily sold their patents for small amounts reported to be around 5000USD.As of today, IV owns a portfolio of 70,000 patents and collects more than three billion dollars in licensing fees.

Alarmed by the rise of powerful patent aggregators in the United States, governments from other countries have decided to counter with their own initiatives of aggregating patents through the establishment of Sovereign Patent Funds (“SPFs”). In the last few years, Japan, South Korea, China, Taiwan, and France have each launched SPFs. The Japanese government, through the Ministry of Economy, Trade and Industry, established its sovereign patent fund, the Innovation Network Corporation of Japan (“INCJ”), in July 2009. In 2010, the South Korean Ministry of Economics established a sovereign patent fund, Intellectual Discovery (“ID”). In August 2011, Taiwan created its first sovereign patent fund, the Taiwan Medtech Fund.  In 2014, China stoked fear in the patent market by establishing the Ruichuan IPR Funds.
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