At the beginning of this year, Intellectual Discovery (ID) appiinted a new CEO; and the first 12 months of Jung Dong-soo’s leadership have given some clues as to the sovereign patent fund’s future direction. IP transactions and business deals during 2017 suggest a leaner organisation is emerging, but one that may still be poised to earn revenue from its significant portfolio of assets.

A USPTO assignment recorded two weeks ago reveals the fund’s latest apparent patent sale. ID transferred a portfolio of patents related to audio coding and processing to a US entity called Unified Sound Systems Inc. The package includes 30 assets in all, counting eight US and three Chinese grants. Unified Sound is a recent creation with no patent history or associated names – its listed address is a residence in San Leandro, California. ID acquired the patents in 2015 from the tech transfer arm of Seoul’s Yonsei University.

The patent sale occurred around the same time that ID sold a patent portfolio covering camera lenses to Compact Lens Technologies LLC, which appears to be a subsidiary of Texas-based IP business IP Valuation Partners. It is not known whether the two October sales were cash only or privateering plays; but the latter is definitely part of the ID playbook, as exemplified by its monetisation agreement with DSS. That was the last deal done on former CEO Kwang-jun Kim’s watch; if these more recent transactions are structured similarly, it is a solid indication that ID doesn’t plan on litigating on its own behalf anytime soon.

Patents are not all ID is selling. As we reported last month, the fund is currently weighing bids for its VC arm ID Ventures, and had hoped to close a deal worth up to $10 million by the end of this year.

On the day he departed the fund in 2016, then-CEO Kim told IAM that ID’s budget had been repeatedly slashed by its Korean government backers, and that it faced a much smaller role under the stewardship of the Korean Intellectual Property Office. At the time, he said the core ID team was down to 15, whereas at ID’s peak it supposedly had up to 40 employees.

Despite several requests from IAM, ID has steadfastly declined to address questions about its budget situation and future strategy since the changes to its executive team. But a pattern of patent sales and privateering and pool deals – along with selling off a reportedly profitable subsidiary – would not be out of character for an organisation trying to do more with less.

Then again, ID’s current direction does not seem all that different from that of Intellectual Ventures. IV has stopped buying patents, and gone into selling mode. Many of the portfolios it has divested have been snapped up by NPEs and then litigated. As executives from IV have explained, licensing conditions are tough but there is demand for whole portfolios purchases. Moreover, operating companies may become more receptive to buying assets if they can see many of them are being sold off to NPEs who may later target them.

Whatever budget pressures ID does or doesn’t face, the sale of ID Ventures indicates that it may be narrowing its focus somewhat. A lean, transactions-based team relying on third parties like NPEs and patent pools for monetisation may not be a bad approach in the current patent environment. We will see in 2018 whether ID’s sales programme is able to move more assets in a very crowded marketplace.

Known 2017 patent transactions by Intellectual Discovery

Date

Assignee

Number of US patents

Notes

18 Oct

Unified Sound Systems, Inc

8

Patents related to sound coding and processing.

11 Oct

Compact Lens Technologies LLC

15

Linked with US-based IP advisory IP Valuation Partners

16 Aug

Golden Valley Holdings

6

Possible acquisition vehicle for Oppo

13 Mar

Ariscale Inc

1

Wireless-related patent originally assigned to IT business of steel giant POSCO