The article explains how they are able to generate licensing revenues by only purchasing patents that aready being used. Patent holders are getting leverage by partnering with intellectual property (IP) licensing firms.
Among TechSearch's affiliates was physical world connection player Veritec, Inc , a Minnesota-based manufacturer of two-dimensional bar code system now used in coding and tracking electronic gadgets and license plates. Before partnering with TechSearch, says Veritec CEO Van Thuy Tran, Veritec was having problems getting a market footing because of copycat products.
Veritec turned over exclusive licensing rights to TechSearch, and the Niro firm began filing patent suits on its behalf in November 2003. The licensing effort started generating royalties, but Veritec filed for bankruptcy in March 2005. The company was still mired in bankruptcy proceedings when Acacia acquired the rights to its bar code patents. Since then, Veritec has sued three companies and collected more than $700,000 in licensing fees. In 2006 licensing revenue of more than $250,000 represented more than 70 percent of Veritec's total revenue for the year. The company has now emerged from bankruptcy and is debt-free, Tran says.
"We could not have done it without Acacia," Tran says. "We were a small, struggling company, and people were stealing a technology that rightfully belongs to us.
Todd Dagres of Spark Capital offers his take saying the convergence of two kinds of ''IPs" -- Internet protocol and intellectual property -- would create huge financial opportunities.
I think you find more companies use the New American Business Model , or partner with companies that can.
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