Blog Post

Intellectual Ventures Strikes Patent-Licensing Deal With Micron

Patent-holding giant Intellectual Ventures has struck a deal with Micron Technology, one of the largest makers of memory chips for computers and smartphones. Micron-a company that has had a conflicted stance on patents in the past few years-is the latest company to pay up for patent rights to IV’s more than 30,000 patents.

As recently as 2009, Micron CEO Steve Appleton was complaining-vocally-to Congress about the problems that non-practicing patent holders (a.k.a. “patent trolls”) were creating for Micron, adding $30 million in annual litigation costs and killing U.S. jobs. Many patent-licensing shops are “predators [that] essentially invent patents rather than patent inventions, effectively holding innovative manufacturing companies hostage with lawsuits,” the company stated on its corporate blog a few days before Appleton spoke to Congress. “This creates a significant off-shoring incentive for U.S. manufacturing companies.”

Micron apparently had a major change of heart the following year. The company sold off 4,200 patents to John Desmarais, a well-known patent litigator who left his big-firm job to get into the enforcement side of the patent business. Desmarais created a company called Round Rock Research and is enforcing Micron’s patent portfolio; he’s sued HTC with Micron patents, and more recently, auctioned off a “covenant not to sue” with certain Micron patents for $35 million.

Micron’s deal with Desmarais isn’t connected to the just-announced deal with Intellectual Ventures. (But the patent world is small-Desmarais’s new law firm is litigating patents that were once held by IV.)

Financial details of the IV-Micron licensing transaction aren’t being released. Whatever Micron is paying for access to IV’s patents, it isn’t enough that the company felt the need to disclose it to the SEC. The size of some tech comanies’ payouts to IV-like Verizon ($350 million) and Intuit ($120 million) became public when those companies reported them in their SEC filings. A Micron spokesman declined to comment on the deal beyond what was already in the IV press release.

The two companies also intend to share patents with each other, which means that Micron may sometimes acquire a few patents from IV to use as counter-attacks when it gets sued by “patent trolls” or competitors. Some companies who are IV licensees have used the holding company’s patents to file defensive counter-suits; Verizon is one example. The press release also suggests that IV may acquire patents from Micron which could bolster its own portfolio, thus helping with future licensing efforts.