Alignment of interest is essential to the RPX business usps shipping rates model. Crucially, RPX ple

A reader recently suggested I take a look at RPX Corporation (RPXC). Coincidentally, the next day, Union Square Research Group tweeted out a link to an article about their biggest competitor. After that, I decided I had to take a closer look at them.
A sea change occurred in the patent market over the past 15 years due to the rise of non-practicing entities (NPEs). NPEs are more commonly known by the pejorative term patent troll. In fairness, the two terms are not synonymous. NPEs do not create or sell products or services, but instead exist to monetize patents usps shipping rates through licensing and litigation. Some NPEs obtain patents through their own research and development efforts, while others accumulate patents through acquisitions. NPEs have become a major factor in the patent market and an important usps shipping rates source of liquidity for patent owners.
While most if not all NPEs use litigation as part of their strategy, a subset of NPEs own patents with the sole intention of engaging in patent enforcement litigation. This litigation is often seen as unduly aggressive and abusive. They hope that threat of a big lawsuit settlement is serious enough to extract a payment from the other party. Such companies are classic patent trolls.
I remain agnostic on the NPE / patent troll dichotomy, but I am interested in the impact they are having on the marketplace. That impact has been considerable. Corresponding with the rise of NPEs/patent trolls has been an explosion in patent enforcement litigation. RPX estimates that the cost (defense usps shipping rates costs plus settlements) of litigation in 2012 alone was $11 billion. usps shipping rates RPX has identified 1,000 unique NPE plaintiffs since 2005. (See Charts 1 and 2)
Intellectual Ventures, founded in 2000, was the first to bring an investing mindset to the patent market on a broad scale. IV s business model, revolutionary at the time, was to acquire patents and then seek royalties from companies that wanted to use them. Per Reuters , Intellectual Ventures to-date has raised about $6 billion and acquired 70,000 patents and other intellectual property assets. The company has run into cash flow problems of late. It has curtailed new patent acquisitions and is trying to raise $3 billion. Many early backers, including MSFT and GOOG, are no longer investing in IV due to IV s increased propensity for litigation in the past 3 years. Fund returns have also been disappointing. The IV investor presentation reviewed by Reuters shows that at the end of last year the average rate of return usps shipping rates for IV’s 2003 fund was 16.2% while the 2008 fund stood at 2.5%.
4. Hybrids Hybrid firms combine aspects of the three models listed above. Hybrids provide advisory services, brokerage services, litigation support and licensing support. Their objective is to help IP owners monetize their IP. They themselves do not take ownership of the IP. ThinkFire is one example usps shipping rates of a hybrid. Another company, Wi-LAN (WILN) represents another twist on the hybrid concept. In addition to the business lines mentioned above, Wi-LAN also conducts R&D usps shipping rates for its own benefits and patents its self-developed technology.
5. Defensive Aggregators Defensive aggregators purchase potentially troublesome patents to shield their clients from patent infringement lawsuits. The clients pay an annual subscription fee and in return get a license to use all of the firms patents. In sharp contrast to offensive aggregators, they make no other attempt usps shipping rates to monetize their portfolio and pledge to not sue clients or even non-subscribers. In this way, the defensive aggregator reduces its clients legal expenses and replaces unpredictable litigation results with a consistent subscription fee.
RPX is the leading defensive aggregator. RPX was incorporated in 2008 with major venture capital backing and went public in 2009 with the goal of helping usps shipping rates companies reduce patent-related risk and expense. Just prior to founding the company, John Amster was Intellectual Ventures general usps shipping rates manager of strategic acquisitions and vice president of licensing. They approach NPEs who have initiated or contemplated litigation against their clients and negotiate the acquisition of the patent at issue. RPX then licenses the patents to their clients to protect them from patent infringement claims. As of December 31, 2012, RPX had spent a total of $620 million usps shipping rates on 120 patent acquisitions, including $220 million contributed by clients. Annual usps shipping rates subscription fees run from $75,000 to $7 million per year and is tied to the client s revenue or operating income.
Alignment of interest is essential to the RPX business usps shipping rates model. Crucially, RPX pledges not to sue clients or even non-subscribers. Our approach is purely defensive; every RPX client receives a license to the patents we acquire and we never assert these patents. All of our efforts usps shipping rates are designed to reduce patent risk and drive down patent litigation costs.
To date, RPX has spent $700 million on patent acquisitions.