UPDATE 2-Big patent owner Intellectual Ventures cuts staff 5 pct

Thu Feb 13, 2014 6:13pm EST

By Dan Levine

Feb 13 (Reuters) - Privately held patent owner Intellectual Ventures said on Thursday it has cut about 5 percent of its global workforce and "consolidated positions" in a corporate restructuring.

Since its founding in 2000, IV has raised more than $6 billion from investors and has bought tens of thousands of intellectual property assets from a variety of sources. IV then strikes licensing deals or sues companies in the hopes of securing royalties.

However, investment returns from IV's different funds have been mixed. The multi-billion dollar fund IV launched in 2008 generated returns of 2.5 percent for investors through the end of 2012, Reuters reported last October.

"This restructure is a combination of head count and operational improvements," spokeswoman Katherine Clouse said in a statement on Thursday. "We have eliminated approximately five percent of our global workforce and consolidated other positions elsewhere in the company."

IV has over 800 employees, according to its website, so a five percent reduction would impact at least 40 people. The bulk of the staff cuts involved attorneys and engineers who worked for IV's large patent acquisition funds, three sources familiar with the company said.

IV also runs a laboratory which pursues inventions that the company itself can patent. That part of the business was not impacted by the job cuts, the sources said. Clouse declined to provide additional detail about the reductions.

Large IV investors have included Apple and Microsoft, where IV founder Nathan Myhrvold was once chief technology officer under Bill Gates.

IV's acquisition and licensing funds have faced criticism from some in the technology industry, who argue that patent litigation and royalty payments have become a burdensome tax on innovation. They say firms like IV, which do not primarily make products, are exploiting the patent system.

But IV argues that unlike some of the firms denounced as "patent trolls," it invests only in quality intellectual property and does not file frivolous lawsuits. IV also says it helps inventors get paid for their innovations while helping tech companies protect and manage their intellectual property.

Last month, IV embarked on the first trial in its history in a Delaware federal court, against Google's Motorola Mobility unit. IV claimed Motorola violated three of its patents, but a jury could not unanimously agree and U.S. District Judge Sue Robinson declared a mistrial.

Google was an investor in IV's first patent acquisition fund, but did not participate in later vehicles.

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