(Adds details on cuts, background)
By Dan Levine
SAN FRANCISCO Aug 19 Patent buyer Intellectual
Ventures announced its second round of staff cuts this year,
saying it will reduce its global workforce by 19 percent as the
firm increasingly turns to litigation to generate licensing
Intellectual Ventures has raised about $6 billion and
acquired 70,000 patents and other intellectual property assets,
which it licenses to companies in exchange for royalties.
"We are making operational changes that are consistent with
this reduction and will enable us to maintain and expand our
leadership in the market for invention," the company said on
The firm currently lists more than 700 worldwide employees
on its website, which means the latest round of cuts will impact
over 130 positions. The bulk of the cuts will come among
professionals who work to license patents outside the courtroom,
as opposed to its legal department, said sources familiar with
the decision who were not authorized to speak publicly this
In February, Intellectual Ventures announced a five percent
staffing reduction. A multi-billion dollar fund
Intellectual Ventures launched in 2008 generated returns of 2.5
percent for investors through the end of 2012.
For years top executives at the firm, including co-founder
Nathan Myhrvold, described litigation as an inefficient way to
close patent deals.
"It's always been IV's philosophy that signing license
agreements, rather than heading to the courtroom, is the best
way to do business," Intellectual Ventures chief litigation
counsel Melissa Finocchio said in a 2012 blog post.
Created in 2000, Intellectual Ventures did not file any
patent lawsuits until 2010. But since then it has filed 52,
according to Westlaw data.
The company has achieved settlements with some chipmakers
including Hynix. It went to trial against Google's Motorola
Mobility unit earlier this year which ended in a mistrial.
In addition, Intellectual Ventures filed a barrage of
lawsuits against several financial institutions last year,
including Capital One, JPMorgan Chase & Co and Bank of America
Corp. A federal judge in Virginia dismissed an Intellectual
Ventures lawsuit against Capital One earlier this year, a
decision which IV is appealing. Intellectual Ventures' claims
against JPMorgan and BofA are still pending.
Some tech companies like Microsoft are also investors in the
company and receive a share of the royalties. Long-time
investors Apple and Intel declined to
participate in the firm's latest fundraising vehicle earlier
Over the years, Intellectual Ventures has faced criticism
from some in the technology industry who argue that the firm,
which does not primarily make products, exploits the patent
system by demanding royalties from those who do. The firm says
it creates a mechanism for inventors to capitalize on their
(Reporting by Dan Levine; Editing by Leslie Adler)