A colleague and fellow shutterbug sent me this link to an article about Marathon Patent Group (I’ll call them MPG for short because I am a super lazy typist) and then suddenly, we see this article about one of their holding companies/subsidiaries/lackeys/shell companies filing suit.
My initial thought was, as I tweeted, that it must be getting awfully crowded under that bridge. In my head, I’m picturing a swamp-like environment with a whole bunch of ugly green-faced, hairy-knuckled, short and stubby, tattered-clothes wearing little creatures all milling about and elbowing their way through the crowd, jostling for position and perhaps commencing to odd man from time to time trying to divvy up who’s going to sue who next. Occasionally, out of the corner of your eye, you see one of the little troll wives, hairy hands on her wide hips, going all freak nasty on the men telling them “Would you all please clean up this mess? I am not your maid, you know!”
My second thought was “OMG, they’ve been Spangenberged!” These guys are totally in bed with IP Nav:
Earlier this year, Marathon Patent Group announced that it had entered into a strategic partnership with an industry-leading patent monetization company, IP Navigation Group,
After all, Mr. Croxall has known and done business with IP Navigation Group’s CEO Eric Spangenberg for more than a decade, and their working relationship continues to this day. Finally, the financial relationship between the two companies is also complimentary: Spangenberg and his wife are substantial equity holders in Marathon Patent Group.
Is that wrong? I mean, I don’t know a whole lot about financial relationships and what’s allowed between companies because I took finance in the summer at The University of Texas in Austin and if you know anything about summer school at UT, then you know what I really did was study 6th street and how to prove I was 21 when I wasn’t. (If you’re reading this and were at all financially responsible for my education, then I am totally just kidding.) This sounds a little bit too much like marrying your cousin. Which, while totally legal in some states, is still gross.
This is only my interpretation, but the relationship with IP Nav means that they feed MPG patents that they have successfully litigated and allow them to continue to monetize them.
On April 24, one week prior, Marathon Patent Group announced some clarity on another IP portfolio acquisition from CyberFone Systems. Refreshingly, this portfolio also has a documented track record of revenue generation: $15.5 million from 32 settlement and license agreements over the last 18 months. Like the portfolio acquired on Wednesday, this portfolio has active litigation against 16 defendants, including some very big time names like Federal Express (FDX), Siemens (SI), UPS (UPS), Mitsubishi, Nintendo, and Alcatel Lucent. Marathon Patent Group again purchased an asset that will provide future cash flow when revenue trickles in from these 16 defendants. As before, an investor need only discount the average historical revenue onto the line of future defendants.
It’s risky. You take patents or portfolios that are popular in litigation and purchasing them for their future revenue potential. But what I don’t get is how do they know they’re going to get anything from, in the example above, any of the 16 defendants? Once things go to litigation, you’re involving a lot more people and people? They’re the worst. There’s Markman hearings, judge’s attitudes, the team of lawyers the other side hires, juries…lots of different things come into play. Further, if you purchase patents that have been litigated or used to shake down a bunch of companies before you even buy them, don’t you risk that the portfolio is played out? Everybody goes after the big guys first so if you get it after that, who’s left? And is whoever’s left going generate the kind of revenue you’re looking for?
Patent monetization is all the rage so it’s not surprising that people are jumping on the bandwagon. I’m not sure these MPG guys are really any different from any of the other trolls out there. They, like the rest of their ilk, are in desperate need of a spray down: