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Acacia Research seeks to profit from patents

Acacia Research, which critics call a 'patent troll' that files frivolous lawsuits, says it focuses on helping inventors get a proper share of the profits from the technologies they have developed.

April 06, 2014|By Ronald D. White, Los Angeles Times

Matthew Vella certainly doesn't look like a troll.

Vella is the regular-guy chief executive of Acacia Research Corp., which calls itself a patent outsource licensing company. The Newport Beach firm links up with inventors who fear that others are elbowing in on their patents or whose patents aren't making the money they could.

"Our clients often can't afford to hire specialists that will help turn those patents into money," Vella said. "They are not looking to sell them necessarily, but if they are looking to get money because people are infringing their patents, we want to be their partner."

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But critics say Acacia Research and companies like it are "patent trolls" that exist to file frivolous lawsuits and exploit the work of others, thereby standing in the way of innovation.

Vella said Acacia Research doesn't work like that. The company, he said, makes sure clients get a proper share of the profits from the technologies they have developed.

"If you are a company that has patents on coronary stents, you don't really need our protection," Vella said, referring to one of Acacia Research's long list of partners, who split patent revenue with the firm. "What you need is a license fee in exchange for allowing others to use your patents. That is all we are trying to get."

Vella said that 95% of the company's business involves working with the patent holders as partners.

"Essentially the deal is you hand over your patents," Vella recently told a group of investors, according to a transcript of the talk.

"If we like them and if you like working with us, we work on monetizing them, often through patent litigation if necessary," Vella said, later adding, "when the profit stream comes back out, we do a split, usually 50/50, sometimes we adjust the splits either way. So, that's the basic idea."

One of the company's best-known examples involved the Japanese firm Access Co., which had acquired PalmSource, the software spinoff of Palm Computing Inc. Through PalmSource and some of its own research and development, Access had a portfolio of more than 200 patents, primarily for mobile device software and technology.

But it wasn't until Access partnered with Acacia Research in 2010 to develop a comprehensive licensing program than Access began to receive revenue from companies including Microsoft, Apple and Samsung.

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