Bloomberg News 11-21-2012 Cisco Joins Get-Them-First Wave of Suits Against Patent Owners By Susan Decker Nov.

21 (Bloomberg) -- The new mantra among some large companies about U.S. patent lawsuits is: Get them before they get you. Its part of a push by the technology and financial industries against patent owners that dont make products, called non-practicing entities or NPEs. A particular source of ire is patent owners that sue a large number of companies and seek settlements less than the legal costs of fighting. Our view is that the nature of the cases has become even more abusive than it was before, said Cisco Systems Inc. General Counsel Mark Chandler. Given whats happened in the courts, the opportunity is now there for those who were victims by these schemes to fight back. In October alone, eight pre-emptive lawsuits were filed by companies like Discover Financial Services and Adobe Systems Inc. whose competitors or customers were sued for patent- infringement. Cisco and Motorola Solutions Inc. lodged racketeering claims, more closely associated with mob cases, against a company demanding cash from their customers who use wireless networks. That attitude probably will grow following two verdicts on Nov. 6: a $368.2 million award won by VirnetX Holding Corp. against Apple Inc. and $30 million won by Vringo Inc. against Google Inc. and some of its customers. Two Awards

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A rash of patent sales last year -- prompted by smartphone makers like Apple Inc. and Samsung Electronics Co. looking for new ammunition to use against each other -- led to an unprecedented transfer of patent ownership. In some cases, the buyers were firms like Vringo, which obtained patents from Nokia Ojy and used them to sue Chinese handset maker ZTE Corp. I own the invention, and just because I dont use it doesnt give you the right to trample on my property, said Vringo Chief Executive Officer Andrew Perlman. A lot of big tech companies say we hate NPEs, we hate NPEs, but they are very happy to assert patents that dont cover their products. Anybody thats at the receiving end of a lawsuit is never happy about it. The tech companies dont complain so much when its one of their own filing suit, said Paul Ryan, CEO of patent-licensing company Acacia Research Corp. No one is looking at the actual merits of the patents in the cases, Ryan said. Its all spin and hyperbole over whos bringing the litigation. Investors have tripled Vringo stock since the beginning of the year, ooking for payouts similar to the $612.5 million Research In Motion Ltd., maker of the BlackBerry, laid out in 2006 to NTP Inc. after years of litigation. The original verdict in 2002 was $23.1 million. Verdicts like VirnetXs are rare and have to withstand post-trial arguments to judges and an appeals court. The last large verdict against Apple, for $625.5 million, was tossed out. 38 Percent The median jury award in NPE cases against telecommunications companies between 1995 and 2011 was just over $30 million, according to a September report by PricewaterhouseCoopers LLP. NPEs dont succeed as often as competitors who sue each other. About a quarter of NPE suits were won by the patent owner, compared with a 38 percent success rate for companies that asserted patents they used, PricewaterhouseCoopers said.

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Still, the prevalence of litigation, which can cost millions of dollars each in legal fees, has spurred technology and financial companies to act. Theyve persuaded courts to make it more difficult to use a patents power to block products as a cudgel to force settlements, decreased the ability to collect large royalties on minor components. Cash Machines I dont think you can say as a class NPEs are necessarily bad, but there are people and entities who try to game the system, said Blaney Harper, a lawyer with Jones Day in Washington. Its proliferated so much, companies dont want to be seen as cash machines. At some level you have to say, Ive paid too much; its time to stop this. Critics of NPE litigation are pushing to make it easier to invalidate patents on software and business methods, and want to force losers pay the winners legal fees. The Supreme Court didnt resolve the issue in 2010, in a case involving a patent to hedge energy trades. The U.S. Court of Appeals for the Federal Circuit will hear arguments Feb. 8 on whether computer-implemented ideas can be patented. The U.S. Federal Trade Commission and Department of Justice are scheduled to hold a workshop Dec. 10 on the competitive effects of companies buying up patents for the primary purpose of litigation and licensing. Lobbying Costs The ITC Working Group, whose members include Apple, Google and Cisco, is lobbying Congress to limit NPEs ability to file cases at the U.S. International Trade Commission in Washington, which has the power to block imports if it finds patents have been infringed. The group has spent $430,000 on lobbying, according to U.S. Senate disclosures. What we need to do is get the right case to the Federal Circuit or get Congress to make changes, said Allan Lo, Googles deputy general counsel. The company seeks anything that helps to make the remedies for patent infringement more

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rational so you dont have the ability for any NPE or anybody get more than they are entitled to. The Federal Circuit, which specializes in patent law, last year upheld a judges decision to sanction lawyers for one patent owner that targeted banks. The trial judge said the licensing program had an indicia of extortion. Technology industries claim patents are valuable only if owned by big companies, when the Constitution doesnt require that a patented invention be used to make a product, Acacias Ryan said. If youre a big tech company and you know youve got a lot of surface area and you have a lot of exposure, one way to lower your cost is to go to Washington and lobby Congress, Ryan said. If you can make it difficult for the other side, youve improved your bargaining position in licensing. We understand the practical aspect of that. For Related News and Information: Top technology stories: TTOP <GO> Bloomberg legal resources: BLAW <GO> Google financial history: GOOG <Equity> CH <GO> Microsoft news: MSFT US <Equity> CN BN <GO> --Editors: Bernard Kohn, John Brecher

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Kiplinger NOVEMBER 2012 6 Great Stocks You've Never Heard Of http://www.kiplinger.com/slideshow/great-stocks-you-never-heard-of/2.html#ixzz2BdwtAXUo Become a Fan of Kiplinger's on Facebook

Thinkstock 52-week high: $44.98 52-week low: $21.73

1. Acacia Research Corp. (ACTG)

Est. earnings for 2013: $2.46 per share Est. annual earnings growth over the next 5 yrs: 38.0% Technology and drug companies use patent protection to keep competitors at bay for decades. But Acacia Research Corp. has managed to turn buying and licensing patented ideas and formulas into a stand-alone business -- and a highly lucrative one at that. Rather than develop patents itself, the company -- which, like American Vanguard, is based in Newport Beach -- partners with patent holders to prosecute violations and protect their inventions from unauthorized use. Acacia now controls 200 patent "portfolios" covering thousands of inventions. Analysts note that patent revenue can be "lumpy," varying by wide amounts each year. But the lumps have been pretty impressive this year. During the first six months of 2012, Acacia earned $1.19 per share, compared with 37 cents per share during the same period a year ago. Analysts expect earnings to soar 383% in 2012, to $2.32 per share. At $25.48 (as of November 1), Acacia sells for just 10 times estimated 2013 profits -- a screaming bargain for a company whose earnings are expected to grow at a 38% annual clip over the next three to five years. 2. Air Methods (AIRM) Thinkstock 52-week high: $124.19 52-week low: $70.35 www.SpecOpsComm.com

Est. earnings for 2013: $6.82 per share Est. annual earnings growth over the next 5 yrs: 16.8% Air Methods is a company that provides medical transportation services. It specializes in using helicopters to pick up severely injured or ill patients and take them to trauma centers. The company, launched in the 1970s and based in Englewood, Colo., went public in 1991. Since then, it has purchased a series of competitors and has been growing at a breakneck pace. In the first half of 2012, revenue jumped 48%, to $222.5 million, from the year-earlier period, and profits more than doubled, to $44 million, or $3.39 per share. The stock, at $108.08, sells for 16 times projected 2013 earnings of $6.82 per share. That looks like a good price, considering that analysts expect Air Methods to generate annual earnings growth of 17% over the next three to five years.

3. American Vanguard (AVD) Thinkstock 52-week high: $37.51 52-week low: $10.94 Est. earnings for 2013: $1.52 per share Est. annual earnings growth over the next 5 yrs: 29.5% Making pesticides and insecticides may not sound like an exciting business, but American Vanguard has made it plenty profitable. The company earned 79 cents per share, or $22.1 million, in 2011 -- double the profits of the year before. During the first six months of 2012, profits jumped another 59%, to $17.5 million, or 61 cents per share. Analysts expect double-digit growth for the next two years at least. The reason: American Vanguard has a virtual lock on the market for some pesticides that have proven particularly effective in combating rootworm, the current scourge of corn farmers. The company also has a delivery system -- the "smart box" -- that reduces farmers' exposure to the toxic chemicals they must apply to the soil to kill the bug. Eventually, chemical companies may come up with genetically engineered seeds that are better resistant to pests, but that could take years. In the meantime, analysts project, American Vanguard's earnings should grow at a blistering 29.5% annual pace over the next few years. At $32.81 (as of November 1), the stock sells for 22 times projected 2013 earnings of $1.52 per share, a reasonable price-earnings ratio in light of the projected earnings growth. Gabelli & Co. analyst Amon Wilkes believes the stock will sell for $43 by the end of 2014. 4. Dorman Products (DORM) Thinkstock

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52-week high: $33.18 52-week low: $17.43 Est. earnings for 2013: $2.13 per share Est. annual earnings growth over the next 5 yrs: N/A Auto parts maker Dorman Products has benefitted mightily from the proliferation of old cars needing replacement parts. During the first half of 2012, the company posted a 13% gain in revenue and a 21% jump in profit. In an upbeat second-quarter earnings release, the Dolmar, Pa., company attributed the heady gains to demand for newly introduced products. Meanwhile, Dorman's administrative expenses dropped as a percentage of revenue, allowing the company to boast an enviable 37% gross profit margin (revenues minus cost of sales, divided by revenues). Few analysts cover Dorman -- not surprising, given that annual sales are less than $300 million -- and there are no long-term earnings projections for the company. But all three of the analysts who do follow the stock have "strong buy" recommendations. With a history of double-digit earnings growth, Dorman may be worth a look. The stock, at $33.18 on November 1, sells for 16 times projected 2013 profits of $2.13 per share. 5. Liquidity Services (LQDT) Thinkstock 52-week high: $66.57 52-week low: $26.39 Est. earnings for 2013: $2.19 per share Est. annual earnings growth over the next 5 yrs: 29.9% Liquidity Services is government and industry's answer to eBay. The Washington, D.C., company operates a number of online auction sites, such as Govdeals.com and www.govliquidation.com, that the Department of Defense and other government agencies use to unload scrap and other assets that are no longer needed. In July, Liquidity acquired GoIndustry, which sells assets for dozens of manufacturing companies located all over the world. In the quarter that ended June 30, revenues were up 46% from the year-earlier period, while adjusted net income (which excludes stock compensation and acquisition costs) rose 122%. The company says it's benefiting from government cost cutting, as well as from Americans' growing cost-conscious mentality, which has everyone looking for bargains. At $41.87 on November 1, the stock trades for 19 times estimated 2013 earnings of $2.19 per share. With analysts estimating long-term earnings growth of 30% a year, Liquidity shares look like a good deal. Janney Capital Markets analyst Shawn Milne rates the stock a buy and has a one-year price target of $67.

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6. On Assignment (ASGN) Thinkstock 52-week high: $20.93 52-week low: $9.34 Est. earnings for 2013: $1.24 per share Est. annual earnings growth over the next 5 yrs: 19.1% At On Assignment, job one is to find people jobs. But the Calabasas, Cal., staffing company isn't looking for just any jobs. It finds positions for doctors, nurses and engineers. That's important, says Deutsche Bank analyst Paul Ginocchio, because health care and technology are businesses likely to grow even in a stagnant economy. And On Assignment appears to be capturing a growing percentage of the business. That should keep the company's earnings growing at a double-digit rate for the next three to five years. The company is also well managed, bringing an increasing amount of revenue to the bottom line. At $19.72 on November 1, On Assignment sells for 16 times projected 2013 earnings of $1.24 per share. That's only 6.5% below the $21 one-year target price that Ginocchio set for the stock when he first started covering the company in July. Nonetheless, he continues to rate the stock a buy.

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Wall Street Journal April 19, 2012 Acacia 1Q Results Soar on Record Revenue By Nathalie Tadena

("Acacia 1Q Results Soar On Record Revenue," at 5:35 p.m. EDT, incorrectly described the company's business model in the third paragraph. The correct version follows): Acacia Research Corp.'s (ACTG) first-quarter earnings soared as the developer and acquirer of patents reported record high revenue. Shares jumped 6.9% to $42.10 after hours as results beat analyst expectations. Acacia partners with inventors and patent owners, licenses patents to other users and shares the revenue. The company controls more than 200 patent portfolios, covering technologies that include mobile computing, automated communications, medical monitoring and many other segments. Last year, the company posted weaker bottom-line results as operating expenses grew. In the latest period, the company reported a profit of $50.1 million, or $1.09 a share, up from $12.4 million, or 34 cents a share, a year earlier. Excluding stock-based compensation, amortization and excess benefit tax expenses, earnings rose to $1.48 a share from 52 cents a share. Revenue jumped 62% to $99 million. Analysts polled by Thomson Reuters had expected a per-share profit of 99 cents and revenue of $92.2 million. Operating costs and expenses fell 15%. Through the close, the stock had gained 7.9% since the start of the year.

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International Business Times March 29, 2012 AOL Shares Gain After Patent Auction Moves By David Zielenziger

Shares of AOL (NYSE: AOL), the seventh most-visited website, have gained nearly 7 percent this week after the company said a patent sale is an option to increase shareholder value. Other options include sale of the company to private equity companies that have approached it or to another public company. The New York online service said it hired Evercore Partners (NYSE: EVR), which has advised many technology companies, as its investment banker. Shares of AOL opened Thursday at $19.15, down 14 cents, after a nearly 8 percent gain from last Thursday's close of $17.77. AOL has been under pressure from a hedge fund, Starboard Value Partners, to take steps to improve performance since last year. Starboard acquired a 4.2 percent stake last quarter which has been boosted recently to 5.2 percent. Other technology companies with similar activist investors such as BlackBerry developer Research in Motion (Nasdaq: RIMM) and Yahoo (Nasdaq: YHOO) have also been forced to take action such as replacing CEOs or weighing asset sales. Valuable Patents? A patent sale could fetch hundreds of millions for AOL but is no guaranteed panacea. "Producing revenue from intellectual property (IP) must be a primary part of a proactive corporate strategy," said Paul Ryan, CEO of Acacia Research (Nasdaq: ACTG), a Newport Beach, Calif., investment company specializing in IP. Ryan warned that some companies that tried to bank on their IP, such as photography giant Eastman Kodak (Pink: EKDKQ) failed and fell into bankruptcy. Others like InterDigital (Nasdaq: IDCC) put themselves up for auction and had no bidders. These companies jumped into last year's IP "gold rush" stimulated by defunct Nortel Network's sales of patents that fetched $4.5 billion from a syndicate led by Apple (Nasdaq: AAPL), EMC (NYSE: EMC) and others.

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"Those days are over," Ryan said, suggesting AOL's new management team needs a better strategy. AL previously reported fourth-quarter net income from continuing operations of 42 cents a share, beating expectations, although net income fell 65 percent to $22.8 million, or 23 cents, as revenue dipped 3 percent to $576.8 million. AOL spun out of Time Warner (NYSE: TWX) in 2009, 10 years after a far bigger AOL acquired that company in a deal valued at $160 billion. AOL now is valued at $1.81 billion.

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The Deal Pipeline February 29, 2012 For Activists, IP Is It By Paula Schaap

Tech is the new black for activist hedge funds. It's all there in the 13Fs, the Securities and Exchange Commission forms that hedge funds with more than $100 million in assets under management must file every quarter disclosing their equity shares in public corporations. Apple Inc., of course, is a perennial favorite -- George Soros upped his stake 13% in the fourth quarter last year; it's 2% of his portfolio, according to regulatory filings. Likewise, it's in the top position of David Shaw's $23 billion hedge fund D.E. Shaw & Co. LP. But Apple isn't going anywhere anytime soon, even with the death of CEO Steve Jobs last year. The company's stock price hit an all-time high of $526.29 per share in mid-February based, in large part, on the company's astounding growth rate -- revenues were $46.3 billion in the fourth quarter of 2011, with year-over-year growth of 73.3% -- not to mention an Ebitda margin for 2011 of 32.9%, as compared to an industry standard of 12.2%. So Apple might be a hedge fund favorite, but it's not for the activist end of the business. Russell Glass, a Carl Icahn protg and founder of RDG Capital LLC, which is involved in a campaign at software company DST Systems Inc., says two things have gotten activists into tech. First, the industry has matured, making companies less reliant on their boy-genius founders/CEOs for their brand. And second, Wall Street now understands better how to value intellectual property. "As intellectual property has become more of a mainstream asset, that has enabled more financing [for deals]," Glass says. While last year's big patent/activist story was Google Inc.'s $12.5 billion purchase of Motorola Mobility Holdings Inc.'s patents -- a sale engineered by corporate raider Icahn -- smaller activists are finding plenty of space to start campaigns.

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Starboard Value LP, for example, is pushing AOL Inc. to do something about the fact that it's rapidly losing out on the Internet ad revenue front to competitors Google and Facebook Inc. In January, Starboard CEO Jeff Smith said the company should sell its money-losing content properties, The Huffington Post and Patch Media Corp., for which AOL paid $315 million and $7 million, respectively. Then, Smith said, AOL could live off the revenue stream from its legacy dial-up Internet business -- yes, Virginia, there is still dial-up -- until it could find a way to monetize its patent portfolio. AOL said, thanks, but no thanks, and Smith is now in an all-out proxy fight with the content manager. Starboard Value also took a new position in Tessera Technologies Inc. in the fourth quarter, which Glass describes as practically a pure IP play. Another new position was in Exar Corp., which is developing software for cloud-based applications, and could also potentially have a valuable patent portfolio. Rob Stewart, executive vice president of Acacia Research Corp., a patent-licensing company that late last year bought Adaptix Inc.'s wireless technology patent portfolio for $160 million from private equity firm Baker Capital, says his company has had inquiries from activist hedge funds seeking Acacia's expertise as they try to figure out how to get value out of company patents. Acacia just concluded a private placement of its stock, raising $225 million at $36.75 per share. Not only did the offering attract smaller investors who were already involved with Acacia, but mutual funds also bought shares, according to someone familiar with the deal, in what is the latest investment hot sector. While Stewart wouldn't comment specifically on the fundraising, he says the company sees opportunities, either through outright purchase of other businesses, such as Adaptix, or patent portfolios, or joint ventures "What we see is the emergence of intellectual property as a free-standing asset class," Stewart says.

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Forbes.com February 2, 2012 Patent-Palooza: Why Investors Are Suddenly Focused on IP Posted by Eric Savitz, Forbes Staff Guest post by Paul Ryan

Paul Ryan is President and CEO of Acacia Research, a patent licensing firm.

Paul Ryan: Patent man. Only a few short years ago, intellectual property media coverage was relegated to a handful of legal journals, the occasional technology trade or localized depictions of an inventors plight against a corporate behemoth. Now, not a day goes by without front-page news featuring billion dollar acquisitions, litigation, or simply, the topic of IP. Yet, the very fundamental nature of this business remains a mystery to the general public, politicians and boardrooms alike. The worldwide financial community and media is inundated with Apple vs. Google smart phone wars, the demise of once patent-rich Eastman Kodak, a staggering $4.5 billion Nortel IP sale, Googles shocking acquisition of Motorola Mobility for $12.5 billion and the inability of patent-heavy InterDigital to find a strategic buyer. All of this coupled by the most sweeping changes to patent laws since the early 1950s; in the form of the recently passed America Invents Act. IP and patents are without question the hot topic of the day. That is in stark contrast to five years ago when, with the exception of notable success stories like Qualcomm, IBM and Texas Instruments, there was minimal media acknowledgment of the importance of IP in overall corporate strategies. The topic was esoteric, nebulous and ignored by even the most financially focused mainstream media outlets.

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What led to this overnight realization that IP matters? Of course, IP served as a solid defense mechanism, but the real catalyst was an acceptance for its role in defining competitiveness. This was further supported by an ability to empower a viable offensive business strategy designed to tax competitors. That initial paradigm shift, an awakening that opened the eyes of corporate America, is about to change yet again. It is safe to say that patents are the last competitive advantage that American corporations possess. Corporate have-nots are aggressively sizing up the haves and plotting a course of action that enables them to join this elite crowd. IP has gone from non-existence to the subject du jour. With this dramatic increase in acceptance, there is also the wide comprehension that patents have now evolved and are viewed as a new form of corporate currency. Or better stated, they are an asset class in their own right. This is precisely the reason that businesses have arrived at an unprecedented era, fueled by highvelocity transactions. Underprivileged companies are vulnerable to continuous attacks, as proven by volumes of IP infringement suits hurled at them by their more aggressive, patent-savvy competition. Change is further illustrated by the moves of innovative, IP-rich organizations to not only enforce and license inventions, but also to liquidate non-core technologies to financially flush competitors, eager to beef up their stockpiles. Ergo, the patent 1% is selling strategically to the patent 99%. As a result, this industry-wide transformation created a new ecosystem of specialized firms possessing sector-specific skill sets. The problem arising from this rapidly evolving landscape ishow does one really value a patent, something so arcane as a binary asset, which by some estimates are worthless 95% of the time? Corporations have begun to realize the influence of non-performing patent assets on their balance sheets. After all, The U.S. Federal Trade Commission, in The Evolving IP Marketplace, concluded that intellectual property, including patents, comprises 80% of corporate net worth in the U.S. today. The Patent Balance of Payments, was also stacked heavily to the negative. Corporate boards have begun to argue that managements have an obligation to generate a financial return on massive shareholder funded R&D budgets. The Patent Balance of Payments needed to swing to the positive. Bottom line, world-class companies woke up and realized that it was just a whole lot easier to work with patent licensing companies like Acacia than to wage constant battle. The bubble hasnt burst; companies are just catching on, and the industry is further evolving as demonstrated by my companys latest venture. Only weeks ago, Acacia announced its biggest patent portfolio acquisition. Not a partnership, but an outright purchase, when it paid $160 million for Adaptix, a pioneer in the development of 4G wireless technology. Within days of this transaction, Acacia filed separate disclosures with the SEC announcing that a new subsidiary immediately licensed these newly acquired patents to both Samsung and Microsoft. Acacia understood Adaptixs patents were multi-platform based and impacted not only the wireless handset manufacturers, but also the wireless carriers and wireless infrastructure players.

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At best, the U.S. and global economic recovery process since 2008s near collapse has been challenging, erratic and anemic. Companies are exploring what several years ago might have been deemed as unconventional means to generate incremental financial returns. The monetization of underperforming assets increasingly patents is now a focused effort to bolster bottom lines. Management is not just incentivized, but obligated, to license, enforce and/or sell patent assets for the benefit of its shareholders. As a result, the patent transaction market is not just aliveits thriving.

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International Business Times January 29, 2012 Technology Focus: Patent Gold Rush Isnt Over Despite Kodak Collapse By David Zielenziger
Shareholders of InterDigital got a rude awakening last week: On Tuesday, after the company pulled itself off the auction block, its market value plummeted 19 percent, to about $1.72 billion. Trouble is, in late July, InterDigital was valued as high as $3.75 billion, not long after CEO William Merritt put the King of Prussia, Pa.-based engineering company on the block. The shares soared. "The whole market was absolutely exploding," recalled Acacia Research CEO Paul Ryan. "InterDigital wasn't an isolated case." Ryan should know: His Newport Beach, Calif.-based company is one of the nation's biggest licensees of patents and technologies. This month, it went whole hog and acquired an entire company, Adaptix, for $160 million. Adaptix holds more than 230 patents for the 4G technology now coming to wireless networks. Last year, of course, was an exception in the patent and intellectual property community because bidders could pick over the carcass of defunct Nortel Networks, a Canadian descendant of AT&T that had been one of the leading pioneers in communications technologies. A Canadian bankruptcy judge ordered an auction of 6,000 patents in a deal managed by Lazard. In what was far from the first Canada gold rush, the so-called "Rockstar Bidco" led by Apple, along with Research in Motion, Ericsson, EMC, Sony and Microsoft, paid a whopping $4.5 billion after others like Google balked. That kind of pricing raised directors' eyebrows. Within weeks, InterDigital had hired Evercore and Barclays Capital to sell itself. Google paid IBM an undisclosed sum for some valuable communications patents. Then it decided to acquire Motorola Mobility for $12.5 billion for its 17,000 patents as well as expertise building consumer electronics such as smartphones. In Rochester, N.Y., Eastman Kodak CEO Antonio Perez, desperate for cash to complete his hoped-for transformation of the 132-year-old company this year, hired Lazard to auction 1,100 imaging patents valued at a minimum of $2 billion. Very little happened, though. When Kodak announced its third-quarter loss had more than tripled to $222 million as revenue fell 17 percent to only $1.46 billion, Perez stayed optimistic:

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"No one is going to take away the camera from a wireless device," the Kodak CEO said last November, even as he also noted Kodak's cash pile had shriveled to only $862 million. Meanwhile, phones at places like Acacia were "ringing off the hook," CEO Ryan said last week. "The reason nobody was interested in bidding for the Kodak portfolio is they were concerned the value would be wiped away." Ryan was right: Kodak filed for bankruptcy Jan. 19, with assets of only $5.1 billion and liabilities exceeding $6.8 billion. Now U.S. Bankruptcy Judge Allan Gropper is in charge. Two separate meetings of Kodak creditors and vendors were held last week. Kodak shares closed Friday at only 32 cents, valuing the whole company at only $86.6 million. Meanwhile, its enterprise value is $757 million, which gives Gropper something to work with and which may well understate the value of the 1,100 patents. About 20 years ago, new bosses in the technology community realized they could monetize the assets in their filings. At Texas Instruments, turnaround CEO Jerry Junkins turbocharged his general counsel, Dick Agnich, to go after scores of chipmakers that had infringed on semiconductor patents. He collected more than $1 billion. When Louis V. Gerstner was brought into a near-bankrupt IBM in 1993, he was advised IBM was sitting on another patent goldmine. For the first years of its turnaround, much of its new business was from royalties and licenses. That explains why there is so much litigation now among giants like Apple and Samsung Electronics and HTC; Oracle and Google, Rambus and virtually all the chipmakers. It also explains why companies that don't make anything, like Qualcomm, are so successful, having established their IP as industry leaders and profit centers. "Boardrooms all over the world are waking up," Acacia's Ryan said. He makes a good living in the IP world. Acacia shares have soared 57 percent in the past year.

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Managing Intellectual Property January 26, 2012 InterDigital Strategy Highlights Shifting IP Paradigm By Eileen McDermott

Just months after the mega-deals for Nortel and Motorola patents, Interdigital has failed to find a bidder for its portfolio. Is the patent boom over already? The wireless technology company this week ended its six month strategic alternatives review process in which it sought to sell off a portfolio of nearly 20,000 patents and patent applications. The portfolio covers inventions used in every cellular device that ships today, according to a company release. Interdigital did the smart thing after seeing the results of the Nortel patent auction, but for whatever reason Google decided on Motorola, said Paul Ryan, CEO of patent acquisition and licensing company Acacia Research. Once the market had spent a combined $17 billion on the Nortel and Motorola portfolios, they were probably exhausted, said Ryan, and not exactly eager to jump at another vast portfolio. There was a moment in time where one group needed patents, but such transactions are not likely to become popular, Ryan added. Cross-licensing deals and government scrutiny remain obstacles to companies making such enormous purchases of intellectual property. If such transactions did catch on, Acacia might eventually be out of business the company buys up patents and then asserts them in litigation or requires companies to take a license. Most recently, Acacia purchased 3G technology provider Adaptix for $16 million and has already struck licensing deals with Microsoft and Samsung. Greater Role for IP Counsel

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Either way, this paradigm shift in which intellectual property is increasingly being viewed as an asset to be monetized rather than just a defensive litigation tool means that more in-house heads of IP are likely to begin reporting directly to CEOs rather than to general counsel, Ryan said. He added: The mindset on IP is shifting to a return on shareholder capital companies are asking: Is this a business issue, or a staff litigation issue? The next portfolio that will be up for grabs is Kodaks store of digital imaging patents. The company filed for Chapter 11 bankruptcy on January 19. Jeffrey Whittle of Bracewell & Giuliani said potential buyers of that portfolio include all the main manufacturers Apple, HTC, Samsung, Research In Motion, Google, Hewlett Packard and Nokia. Whittle said it would not be surprising for a company to pay $5 billion dollars or more for all of the Kodak patents but not all of them are on the market. For now, the offering is in the $2 billion to $3 billion range. Once Kodak gets to bankruptcy court, bids will begin to trickle in, said Ryan. Interdigital reported it will continue to focus on developing wireless technologies and the monetization of those assets through vigorous and comprehensive patent licensing and sales efforts. The company has estimated it will be able to generate sustainable annual revenue of at least $800 million in three to five years.

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Dow Jones Newswires January 18, 2012 MARKET TALK: Acacias Adaptix Deal Quickly Proves Merit By Ben Dummett

If investors had any doubts about the merits of Acacia's (ACTG) $160M deal to acquire Adaptix, they likely don't anymore. Since announcing the deal Friday, Adaptix has secured patent-licensing pacts with Microsoft (MFST) and Samsung (SSNHY) for its 4G technology. Further, ACTG expects to make similartype acquisitions in future. After rising 7% Friday on the news, ACTG shares are up another 4.9% today at $42, putting the week's gains at 6.3%.

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Associated Press January 13, 2012 Acacia Research Buys Adaptix for $160 Million

(AP) NEWPORT BEACH, Calif. Technology patent licensor Acacia Research Corp. said Friday that it bought wireless technology developer Adaptix Inc. for $160 million to gain access to its 4G, or fourthgeneration, wireless systems patents. Acacia said Adaptix has "one of the world's most significant" patent portfolios focused on 4G technology, with patents filed as early as 2000. Wireless carriers are increasingly switching to high-speed 4G networks.

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The Orange County Register January 13, 2012 O.C. Patent Specialist Pays $160 Million for Texas Firm By Jan Norman

Acacia Research Corp., a Newport Beach patent licensing specialist, said one of its subsidiaries has bought next-generation wireless technology pioneer Adaptix Inc. for $160 million. Adaptix Inc. owns 230 issued or pending patents in 13 countries related to 4G technology for wireless devices. It also has $10 million in cash, Acacia said. The seller is private equity firm Baker Capital. Acacia Research Corp. in Newport Beach said it bought Adaptix for $160 million Adaptix is in Carrollton, Tex. Acacia moved its business development and licensing subsidiary to Frisco, Tex. last January. Both are near Dallas. Acacia typically partners with university and smaller companies to license manage and defend their patents. It controls more than 200 patent portfolios. According to the Wall Street Journal, this is Acacia's first major acquisition of a patent-owning company. Acacia CEO Paul Ryan said, "Adaptix has been on the forefront of developing next-generation wireless communications for the past 11 years, and Acacia's acquisition provides our shareholders with a great opportunity to participate in the worldwide growth of 4G wireless technologies as Acacia continues to expand its patent licensing business."

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Reuters January 13, 2012 UPDATE 2-Acacia Research Buys 4G Technology Developer for $160 Mln

* Buys privately held Adaptix * Adaptix has a portfolio of 230 issued and pending patents Jan 13 (Reuters) - Acacia Research Corp, which acquires and licenses patent rights to various technologies, said its unit bought privately held Adaptix Inc, a developer of 4G technologies, for $160 million, to expand its patent portfolio. "With patents filed as early as 2000, Adaptix's research and development efforts have resulted in one of the world's most significant intellectual property portfolios focused on 4G technologies," Acacia said in a statement. U.S.-based Adaptix has a portfolio of 230 issued and pending patents in 13 countries. Adaptix holds no material assets other than its portfolio of patents and $10 million in cash. Evercore Partners was the financial advisor to Adaptix. Technology patents can be very valuable. Last year, bankrupt Nortel sold 6,000 wireless patents and patent applications for $4.5 billion. Shares of Newport Beach, California-based Acacia closed at $36.98 on Thursday on the Nasdaq.

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