Patent Land Grab Continues
Thesis: Companies such as Arrowhead Research are attempting to capitalize on the fragmented nanotechnology intellectural property landscape by building a powerful "patent toolbox." Will they strike gold?--only time will tell.
The company Arrowhead Research recently announced that its NanoPolaris subsidiary has assembled a significant portfolio of intellectual property related to carbon nanotubes. See the Dec. 8, 2005 article here: http://www.arrowres.com/news.html
The Company is listed on the Nasdaq [ARWR] and has a market cap of $107 million. Arrowhead is a Cal Tech spinout that is attempting to build a cogent IP portfolio by systematically procuring IP from various universities that may be key for the commercialization of future products. Arrowhead plans to generate revenue by licensing their portfolio.
One might think of Arrowhead as a private version of what the PTO (Patent and Trademark Office) sometimes encourages and endorses known as patent pools. Government-sponsored or privately contracted patent pools provide easy and standard access to the most fundamental sciences and technologies underlying an industry. Such pools are encouraged because they prevent a situation in which every company must engage in complicated contractural arrangements with numerous entities to secure the fundamental IP needed for their technology. Other companies, such as privately owned Nanosys, are engaged in a similar strategy of acquiring a strong patent portfolio in anticipation of later commercial developments.
However, I'm uncertain investing in Arrowhead just yet is wise. Nanotechnology IP is so nacent, fragmented and complicated that there is great uncertainty as to which IP will underly the most lucrative commercial developments of the future. The state of the industry is somewhat reminescent of the land grab that followed the Homestead Act of 1862, in which settlers were able to claim 160 acres of free land. Who would be so lucky to squat on land that was particularly fertile or would later have valuable mineral right to gold or oil? Nobody could know. Arrowhead's strategy could be successful, as proven by Rambus [RMBS], an early mover that is now a $1.6 billion company licensing the critical IP related to computer RAM technology, but it's extremely difficult for an investor in the public markets to evaluate something as nebulous as a patent portfolio when so much uncertainty exists.
Until the road to commercialization becomes clearer, a wait and see approach may be best for companies that have no product pipeline but are nonetheless assembling a powerful intellectual property portfolio. Keep an eye on Arrowhead for now.
Indexed By Tags: future, nanotech, nanotechnology, technology, patent, intellectual property, Arrowhead Research, Rambus, PTO, Cal Tech
The company Arrowhead Research recently announced that its NanoPolaris subsidiary has assembled a significant portfolio of intellectual property related to carbon nanotubes. See the Dec. 8, 2005 article here: http://www.arrowres.com/news.html
The Company is listed on the Nasdaq [ARWR] and has a market cap of $107 million. Arrowhead is a Cal Tech spinout that is attempting to build a cogent IP portfolio by systematically procuring IP from various universities that may be key for the commercialization of future products. Arrowhead plans to generate revenue by licensing their portfolio.
One might think of Arrowhead as a private version of what the PTO (Patent and Trademark Office) sometimes encourages and endorses known as patent pools. Government-sponsored or privately contracted patent pools provide easy and standard access to the most fundamental sciences and technologies underlying an industry. Such pools are encouraged because they prevent a situation in which every company must engage in complicated contractural arrangements with numerous entities to secure the fundamental IP needed for their technology. Other companies, such as privately owned Nanosys, are engaged in a similar strategy of acquiring a strong patent portfolio in anticipation of later commercial developments.
However, I'm uncertain investing in Arrowhead just yet is wise. Nanotechnology IP is so nacent, fragmented and complicated that there is great uncertainty as to which IP will underly the most lucrative commercial developments of the future. The state of the industry is somewhat reminescent of the land grab that followed the Homestead Act of 1862, in which settlers were able to claim 160 acres of free land. Who would be so lucky to squat on land that was particularly fertile or would later have valuable mineral right to gold or oil? Nobody could know. Arrowhead's strategy could be successful, as proven by Rambus [RMBS], an early mover that is now a $1.6 billion company licensing the critical IP related to computer RAM technology, but it's extremely difficult for an investor in the public markets to evaluate something as nebulous as a patent portfolio when so much uncertainty exists.
Until the road to commercialization becomes clearer, a wait and see approach may be best for companies that have no product pipeline but are nonetheless assembling a powerful intellectual property portfolio. Keep an eye on Arrowhead for now.
Indexed By Tags: future, nanotech, nanotechnology, technology, patent, intellectual property, Arrowhead Research, Rambus, PTO, Cal Tech
posted by Clayton at 4:02 PM
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