Ron Conway on the Patent Licensing Business Model

RC: I would never invest in a company that was a basket of patents and then made a business of litigating with people. I think that is ... I want to say "slimy," but I don't want to be that bad. I just think that's a really difficult way to think you're going to add value and make a return on investment.

Via O'Reilly Radar

Comments

[GTH]

But would Mr. Conway invest in a company whose business model required infringing on legitimate patents (for argument sake, not software patents)?

[TektonikShift]

GTH,
Great point.
Many big companies make it a point not to pay patent royalties to small innovative companies. The small company having pioneered a new technology is left with few options but sell out to patent collectors.

Another point, many great companies have such IP licensing model; Dolby, Arm Holdings, Ceva and others.

-Tek

[TektonikShift]

Dear Ron,
Given proper guidance and a little support, I bet some of these small innovative companies can do lots to productize the technology and add value beyond the patent license.

Isn't it the job of the investor to identify these diamonds in the ruff and nurture them toward greatness?

-Tek