Co-founders of patent analytics firm IP Checkups, Irv Rappaport and Matt Rappaport, were quoted in a recent Law360 article. The Rappaports argue that bills pending in Congress, an ongoing FTC investigation, and provisions in the America Invents Act may be affecting non-practicing entity investors, making them skittish. Notably, Apple and Intel both declined participation in the latest fundraising efforts of Intellectual Ventures, despite investing previously in the patent aggregation firm.
Congress has become tired of abusive patent litigation and has introduced a variety of bills aimed at reining in patent trolls. One particular area of focus relates to bringing ownership transparency to the patent marketplace, something IP Checkups has been working on. The FTC also launched an investigation into patent trolls and the White House is calling for a stronger patent system. In addition, new programs created by the America Invents Act (AIA) allow for challenging the validity of patents through inter partes reviews and have been discouraging investment in patent aggregators, making non-practicing entities less attractive investments for large corporations, or so it seems.
The fact that two of the largest tech companies that invested in Intellectual Ventures in the past, pulled out is a big indicator that there is uncertainty towards corporations supporting non-practicing entities. A combination of the actions taken by Congress, FTC, and the White House, as well as new administrative procedures available to companies through AIA might explain why investors are more hesitant in backing non-practicing entities.