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The company claims to own patents covering the storage and therapeutic use of umbilical cord and placental blood stem cells. It has licensed the technology to 20 of the 24 cord blood banks around the country. The four holdouts are appealing a multimillion-dollar patent infringement verdict.

President and CEO Nicholas Didier said IP Finance is “in the process of expanding its capital base as well as broadening its IP portfolio.” He was in the Bay Area recently to scout for law firms that would help the company structure some of those deals.

“We are looking for lawyers in major law firms with stellar credentials and specific skills and experience in the technology we are acquiring,” Didier said.

The company needs firms that can handle a wide range of services. The work generated by an IP Finance could keep a dozen attorneys busy for months, Didier said.

“There is a lot of transactional law going on here,” he said. “We need help in structuring agreements between patent owners and IP Finance. Then there’s the financing agreements between investors and IP Finance, and you also have litigation and prosecution and due diligence work.”

Also, he noted, patent portfolios are not static. “We need to have constant counseling on patent strategy.”


Paul Andre, a litigation partner at Perkins Coie in Menlo Park, has done a fair amount of enforcement work for patent holding companies, including IP Finance. He said patent enforcement has come a long way from a shadow industry inhabited by a few notorious licensing shops that wielded broad patents through a small band of contingency lawyers.

Now, patent-holding companies include many major corporations that have set up subsidiaries for the purpose of commercializing and monetizing their intellectual property. Even Silicon Valley firms like Intel and Hewlett-Packard, long the targets of patent trolls, are investing heavily in licensing their patents.

In fact, it is becoming increasingly difficult to distinguish licensing work done by corporations and the traditional patent- holding company, Andre said.

“There’s not much difference anymore between people who speculate in real estate and those who speculate in IP,” Andre said. “Some of them have spent hundreds of millions of dollars to develop the technology and obtain those patents and they are trying to get fair market value for their IP.”

Cooley, which counts among its clients some of the largest patent-holding companies in the country � including Ronald A. Katz Technology Licensing and AT&T � itself as a one-stop shop for patent-holding companies.

“We want to handle everything for them, from setting up affiliates to helping them develop licensing models or even helping them shore up their portfolio by helping them find valuable patents,” Friel said. “This sector is becoming increasingly important to us. We now have a substantial amount of litigation business representing holding companies and traditional companies that want to monetize their portfolios.”

Cooley is currently representing more than half a dozen patent-holding companies in multiple lawsuits.

“We are starting to discover that some of our best friends are trolls,” he joked.


Many major law firms, however, are still reluctant to deal with patent enforcers for various reasons. Some law firms also shun patent-holding companies because of their reputation that they can’t pay full price.

That is not true anymore, according to Didier. IP Finance, he said, pays full price.

“We don’t believe in contingency fees,” Didier said. “We believe that the services should be properly compensated, and law firms are not well-equipped to bear a financial risk. That’s why we raise our own capital.”

Some firms that are cultivating defense work turn away what they call “made for lawsuits” companies because they don’t want to alienate potential corporate clients.

“We represent a large technology client base, and these are the typical companies that are being harassed by large patent- holding companies, so we try to avoid taking on those cases,” said Craig Tyler, a patent litigation partner at Wilson Sonsini Goodrich & Rosati’s Austin office.

But that doesn’t mean the firm’s lawyers are cut off from the lucrative transaction work being brought in by holding companies. Wilson partner Selwyn Goldberg does extensive work setting up holding companies. The firm just has to be careful in choosing clients, he said. That means no client that will be suing everyone in all industries.

“The pure patent-holding company could present serious conflict risks for law firms because there is always a risk they would want to sue one of your clients or a future client,” Goldberg said.

But Friel is not bothered by potential conflicts issues.

“Conflicts are a fact of life for every large law firm,” he said. “You just have to pay very close attention to it.”