Richard Lloyd

Anyone hoping that the monetisation market could be coming back to life and the pendulum might be swinging back towards patent owners is likely to be encouraged by today’s news that Erich Spangenberg is joining Marathon Patent Group as director of acquisitions, licensing and strategy. The former IPNav supremo will focus his attention on opportunities in Europe and Asia so it’s not exactly a ringing endorsement of the state of the US market, but any move by someone who is widely considered to be one of the sharpest players in the patent world is worth taking note of. 

According to a Marathon statement, the plan is for him to work primarily with large corporate patent owners - which may indicate the NPE is looking to enter into some privateering style deals. Spangenberg has undoubtedly picked up many detractors along the way so not all patent owners in Europe and Asia are going to welcome the news – which is probably just how he likes it. What seems to have prompted him to get back involved is the current uncertain state of play.

 “The patent market is in turmoil and under incredible pressure, so this is exactly the time I want to jump back in and join Doug and the rest of the Marathon team at what I believe is a historic point of opportunity in the patent market,” Spangenberg says in the press release.

He added some more detail in an email to IAM: “I believe we are at or near the bottom of a very significant repricing of the patent asset class. As a result, prices have declined, patent owners have become even more desirous of pursuing value creating strategies and new strategies will be deployed. Given recent developments at Marathon, Marathon is now well positioned to benefit from these market conditions.”

When asked how his approach might differ to the strategy he pursued at IPNav, the message from Spangenberg was: “Watch, one of my predictions will come true”. That refers to the series of predictions that he made for the patent market in 2016 which included the forecast that we would see the bottom of the market and that new IP business models would emerge.

Having been a major player in patent monetisation for most of its modern incarnation, Spangenberg pulled back a few years ago as he saw the climate worsen significantly for patent owners thanks to a series of Supreme Court and Federal Circuit decisions and the introduction of new post issuance review procedures at the Patent Trial and Appeal Board (PTAB). IPNav, the licensing business which he spent years building, has effectively been mothballed (its home page currently says that it’s transforming with a re-launch later this year) as Spangenberg has focused his attentions on a new data-driven platform called nXn Partners and, together with hedge fund investor Kyle Bass, has filed a series of PTAB reviews against what they deem to be weak pharmaceutical patents.  

However, at IAM’s Patent Law and Policy conference in Washington DC last November he revealed that he had recently bought his first patents since 2012. He has also indicated that he has been increasingly interested in opportunities in China and the development of its litigation system. The Marathon job gives him the platform to start to turn possibilities into realities.

Europe, meanwhile, has proved a successful hunting ground for Marathon in the past (most recently in April, when it was awarded injunctions against Yahoo! and Pinterest); and speaking to IAM back in 2013 Spangenberg made clear he holds the German system in high regard, while also putting in a good word for France. A growing number of NPEs have been operating in various European jurisdictions over recent years – and that’s before the Unified Patent Court kicks in next March (the UK’s Brexit vote notwithstanding).

What is perhaps most interesting about this move is that Spangenberg has opted to join forces with Marathon rather than build a new platform or resuscitate IPNav ahead of schedule. In his email to IAM, Spangenberg said that he considered the option of going it alone “very carefully” before adding: “After discussing the various structural options with fund and finance experts I respect, the opportunity just fits better with a public company model.”

Spangenberg and Croxall have a long track record of working together dating back to Croxall’s time at the software business Firepond where he used IPNav to help earn more than $90 million from licensing the company’s IP. In 2014 Spangenberg transferred a big chunk of his IPNav licensing business to Marathon, becoming the largest shareholder in the NPE in the process.

Following the new,s Marathon’s share price was up by just under 6% earlier this morning suggesting that the market is cautiously encouraged. For existing shareholders, however, it’s quite a statement that one of the largest backers of the business has decided to get on board to actively pursue new opportunities for the company. That’s the kind of shot in the arm that most NPEs would dearly love right now.