The $4.5 billion sale of bankrupt Nortel’s patent portfolio to a consortium of some of the world’s biggest tech companies back in mid-2011 was a watershed in the world of IP monetisation. The team that helped to get that deal done is relaunching with a new service offering for rights holders.
Marquis Technologies – the patent consulting firm set up by former members of Nortel’s IP department – has been acquired by financial services giant Hilco Global. The new business resulting from the link-up will be called Hilco IP Merchant Banking, and will provide “IP-based financial and technical advisory services [and] IP monetisation solutions” to rights holders and the financial and investment communities. It will also “be a proprietary investor in IP-driven transactions”, and will mainly seek to get involved in deals worth $100 million to $150 million.
Thirteen senior Marquis executives will be joining the new unit. The Marquis team traces its lineage back to Nortel’s in-house IP function which, after the auctioning-off of the Canadian TelCo’s patent portfolio, was hired by a consortium of most of the winning bidders – Apple, BlackBerry, Ericsson, Microsoft and Sony – to manage and monetise the acquired assets. Nortel’s chief IP officer John Veschi became the CEO of Rockstar, the NPE formed by the consortium to carry out these objectives. Other senior members of the Nortel group also made the move over to Rockstar, including IP chief technology officer Gillian McColgan and director of IP licensing Afzal Dean.
While Rockstar notched up what looked like some early successes – including deals with Huawei and Spherix – it was born at a time that the monetisation environment in the United States was becoming increasingly difficult for rights holders. Moreover, the Rockstar founders’ main objective with purchasing the Nortel portfolio was to remove a host of potentially problematic patents from the market; supporting the monetisation of those farther down the line was probably relatively low on their list of priorities. Veschi and his team had discussed a potential management buyout; but when defensive aggregator RPX came along with a $900 million offer for the portfolio in late 2014, Rockstar’s owners snapped it up.
Much of the Rockstar team, including Veschi, McColgan and Dean, then formed Marquis with the intention of providing advisory services to the IP industry. Apart from a strategic alliance with fellow consultants Parsa Wireless, little was heard from Marquis until last week’s announcement of the Hilco acquisition.
Veschi will serve as Hilco IP Merchant Banking’s chief operating officer, with McColgan continuing in the chief technology officer role and Dean as chief licensing officer. The CEO seat will be occupied by Michael Friedman, neither a Nortel nor a Rockstar alumnus but former head of investments at IP consultancy Ocean Tomo from 2007 until the end of last year. With a host of professionals with impeccable pedigree in the monetisation space, it will be interesting to see what Hilco IP Merchant Banking is able to achieve in a landscape where it is getting harder to do patent deals than ever before.