US-based patent advisory and transaction services provider Aqua Licensing intends to begin helping corporates take equity stakes in startups in return for supplying them with patents, TechCrunch has reported.
The model would involve Aqua transferring patents from larger companies who no longer need them to startups that would find them more useful, particularly in terms of legally protecting their own innovations. The corporates would in turn acquire equity in those startups.
Aqua named smartphone and laptop producer Lenovo, telecommunications firm AT&T and Rambus, a semiconductor technology developer that has been involved in numerous intellectual property (IP)-based lawsuits in the past 12 years, among the initiative’s initial partners.
Aqua founder Mark McMillan told TechCrunch it will search for startups with technology that could potentially disrupt its partner companies. If any of the startup’s patents “likely read” on those held by the larger companies, it can transfer their patents and business plan to the corporates who decide whether to invest.
McMillan said: “A final closing condition has to be the closure of a qualified venture funding round and [the big tech company’s] commitment to invest the proceeds of [that patent sale] into that round.
“It also has to give the startup at least 90 days to complete the funding round. After that, the [big tech company] gets the same terms as the VCs in the round and becomes a minor syndicate player, and the startup gets full ownership rights to the IP assets.