Korean NPE Intellectual Discovery seeks to become top-3 IP monetisation player

Olivia Rafferty

12 April 2024

Intellectual Discovery, which started life as a government sponsored sovereign patent fund operator in 2010, has an ambitious five-year plan. After a planned IPO on the KOSDAQ market in 2026, the company hopes to gain enough capital to become one of the world’s top three IP monetisation players. 

The NPE’s 17-man IP team in Seoul, headed up by Dongsuk Bae, manages a portfolio of over 2,000 active granted patents globally, with more than half under its subsidiaries, such as Wireless Alliance. 

Bae first joined Intellectual Discovery in 2014, before he was appointed executive vice president and head of IP in 2017. Before his time, he notes, the company looked a bit different. As a government-sponsored patent fund operator on the sharp end of budget cuts, the organisation faced a cash crisis in 2016.

Over the last seven years, the company has increasingly focused on how its IP business can make a profit on its own, making Bae’s chief objective the monetisation of its patents.

IAM sat down with Bae to discuss how the company leverages its IP to gain profits creatively, including through a recent 30% acquisition by Korean biometrics company Xperix.

Before joining Intellectual Discovery, Bae was a director at Idea Bridge Asset Management, another of Intellectual Discovery’s subsidiaries. He previously served a long stint as a general manager at LG Electronics, where his role was similar to his current positon in terms of IP monetisaion, he reveals.

Bae successfully represented LG Electronics in its case against Taiwanese computer manufacturer Quanta all the way up to the US Supreme Court. That case was particularly significant because, in its 2008 ruling, the court reaffirmed the validity of the patent exhaustion doctrine, which states that once a patent owner has sold a patented product for the first time, they no longer have exclusive rights over it. 

He also helped the Korean electronics giant score major cross-licensing deals with Microsoft, IBM and Intel and other tech giants. His experience in licensing and litigating served as a crucial base for the leading role he plays at Intellectual Discovery today, he says.

Bae reveals that Intellectual Discovery wants to become a global top-3 IP monetisation player. “That is the goal,” he says.

One way it is seeking to get there is by going public on the KOSDAQ market by 2027. He explains: “Right now, our size and capital gain only allows us to run up to 10 IP asset campaigns at a time. Once we IPO and gain capital gain, we will be able to afford to run more than 50 campaigns, which could make a significant difference to our market stance.”

The company has already come a long way since Bae’s arrival – when the company was making zero profits on its IP. In the past six years, the company has amassed a total revenue of over $100 million, with 80% of that derived from its licensing business, he reveals.

The company also has around six more licensing deals in the pipeline and, although the details of those cannot be disclosed, he confirms at least one will be closed by the end of 2024 – with a major one due to close in 2026.

Outside of bilateral licensing, Intellectual Discovery is also an active participant in patent pools – and has historically been a member of many different programmes, including Avanci’s 4G and 5G pools, Access Advance’s HEVC and AAC pools, and Sisvel’s 5G and VP-9 pools.

More significantly, the company recently celebrated the acquisition of 30% of its business by leading Korean biometrics company Xperix, which officially closed on 22 March for 27.2 billion Korean won ($20.2 million). The value of Intellectual Discovery’s IP assets played a key role in that investment, Bae emphasises, noting that Xperix particularly appreciated the amount of revenue that Intellectual Discovery has been able to accumulate through patent licensing deals alone in recent years, as well as its investments in tech ventures like FuriosaAI and Phantom AI.

“We welcome Xperix as a new owner and expect that the investment of a company as big as it will be just the advantage we need to hit our long-term growth goals,” he comments. The investment in itself is proof that the company’s monetisation strategy is working, he adds.

Intellectual Discovery is also looking to expand its operation capacities. While it currently has no in-house R&D team and will often collaborate with universities and government labs on specific projects, it is currently looking to establish its own R&D team, which would be completely dedicated to AI-related technology.

As an NPE, litigation also plays a major role in Bae’s day-to-day monetisation strategy. One major case in which the company scored a major win before the Central District of California Court was in its patent assertion vehicle Pavo Solutions LLC’s USB patent infringement case against Kingston Technology. The court awarded it $7.5 million in 2020 – a decision that was affirmed two years later by the US Court of Appeals for the Federal Circuit. Many of the company’s other cases have been settled out of court. 

While Intellectual Discovery has long focused on enforcing its patents in the US, the NPE is also looking to open that up to Korea this year, Bae adds.

Olivia Rafferty

Senior reporter

IAM

olivia.rafferty@lbresearch.com