Ocean Tomo catches the wave
TECH MATTERS | Approximately 300 speculators, inventors and others gather for auction of intellectual property
As soybean speculators on April 19 were winding down another day in the pits of the Chicago Board of Trade, a few doors to the east on Jackson Boulevard the seeds of a fledgling financial market were just taking root.
Ocean Tomo, a four-year-old merchant bank making waves in the world of intellectual property, attracted approximately 300 speculators, inventors, attorneys and others to its live auction held at the Union League Club. Over the course of three hours, 34 “lots” of patents and other proprietary items were sold for nearly $11.5 million. Sellers such as Eastman Kodak and Sun Microsystems and small companies and individual investors paid Ocean Tomo fixed listing fees and double-digit commissions to auction off the rights of their creations.
“Ocean Tomo’s vision is to make intellectual property an investable and tradable asset,” said Managing Director Andrew Ramer. “The auction is the only thing even close to a quasi-public market for IP.”
Headquartered at 200 W. Madison and with regional offices on the coasts, Ocean Tomo advises corporations, institutional investors and law firms on the strength of their intellectual property holdings. The firm, which was honored by the SunTimes and Kuczmarski & Associates with a 2006 Chicago Innovation Award, also manages a $200 million investment fund, and last year established the Ocean Tomo 300 Patent Index on the American Stock Exchange.
The idea to sell patents in a live auction was claimed by Vice Chairman Dean Becker (an aficionado of automobile auctions) in the fall of 2005. Ocean Tomo held its first auction six months later, and has run three to date.
Becker has founded and managed a hat-trick of telecommunications concerns, most recently Motorola Ventures-backed wireless directory assistance service 422 Inc. Before that, he founded Highland Park-based eWireless and Becker Beeper, which in the mid-1990s sold for $40 million. Now based in Palm Beach, Becker also oversees Ocean Tomo’s involvement with entertainmentoriented ventures.
The theatrics of the most recent live auction, which drew bids from discreet attendees as well as anonymous buyers over the phone, peaked in the middle hour as two lots were sold for more than $2.5 million a pop. A suite of patents supporting video-on-demand applications was sold by Westport, Conn.-based Image Telecommunications Corp. for $2.75 million. RovingRadar Inc. of Wayland, Mass., sold a “friend finding” social networking patent for $2.6 million. For each, Ocean Tomo received a 10 percent “buyer’s premium” in addition to the compensation received from the sellers (between $1,000 and $6,000 a lot and a 15 percent commission.)
One irony about IP auctions is that the practice itself does not seem to be patentable. One attorney I spoke with who follows Ocean Tomo but has no direct dealing with the company theorized that the firm would “maybe reduce its prices” if a legitimate competitor were to emerge. Until then, first mover Ocean Tomo (a Japanese phrase for intelligent and friendly) seemingly controls the market it invented, and plans to hold its next Chicago auction in late October.
Yahoo!’s Brickhouse to present
Salim Ismail, who recently became head of the Brickhouse Unit at Yahoo!, is scheduled to speak at Web Content 2007 to be held at the UBS Tower here June 18-19.
Brickhouse is a newly launched product-development program within Yahoo! designed to help the company better compete with the likes of Google. Joining Ismail on the bill are local tech players Jason Fried of 37Signals and Howard Tullman of Flashpoint Academy. More information about the program, which is hosted by Chicago-based Duo Consulting, can be found at
Just another “babbling loony”
Ten years ago yesterday, the great Mike Royko left this town for friendlier confines in the sky. Needless to say, he is dearly missed. When contemplating a way to weave the anniversary of his passing into today’s column, my first instinct was to Google “Mike Royko” and see what happened. I immediately (re)discovered this quote: “It’s been my policy to view the Internet not as an ‘information highway,’ but as an electronic asylum filled with babbling loonies.” Methinks he’s gotta point! I should have checked the Newberry Library first. No invention or algorithm can replace black ink on white pages.
Brad Spirrison is a local technology reporter and president of MidwestBusiness.com.