Cambridge, MA-based voice-to-text tech startup Vlingo, which just three months ago charged Nuance Communications with unfair competition, commercial bribery, breach of contract, and intentional interference with prospective business relationships, is being acquired by the Burlington, MA-based speech software giant, according to an announcement today.

Nuance (NASDAQ: NUAN) and Vlingo, which develops speech-recognition technology for cell phones that has been likened to Apple’s Siri, have spent years wrangling in court, starting with a 2008 patent infringement lawsuit filed by Nuance, covering its patent known as ’295. As of this September, the two companies were involved in seven open lawsuits with each other, five of which were filed by Nuance and two of which came from Vlingo.

[Disclosure: the brother-in-law of Xconomy Boston editor Greg Huang is a co-founder of Vlingo. Mr. Huang was not involved in the planning, directing, reporting, or editing of this story.]

Today’s announcements make no mention of the lawsuits. Nuance said in its statement that consumer demand for voice-enabled controls on devices like phones, tablets, televisions, and navigation devices prompted the deal, and that “Nuance and Vlingo will combine their deep innovation and R&D expertise to deliver next-generation natural language interfaces across numerous markets and industries.”

Vlingo’s statement was much less detailed, noting that the transaction was subject to customary closing conditions, that it is expected to close in 2012, and that its purchase price is not being revealed. The startup also noted that it will operate as an independent company until the closing is complete. The Nuance press release quotes Vlingo CEO Dave Grannan as saying: “Vlingo and Nuance have long shared a similar vision for the power and global proliferation of mobile voice and language understanding. As a result of our complementary research and development efforts, our companies are stronger together than alone.”

In its September lawsuit against Nuance, Vlingo revealed the complicated relationship it shared with Nuance. The lawsuit alleged that at one point Nuance CEO Paul Ricci attempted to bribe three Vlingo executives by offering them $5 million each if they could convince their board of directors to sell to Nuance (which was already an investor in Vlingo). Despite all of it, Grannan mentioned that he wasn’t opposed to selling his startup to Nuance, but that they “don’t want to be forced into doing it at a low price based on these tactics that they use.”

When I spoke with Grannan back in the summer, right after Nuance accused Vlingo of false advertising based on statements Vlingo made on its website about its technology, he noted that the bigger company was using litigation as a business strategy. “They just want to get us into court to cost our startup time and money,” Grannan said.

Vlingo appeared to have gained some ground in August, though, when a federal jury in Boston found that Vlingo did not infringe on the Nuance ’295 patent, which covers the technique for making computerized transcriptions of a users’ speech more accurate over time using audio samples from multiple sessions. But it’s presumably been a costly road for Vlingo. Grannan hasn’t disclosed the startup’s exact legal expenses, but noted that each patent trial can run a company between $2 million and $3 million. And in 2010 Vlingo bought a crop of patents from Bellevue, WA-based Intellectual Ventures as aid in the patent litigation.

Both companies say that they are committing to innovating and taking a bigger share of the voice-driven virtual assistance space. It will be interesting to see whether the two companies are truly “stronger together,” given their bitter and embattled history.

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A federal judge in New York has largely rebuffed a request for summary judgment in a copyright infringement case that Capitol Records and its parent EMI Music Group filed in 2007 against MP3tunes, the San Diego-based provider of cloud-based music services.

MP3tunes founder Michael Robertson, who previously founded San Diego’s MP3.com (and became a pariah of the record industry), is claiming a 99 percent victory for cloud music and MP3tunes’ business model. In a more impartial account on PaidContent, reporter Joe Mullin agrees the ruling by William H. Pauley, a federal judge for the U.S. District in the Southern District of New York, has ramifications for cloud-music services launched by Apple (NASDAQ: AAPL), Google (NASDAQ: [[ticker]]), and Amazon (NASDAQ: AMZN). A copy of the ruling is available online here.

In his ruling yesterday, the judge writes that the case turns in large part on whether MP3tunes is eligible for protection under the safe harbors provision of the 1998 Digital Millennium Copyright Act (DMCA). The act establishes some rules that online music providers must follow to gain that safe harbor protection. The judge found that MP3tunes mostly complied with those rules by promptly responding to “takedown” notices sent by EMI record companies under the DMCA, and by deleting 153 accounts of the users who repeatedly infringed EMI’s copyrights by downloading copyright-protected songs.

But the judge says MP3tunes and Robertson, who also was personally named as defendant in the case, didn’t go far enough by going into its users’ online music storage “lockers” and actually delete the copyright-protected songs. As a result, MP3tunes and Robertson still could be found liable for infringing EMI copyrights on 171 specific songs that remained in users’ lockers following EMI’s takedown notices.

Michael Robertson

“Overall, it was an enormous victory for MP3tunes and digital music compatriots like Amazon, Google, and Grooveshark,” Robertson writes in his blog post. “It wasn’t a complete victory and it is not a final ruling because there are outstanding issues and both sides can appeal, but we’re prepared to continue battling for the last 1 percent.”

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Mountain View, CA-based Symantec (NASDAQ: SYMD), the company best known for the Norton AntiVirus software line for PCs, said today that it has agreed to acquire Clearwell Systems, a maker of archiving and e-discovery software for litigation support. Symantec will pay $390 million in the transaction, net of Clearwell’s $20 million in cash. Clearwell, which is also based in Mountain View, was founded in 2004; its investors included Sequoia Capital, Redpoint Ventures, Northgate Capital, and DAG Ventures.

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As examples of ultra-fast growth in the tech world, people like to talk about Groupon and Zynga. While they are phenomenal success stories, neither of those companies is publicly traded yet—nor, for that matter, are Twitter or Facebook. Well, how about a different kind of tech company that started in 2008 and held its IPO today?

That would be RPX, a San Francisco-based “defensive patent aggregation” company with Seattle roots, whose venture investors are in Boston, London, and the Bay Area. RPX filed for an initial public offering in January and says today it has raised $159.6 million in an offering underwritten by Goldman Sachs and Barclays Capital. The firm sold about 8.4 million shares at $19 per share, with trading to begin on the Nasdaq today. (Pricing above the anticipated range of $16-$18 was announced this morning.)

What’s remarkable is how fast a ride it has been for RPX (NASDAQ: RPXC) and its investors, which include Kleiner Perkins Caufield & Byers, Charles River Ventures, and Index Ventures. The patent rights firm was co-founded just under three years ago by John Amster and Geoff Barker, both former execs at Bellevue, WA-based Intellectual Ventures, the controversial invention and patent licensing company led by Nathan Myhrvold.

RPX’s approach is different from IV’s. As Amster told me last year, RPX focuses much more narrowly—on acquiring patents that its corporate customers pay for access to and can use for defensive purposes, to deter or beat back patent infringement lawsuits. Members pay a subscription fee—a fixed percentage of their operating budget, typically between tens of thousands and a few million dollars—to access the RPX portfolio. And RPX pledges not to sue anyone, unlike IV.

Here’s why RPX is so interesting financially. Its revenue tripled from about $33 million in 2009 to about $95 million in 2010. The firm has been profitable since 2009, with nearly $14 million in net income last year. What’s more, it has the potential for a billion-dollar market cap after its IPO. And its membership group has grown to 80-plus companies and now includes giants like Cisco, Google, Nokia, Samsung, Sony, Verizon, and Zynga.

It’s a simple proposition—to help companies lower their patent-litigation costs or avoid them altogether. And paying licensing or access fees seems to be getting more popular among … Next Page »

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We saw news of personnel shifts, litigation, clinical progress, financing, and acquisitions from health IT firms, device makers, and drug companies in New England this week.

—Waltham, MA-based Forerun, a developer of patient-charting software for emergency room doctors, raised $2 million in a Series C funding led by the Massachusetts Technology Development Corporation.

—GlaxoSmithKline (NSYE: GSK) announced Boston-based biotech entrepreneur and investor Christoph Westphal will leave his position at SR One, Glaxo’s venture arm. Westphal will focus on other businesses, including Longwood Founders Fund, the relatively new VC fund he founded with Rich Aldrich and Michelle Dipp, who will also leave her position at Glaxo. Both Dipp and Westphal came to Glaxo through the drug firm’s $720 million acquisition of Sirtris Pharmaceuticals in 2008, and both have agreed to stay in their positions until successors are lined up.

—Natick, MA-medical devices maker Boston Scientific (NASDAQ: BSX) paid $5.13 million upfront for acquiring Israel-based S.I. Therapies in November, the Israeli business news website Globes reported. Boston Scientific could pay a total of $24.3 million if S.I., a maker of catheter devices for treating artery blockages, hits certain milestones.

—Cubist Pharmaceuticals (NASDAQ: CBST) of Lexington, MA, announced it had settled patent litigation with Teva Pharmaceutical, surrounding the antibiotic daptomycin (Cubicin), Cubist’s only marketed drug. Teva will drop its claims that two patents on the drug were unenforceable, and in exchange, will get to market a generic version of Cubicin as early as December 24, 2017 under a licensing deal with Cubist, who will also be Teva’s supplier of the product for the U.S. market.

—Cambridge, MA-based RNA interference drug developer Alnylam Pharmaceuticals (NASDAQ: ALNY) said it filed a legal response and counterclaim against Canadian firm Tekmira Pharmaceuticals, which last month accused Alnylam of misappropriating trade secrets.

—My colleague Ryan wrote about the progress that a trio of Boston-area firms are making in developing their products. T2 Biosystems of Lexington said its magnetic biosensor diagnostic approach was able to identify five species of Candida infections from whole blood samples in less than two hours, much faster than the two days taken in existing approaches. Waltham-based On-Qi-ity said its developmental chip for diagnosing cancer was about twice as efficient as a clinically available chip in capturing tumor cells. Cambridge-based gene sequencing startup GnuBIO said it supplied the Montreal Heart Institute and the Broad Institute of MIT and Harvard with its first sequencing data and that it had raised an $8 million Series A round from angel investors in November.

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Lexington, MA-based Cubist Pharmaceuticals (NASDAQ:CBST) said late yesterday afternoon that it has settled patent litigation related to its only marketed drug, the antibiotic daptomycin (Cubicin), with Teva Pharmaceutical. The companies’ agreement enables Teva to market a generic version of the antibiotic in the U.S. as early as December 24, 2017 under a license from Cubist, which will also be Teva’s supplier of the product for the U.S. market. Teva has agreed to drop its prior claims that two patents on the Cubist drug were unenforceable. This agreement effectively clears a cloud that has been hanging over Cubist since February 2009, when the company announced that Teva had informed the company that it was pursuing approval of a generic version of its key antibiotic product years ahead of when patents on the drug were due to expire.

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A week after settling litigation related to the patents on gene-silencing treatments, Alnylam Pharmaceuticals and others have found themselves in another legal battle over the Tuschl patents related to RNA-interference treatments. This time the University of Utah has named Cambridge, MA-based Alnylam (NASDAQ:ALNY), Max Planck, the Whitehead Institute for Biomedical Research, MIT, and the University of Massachusetts in a civil complaint filed in federal court in Massachusetts on Tuesday, Alnylam said in a regulatory filing.

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Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ:ALNY) has been working with Tekmira Pharmaceuticals (TSE:TKM) of Vancouver, BC, since at least 2006 on getting its gene-silencing drugs into cells to treat diseases. But the partnership has gone sour. Tekmira has filed a lawsuit that is seeking what could amount to more than $1 billion from Alnylam.

Alnylam, founded in 2002, has been a leader in technology that uses RNA molecules to silence certain disease-related genes. While these drugs hold promise because of their ability to specifically target genes in ways other drugs can’t, the new RNA medicines require special help so they can be effectively delivered to the right place in cells. Alnylam has relied heavily on partners such as Tekmira, which has developed particles to carry gene-silencing compounds in the bloodstream and deliver them to the desired cells. Tekmira, for example, provides the carrier particles (a.k.a lipid nanoparticles) that Alnylam uses for its key experimental drugs for liver cancer (ALN-VSP) and TTR-mediated amyloidosis (ALN-TTR). Tekmira has received more than $45 million in funding from Alnylam through the companies’ partnership activities, and Tekmira stands to gain more money from Alnylam’s potential sales of drugs that use Tekmira’s technology, according to the companies.

Alnylam has filed patents on new carrier particles for RNAi drugs, listing Alnylam scientists as the inventors, according to Alan Carr, a biotech analyst at Needham & Company, who covers Alnylam’s stock. Presumably, if these patents are awarded, Alnylam wouldn’t have to pay Tekmira to develop drugs with particles invented by Alnylam scientists. Yet in its complaint filed this week in the Business Litigation Session of the Massachusetts Superior Court, Tekmira “alleges that Alnylam is claiming … that Alnylam has developed novel siRNA delivery formulations and lipids that can be obtained from Alnylam instead of Tekmira. Tekmira … alleges… that these purported Alnylam formulations and lipids are actually based on, and in whole or in part developed from Tekmira’s technology.”

“It comes down to inventorship on some patent applications filed by Alnylam,” Carr said. “And Tekmira believes that they contributed to it and that they should have at least partial ownership of it.”

Tekmira announced its litigation against Alnylam after the close of the market on Wednesday. At the close of the mark on Thursday, Tekmira’s shares were down about 10 percent to $3.96 and Alnylam’s shares fell almost 3 percent percent to $9.86. Tekmira has a lot at stake in this case, given how much of its future revenue depends on income from its drug-delivery technology through partners like Alnylam. In addition to Tekmira, Alnylam has worked on methods of delivering its gene-silencing treatments with AlCana Technologies, The University of British Columbia, and MIT.

Come back to Xconomy for my colleague Luke Timmerman’s upcoming interview with Alnylam chief executive John Maraganore about this litigation involving Tekmira. Also, here’s Luke’s previous report about this litigation from earlier this week. Tekmira’s complaint can be downloaded from this page on its website.

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[Updated 3/15/11, 2:28 pm ET. See note below] Litigation concerning key patents involved in the development gene-silencing drugs known as RNA-interference therapies has been settled. Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ:ALNY), a developer of RNAi therapies, said today that the firm and all others involved in the lawsuit over certain rights to the Tuschl I and Tuschl II families of patents have reached an agreement.

The litigation began in June 2009 and was set for trial this month in federal court in Boston. It involved several major players in the field of RNAi—which offers the promise of turning off disease-related genes to treat illnesses such as cancer—including Alnylam, Max Planck Society, the University of Massachusetts, and the Whitehead Institute for Biomedical Research. Now all those groups, including MIT, a former party to the litigation, have reached a deal that clarifies the rights to the key patents.

The groups have agreed to give Germany’s Max Planck, which has for years made Alnylam its exclusive licensee of the Tuschl II patent family, the lead role in coordinating the prosecution of the Tuschl I and Tuschl II family of patents in the U.S. Max Planck is also continuing this lead role in prosecuting the Tuschl II patents in markets outside the U.S. The University of Massachusetts will now lead prosecution of the Tuschl I patents outside of the U.S., and Alnylam has agreed to grant UMass permission to sublicense the U.S. Tuschl II patents to the U.S. drug giant Merck (NYSE:MRK) under certain limitations in return for a portion of sublicensing revenue, according to the firm’s press release.

“It’s good for Alnylam to have it out of the way,” Alan Carr, a biotech analyst for Needham & Company, said this morning. “I think that with Max Planck managing most of the patent prosecution, that is going to be a positive thing” for Alnylam.

Alnylam, which is at various stages of developing RNAi treatments for respiratory syncytial virus, liver cancers, and Huntington’s disease, has always regarded the Tuschl II patent family as important to its intellectual property position. The company, founded in 2002, has no products on the market and has brought in millions of dollars in revenue over the years from licensing and partnership deals with major drugmakers such as Novartis, Roche, and Takeda.

“Today’s settlement provides for a favorable resolution of this dispute for all parties and significantly optimizes the successful prosecution of both the Tuschl I and Tuschl II patent families, which together represent critical innovations for the advancement of RNAi therapeutics as breakthrough medicines,” said John Maraganore, CEO of Alnylam, in a statement.

Barry Greene, Alnylam’s chief operating officer, said in an interview this afternoon that the fact that the settlement gives Max Planck a lead role in prosecuting the U.S. Tuschl I and Tuschl II patent families is a win for Alnylam. “We’ve maintained all along that Alnylam intellectual property was required by all involved in the development and commercialization of RNAi therapeutics,” he said. “Today’s settlement further strengthens that belief.”

My colleague Luke Timmerman interviewed Maraganore in December after Roche’s decision to end its RNAi research programs and Novartis‘s earlier decision not to extend its collaboration with Alnylam, which triggering layoffs of 25-30 percent of Alnylam’s work force in September.

[Commentary from Alnylam COO Barry Greene was added to the original version of this story.]

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When it comes to mobile software and devices these days, it’s all about location, location, location. And if you’re a small, leading-edge company in the sector—if you’ve played a pioneering role in bringing location-based technologies to market, and millions of devices use your software—well, you’d better watch your back.

That’s my take upon hearing the latest news from Boston-based Skyhook Wireless, the geo-location software firm. Yesterday, after a tumultuous few days in which the company acknowledged that Apple is no longer using Skyhook’s location-aware software in its new iPhones (since April) or the iPad, Skyhook announced it has been granted four new U.S. patents in Wi-Fi location and positioning technology.

It’s an interesting juxtaposition of events. On one hand, Apple is one of Skyhook’s biggest and most prominent customers. When Steve Jobs announced on stage at MacWorld in January 2008 that Skyhook’s technology would be part of a big iPhone software upgrade, Skyhook founder and CEO Ted Morgan called it “probably the biggest publicity event any company can have.” So it’s surely a serious blow to be dropped from these hot new devices. Apple apparently has its own Wi-Fi location information, presumably culled from the daily movements of iPhones around the country, that it thinks is good enough for its own devices. On the other hand, Skyhook is projecting confidence in its core technologies and, in any case, seems to be digging in for a fight to supply these technologies to more and more mobile manufacturers.

Following various media reports from TechCrunch (which first reported on the Apple and Skyhook angle last week), the Wall Street Journal, and other media outlets, I wanted to hear what Skyhook had to say about the current situation, and about the evolving competition in location-based services—and how it affects Skyhook’s strategy. (All of this originally came about in response to a query about privacy made to Apple from a pair of U.S. congressmen, one from Massachusetts.)

First, some more background. Skyhook has been a darling of the Boston-area mobile software scene for a few years now. Its software determines a mobile device’s precise location based on the identities and locations of nearby Wi-Fi networks, and information from GPS satellites and cellular networks. The core technology is deployed on mobile devices made by Samsung, Motorola (Android phones), Dell, Qualcomm, and Texas Instruments, among others—including Apple’s iPhone and iPod Touch from 2008 until just this spring.

Meanwhile, Skyhook’s intellectual property—which now comprises 15 granted patents and 37 pending applications—falls into three main categories: building a Wi-Fi database for location, maintaining that data (which is challenging because Wi-Fi access points move around), and ensuring the highest accuracy possible through proprietary algorithms.

“We were the first ones to do all this,” says Skyhook’s Morgan. “The downside of being early is you have to wait seven years for stuff to come to market.”

And, as many tech pioneers have found out the hard way, being early isn’t necessarily … Next Page »

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Intellectual property battles are a perennial hot-button topic in the tech world. Recently we’ve been hearing a lot about so-called “patent trolls,” companies that don’t produce goods or services but rather acquire patents and then try to extract licensing fees from firms they say are infringing on those patents. Most of these disputes involve lawsuits, and an increasing percentage of all patent litigation cases involve patent trolls—roughly 15 percent, according to some sources.

John Amster and his company, San Francisco-based RPX, are trying to do something about this. First, some background. Before co-founding RPX in 2008, Amster spent three years at Intellectual Ventures, the Bellevue, WA-based invention firm led by former Microsoft chief technology officer Nathan Myhrvold. Amster was IV’s general manager of strategic acquisitions and vice president of licensing, based in San Francisco.

Amster started RPX together with co-CEO Geoffrey Barker, another former Intellectual Ventures vice president of licensing, and Eran Zur, the firm’s president. RPX is focused on “defensive patent aggregation.” It buys up patents across a wide range of tech areas, including consumer electronics, mobile handsets, telecommunications, software, Internet, and e-commerce, and charges companies for access to the intellectual property. The idea is to take those patents out of the arsenal of patent trolls, and grant tech companies licenses to the IP stockpile so they can defend themselves more efficiently. Companies pay RPX an annual fee ranging from $40,000 to $5 million, depending on their size.

RPX has been on a tear lately, signing up big customers like Cisco Systems, IBM, Intel, Microsoft, Hewlett-Packard, Nokia, Sony, Samsung, LG, and HTC. A couple of weeks ago, the company announced it has added Dell and Acer to its list of “members,” which now includes 42 firms. So far, it has spent more than $200 million to acquire more than 1,300 patents. RPX is venture backed by Kleiner Perkins Caufield & Byers, Charles River Ventures, and Index Ventures. The company has 40-some employees—three in the Seattle area (including co-CEO Barker)—and it is actively hiring.

Some observers have called RPX a competitor to Intellectual Ventures, but Amster challenges that premise. “We’re completely different. We have two very different visions and goals,” he says. “[Intellectual Ventures] has raised a vast amount of money and has a very diverse set of businesses, from early-stage invention all the way through patents. It’s a totally different business-model vision. They’re a private equity fund for invention. The patent piece is small.”

I recently spoke with Amster by phone to hear about RPX’s progress against patent trolls, and to get his thoughts on where the marketplace for intellectual property is headed. To me, it’s really interesting that defensive “protection” companies are sprouting up to serve the tech community—and where is the line between defensive firms and the trolls?

Here are Amster’s responses to three of my questions, edited for length and context:

Xconomy: Tell me about your vision for RPX and how it’s unique in the world of technology and IP.

John Amster: The basic idea was looking at this problem of patent trolls, or non-practicing entities (NPEs). The difference between [the terms] “patent troll” and “NPE” is important. Why has this thing been phrased as a negative thing? Why is it pejorative? The philosophical view of a lot of companies is that something’s wrong with that. That’s not really true though—at the end of the day, patents are … Next Page »

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The remaining assets of San Diego’s Veoh Network, which shut down in February after years of litigation with Universal Music Group, have been sold to Los Angeles-based social video startup 2Peer, according to a report today in VentureWire. Veoh had raised some $70 million from Boston-based Spark Capital as well as Goldman Sachs, Time Warner, Intel Capital, and former Disney CEO Michael Eisner.

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San Diego-based Sequenom (NASDAQ: SQNM) is entering a critical phase in its management of the corporate crisis that erupted in its laboratories last year. It’s stepping back into the spotlight.

As a public company, Sequenom doesn’t have much choice. The maker of genetic diagnostic equipment and supplies says in its latest annual report that as of Dec. 31, it has an accumulated deficit of $597.3 million and available cash of $42.7 million. That means, as Sequenom chairman and CEO Harry Hixson told investors and analysts Monday, the company needs to secure additional financing this year.

Sequenom has been in its bunker since last April 29, after announcing a delay in the long-expected launch of its flagship test—a non-invasive genetic test for Down syndrome—due to “employee mishandling of R&D test data and results.” A subsequent internal investigation prompted a special committee formed by Sequenom’s board to fire CEO Harry Stylli, senior vice-president of R&D Elizabeth Dragon, and three other employees. The CFO and another executive resigned.

After several months of additional corporate governance cleanup, including tighter R&D controls and the appointment of two new scientific advisers and two independent directors, Hixson apparently decided Sequenom is ready to come out of the bunker and begin talking again. Hixson is scheduled to make a 30-minute presentation this morning at Roth Capital’s 22nd Annual Growth Stock Conference, which is being held at the Ritz Carlton in Dana Point, CA. Next week, he is set to make an appearance at the Barclays Capital 2010 Global Healthcare Conference in Miami, FL.

But Sequenom has yet to explain the what, why, or how certain employees mishandled its R&D data—and what consequences, if any, resulted. Remember, the mishandled R&D data were intended to … Next Page »

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Intellectual Ventures has been making a lot of waves lately. Today the Bellevue, WA-based firm, focused on the business of invention and patents, laid out its arguments for creating a new industry of “invention capital,” in a Harvard Business Review article penned by CEO and co-founder, Nathan Myhrvold. In a separate piece, the New York Times’ Steve Lohr addresses some longstanding questions from Myhrvold’s detractors, who call him a patent troll (more on this below).

In the HBR article, Myhrvold, who is coming off his talk at the TED conference in Long Beach, CA, presents the thinking behind his firm’s efforts to establish a separate marketplace for inventions, loosely following the models of venture capital and private equity. He also gives a status update on where Intellectual Ventures stands, and the formidable challenges it faces.

Invention capital is really the big vision of the company—with patent acquisitions as part of its overall strategy—and it’s fascinating to see how much things have progressed since the summer of 2008, when Myhrvold first spoke with me about it. Back then, the discussion was heavy on the historical context and the need for a new system to nurture inventions and inventors. In terms of results, it was largely wait and see. Now, it’s clear the company’s efforts worldwide are starting to pay off.

Myhrvold writes that Intellectual Ventures has 30,000-plus patents in its portfolios, most of them purchased. To critics who would say the company doesn’t invent anything itself, he notes that its 30 staff inventors and 100-plus consultants applied for 450 in-house patents in 2009, placing it in the world’s top 50 filers (ahead of Boeing, Johnson & Johnson, 3M, Mitsubishi, and Toyota); and that its wider network of 1,000-plus inventors in seven countries applied for more than 1,000 patents last year.

On the technology licensing and patent acquisitions front, he writes that Intellectual Ventures has made deals with more than a hundred Fortune 500 companies and their international equivalents, and that the firm’s “licensing activity has so far earned more than $1 billion.” To put that figure in perspective, Intellectual Ventures has raised some $5 billion from mostly undisclosed large investors (Microsoft is one).

In the Times piece, Lohr quotes critics who call Myhrvold’s outfit “Intellectual Vultures” and say the company uses its huge patent trove as leverage to extract hefty licensing fees. These critics also question Myhrvold’s penchant for setting up hundreds of shell companies and affiliated entities; by masking who actually owns Intellectual Ventures’ patents, this strategy reportedly makes it more difficult for other companies to know where they stand in negotiations with Myhrvold’s firm. Myhrvold is unapologetic about these tactics in the Times article, saying he’ll give up secrecy as soon as everybody else does.

But regardless of what his critics say, Myhrvold has clearly thought a lot about the hurdles that must be overcome in order for new markets ruled by inventors to take off. Here are three of his main ones:

—Managing risk. Myhrvold points out that insurance companies, pension funds, and mutual funds have figured out strategies to deal with this, and that the money it takes is comparable to VC … Next Page »

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TEDMED had Martha, Goldie, and other celebrity speakers, but San Diego-based Amylin Pharmaceuticals broke this week’s big news when it signed up a big Japanese partner to develop its line of obesity drugs. It’s all part of your regular dose of San Diego biotech news, and it’s ready now:

—Amylin Pharmaceuticals, the San Diego-based diabetes drug specialist, announced that it has formed a partnership with Japan’s Takeda Pharmaceuticals, which agreed to carry most of the development costs for Amylin’s weight-loss drugs. In return, Takeda gets a worldwide exclusive license to eventually commercialize Amylin’s experimental obesity drugs, including the combination of pramlintide and metreleptin, and davalintide.

—After a five-year hiatus, TEDMED founder Richard Saul Wurman, and president, Marc Hodosh (who also is an Xconomist), brought the conference on medical technology, entertainment and design to San Diego’s Hotel del Coronado. TEDMED announced during the conference, which included presentations by Boston Scientific co-founder (and Xconomist) John Abele, Martha Stewart, and Goldie Hawn, that the conference will return to the same location next October.

—I only had time to attend a fraction of the presentations at TEDMED last week. One of my favorites talks, though, was delivered by Bill Davenhall, who leads the health and human services marketing team at ESRI, the Redlands, CA, giant in geographic information systems. Davenhall talked about the importance of including patients’ “place histories” as part of their medical records and raised an interesting question: Will the electronic health record systems being created today have the capability to add data in new categories—such as “geo-medicine”–that aren’t typically included in today’s patient records?

—New York-based Xenomics filed a lawsuit against San Diego-based Sequenom that alleges Sequenom misrepresented the progress in its development of a prenatal test for Downs syndrome. Xenomix says it would not have licensed its patents to Sequenom had it known the truth.

—Denise profiled San Diego-based Sirigen, an early stage medical diagnostic company that is developing technology that uses light-emitting polymers to detect bits of DNA. Sirigen founder Brent Gaylord developed the technology at UC Santa Barbara, extending the significance of UCSB physicist and Nobel laureate Alan Heeger’s discovery of conductive polymers.

—The FDA told San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN) and its partner Eli Lilly the companies can now market exenatide (Byetta) as a frontline, standalone therapy for diabetes. The drug was previously approved for use with other drugs, or as a fallback option when other tretments failed.

—Vertex (NASDAQ: VRTX), the Cambridge, MA, biotech with operations in San Diego, said the latest trial of its telaprevir treatment for hepatitis C was able to attain the clinical definition of a cure in more than 80 percent of patients who got the drug. The finding is part of the mounting evidence Vertex is gathering on its quest to develop the first-of-its-kind protease inhibitor for the chronic liver disease.

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Xenomics, a New York-based developer of molecular diagnostic technologies, says it has filed a suit in New York state court alleging that San Diego’s Sequenom fraudulently misrepresented the status of its prenatal Down syndrome test. Xenomics alleges the fraud induced them to exclusively license valuable patent rights to Sequenom.

According to a licensing agreement announced last October, Xenomics granted Sequenom (NASDAQ: SQMN) a worldwide license to its patents for development of prenatal and diagnostic products in return for an upfront payment of $1 million and royalties on sales. Xenomics also granted Sequenom negotiation rights to use its patents in cancer-related products. Xenomics, which trades on the pink sheets under the symbol XNOM.PNK, says is seeking compensatory and punitive damages not to exceed $300 million, and the termination of the license between the companies. A Sequenom representative declined to comment on the litigation.

The suit adds to the mounting problems facing Sequenom, which stunned investors last April 29 with an announcement that the launch of the prenatal Down syndrome test would be delayed because scientific data had been mishandled. The company’s shares lost 76 percent of their value in trading the next day and have drifted downward since. The disclosure was a shock because just six days earlier – on April 23 – the company said the Down syndrome test was on track for a June launch. The SEC has opened an investigation to the company’s mishandling of its data and the Justice Department also is asking questions. In addition, the SEC told Sequenom it wants information on another matter: Sequenom’s offer to acquire Exact Sciences in January 2009. Sequenom dropped a hostile bid for the Marlborough, MA-based company after Exact Sciences, acting to save itself, sold some assets to Genzyme. Sequenom has said it is cooperating with authorities.

Last month, Sequenom ousted CEO Harry Stylli and R&D senior vice president Elizabeth Dragon after an internal investigation. CFO Paul Hawran resigned, as did another officer who wasn’t identified. Three employees also were terminated. Each of the officers has denied wrongdoing. The company still has not given an accounting of what happened.

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Hopkinton, MA-based EMC (NYSE: EMC) announced today it has agreed to buy Kazeon Systems, a Mountain View, CA, maker of “eDiscovery” software for litigation support inside large corporations and law firms. EMC said Kazeon will become part of its Content Management and Archiving business unit, and that Kazeon’s technology will complement the company’s existing line of SourceOne eDiscovery tools. The terms of the deal weren’t disclosed.

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It’s a rare event for EMC, the Hopkinton, MA-based storage and information management giant that has been on an acquisition spree over the last few years, to launch a new product line in-house. But that’s what’s happening this week as EMC rolls out “SourceOne,” a new family of software products designed to help companies prepare for, and minimize the costs of, legal cases that may require them to produce corporate documents such as e-mails.

When companies get hauled into court, new federal rules put into place in 2006 mean they have to be ready to hand over stored e-mail and instant messages as part of the discovery process. If they haven’t been archiving this information systematically before a discovery request hits, it can be extremely costly to comply fast enough to meet court deadlines. Market research firm Gartner reported last year that paying lawyers to sift through e-mail files for relevant messages costs an average of $18,750 per gigabyte.

SourceOne is designed to drastically reduce those costs. It consists, at launch, of two components. The first is an e-mail management program that works with corporate e-mail server systems such as Microsoft Exchange and IBM Lotus Notes/Domino to create a definitive archive of e-mails and instant messages. The system not only makes sure that all of a company’s e-mails are in one searchable location, but decreases storage needs by getting rid of duplicate data. The SourceOne e-mail management product is designed as a next-generation replacement for EMC’s EmailXtender product, which EMC inherited when it acquired Legato Systems in 2003, according to Kelly Ferguson, a senior product marketing manager at EMC.

The second component is the SourceOne Discovery Manager, which is specialized for searching large volumes of e-mail and isolating the subset of documents that must be handed over to outside counsel in legal cases. “A company might have a million messages that fit the date range or subject” for a given case, says Ferguson. “Discovery Manager will narrow that down so that only what is relevant is held in a secure ‘legal hold’ folder.” The system complies with the Electronic Discovery Reference Model (EDRM), a set of e-discovery guidelines set up several years ago by a group of roughly 100 software vendors and consulting firms, including EMC.

Later this quarter, EMC plans to add a third component to the SourceOne family, the Discovery Collector, which will quickly scour a company’s larger information … Next Page »

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Qualcomm says the U.S. Court of Appeals in Washington D.C. has vacated a finding by the International Trade Commission that the San Diego wireless company induced other companies to infringe a Broadcom patent that helps reduce power consumption. The case is among several patent disputes between the two companies. A San Diego Union-Tribune report on the ruling says a 2006 U.S. Supreme Court decision has changed the standard for determining if patent infringement was induced.

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