Bankrupt Commerce One fetches $15.5 million for prized patents
SAN FRANCISCO — Bankrupt Internet software maker Commerce One Inc. auctioned off dozens of prized online patents for $15.5 million in a sale that could provoke a legal scuffle over whether the new owner is entitled to collect royalties from a long list of technology heavyweights.
A secretive company called JGR Acquisition Inc. wrested the patents from two other bidders with ties to former Microsoft Corp. chief technology officer Nathan Mhyrvold, who is now running a startup that hopes to accumulate a treasure chest of valuable patents.
JRG attorney Mark Mullion of the Dallas law firm Haynes and Boone declined to discuss the company or its plans for the patents sold in a liquidation of Commerce One, a former dot-com darling that collapsed into bankruptcy two months ago.
The bidding war highlights the rising value of intellectual property rights as the world becomes more dependent on computers.
The wrangling involved obscure patents covering a wide range of administrative tasks conducted online throughout corporate America.
Commerce One, now based in Santa Clara, patented a series of techniques that are widely used by big and small companies to pay bills and buy supplies online. Hoping to build a bustling marketplace for its own software products, Commerce One allowed companies to use the patents without paying royalties. Although the strategy didn’t pay off, many companies took advantage of the royalty waiver to shift more of their operations online.
Those who might be targeted for royalty claims under the patents include Microsoft, IBM Corp. and other tech icons, as well as smaller companies, according to one intellectual property group.
The group, the Electronic Frontier Foundation, intends to contest any attempt to collect royalties from the Commerce One patents, arguing that the company previously promised not to seek payments for using the technology in question.
The auction represented a small measure of redemption for Commerce One, which experienced one of the most mortifying meltdowns in the dot-com bust. The company once boasted a market value of $20 billion, but lost its luster as it sank into a morass of uninterrupted losses.