October 27, 2006 10:27 AM PDT
Hendrix recordings fetch $15M in patent auction
A catalog of Hendrix studio recordings purportedly owned by the estate of a former manager fetched $15 million at an auction of intellectual property held by Ocean Tomo in New York on Thursday. The catalog went to an anonymous bidder.
The recording catalog accounted for the majority of the $21.7 million worth of deals at the two-day event. Another notable purchase was a video-on-demand patent dating back to 1989, which went for $900,000. Many patents and lots of intellectual property offered up for bids, however, did not get sold. Other Hendrix recordings offered at the auction failed to generate bids that met the minimum.
Still, the total amount of sales stemming from the auction could grow. In the first Ocean Tomo auction, held in San Francisco last April, less than one-third of the patents were bought during the auction itself, with sales totaling about $3 million. However, bidders and sellers sat down later and hammered out deals. Eventually, 31 patent portfolios stemming from the auction got sold for $8.4 million.
The anonymous bidder will not likely remain anonymous for long. Hendrix's family has challenged the ownership of the recording and litigation is likely to follow.
Ocean Tomo, which is part-owned by Texas billionaire Ross Perot, evaluates patents and helps people sell them. Establishing a value for intellectual property, and particularly patents, is notoriously difficult and the firm believes that auctions will help solve that problem by making it easier to buy and sell intellectual property.
Critics allege that auctions give potential litigants an opportunity to buy patents and then sue others. Many in the intellectual-property business, however, say the opposite is more common: Big conglomerates use auctions as buying opportunities to take potentially dangerous intellectual property off the market.
Small inventors also say patents represent a way to get a return on their inventions; landing a licensing deal with large companies can involve several years of fruitless negotiations, some small inventors have complained. Those who sold patents during the first auction said they were glad to be able to sell them.
Patent auctions have taken place for years, but they have nearly always been confined to a few patents from a single company. Ocean Tomo differs in that it has patents from a fairly wide variety of companies that apply to different fields at its auctions. Additionally, it has expanded from selling just patents to trademarks, copyrights, and other intellectual property.
For theatricality, the company holds a pre-auction banquet and hires Charles Ross, the auctioneer who appears on the British version of "Antiques Roadshow," to serve as the auction master of ceremonies.