One of the four covenants Round Rock offered was sold, and bids were placed on the others, which proves the industry does not only see this as some kind of joke, but rather an interesting alternative of how to conduct their business in the future.

The result should be considered a great success, according to Patrick Anderson, who writes after the auction:
“While comparing a patent auction to earth-changing events might, in itself, seem overly dramatic, consider the amount of money wasted on literally thousands of lawsuits each year that typically end in the same type of agreement that could have been purchased today, in a matter of minutes, not years … and with the cost of a few transactional lawyers, not dozens of high-priced litigators… So, no, I don’t think the significance of today’s events are capable of overstatement.”

Read more on http://gametimeip.com/2011/03/31/patent-litigation-experiences-k-t-event/

The practice of accepting a lump sum fee in exchange for a Covenant Not To Sue is not really new in the patent world. Functionally, they’re starting to get treated the same as licenses in many respects. However, the ICAP Ocean Tomo/Round Rock auction is the first I’ve ever heard of just openly inviting offers from the highest bidder for this type of an agreement.

I suspect Round Rock sees this as a “no-lose” situation … if the bids are low, they can easily explain it away due to a lot of the considerations mentioned by Joff Wild and myself. If the bids are high, they can try and use them as data points in their existing litigation.

In the end, I really don’t know whether this was Desmaris’ idea, or ICAP’s… I suspect that ICAP’s primary interest is in showing that they’re being “innovative” in bringing “new” IP products to the transactional market.

Personally, the idea of auctioning a CNS may well be “original,” but so is the idea of riding a Great Dane mounted backwards on a camel through the Amazon river … but neither is necessarily a great idea.

Crowdsourcing is indeed an interesting topic-of-discussion. The biotech industry is certainly embracing this development and will most definitely ‘surf this wave’ also in the future. Inspired by your post, I posted a new blog post on Intangitopia on the same subject but with a focus on the biomedical development.

Some of the challenges (besides the obvious question in regards to IP ownership) are of course the same as in “traditional” open innovation. Such as: how do you bridge the gap between private companies that want to maintain secrecy and academic/public institutions that want to maximize knowledge dissemination? And perhaps more importantly, how do we harness the power of global brains to ensure benefits for those in poorer economies?

When we can answer those questions, we may have the tools at our disposal to create the New Wealth of Nations!

Best regards,
Tobias Thornblad