Mac Leckrone is an intellectual property expert at Technology Partners Limited, generally known as the TPL Group, a technology development and licensing firm in Cupertino, Calif. His deal-making acumen made headlines last year when TPL started cashing in on its ownership of patents to technologies that figure in almost every microprocessor manufactured in the past decade. The asset has proved spectacularly lucrative for TPL and Patriot Scientific Corp., in Carlsbad, Calif. The companies are equal owners in a joint venture that combines their interests in a series of microprocessor patents known as the Moore Microprocessor Patent (MMP) Portfolio, named after the inventor Charles Moore. In 2006, the TPL Group sold licenses to Agilent Technologies, Casio Computer, Fujitsu, HP, Kenwood, Lexmark International, Nikon, Olympus, Pentax, Seiko Epson, and Sony, and earlier this year they added Funai Electric and NEC.
IEEE Spectrum: How did you first become involved with Charles Moore?
LECKRONE: Chuck Moore and TPL got acquainted in the late 1980s. Moore wanted an environment where individual inventors would ultimately end up with ownership and control over what they had done, so TPL’s function was to protect the fruits of their research.
Why did the patent portfolio have divided ownership in the first place, and how did Patriot and TPL come to a joint ownership agreement?
After the early work in the 1980s, some of the inventors went their separate ways, taking their interests with them, and some of those interests eventually came to be owned by Patriot Scientific. It was clear that TPL couldn’t run a licensing program the way it would want to with divided ownership, so we spent a tremendous amount of energy and time negotiating to bring the interests back together.
What are the most important technologies in the portfolio? How are they integral to the products that major electronics firms are manufacturing?
The 20 000-foot view is that these technologies produce higher performance, lower cost, and lower power consumption microprocessors, so they solve problems that everyone wants to solve. The U.S. 5809336 patent, for instance, is an on-chip CPU clock and an independent input/output clock, which allows the CPU to be as great as it can be without being shackled by low input/output speed limits. The U.S. 5784584 patent allows chips to fetch multiple instructions in a single clock cycle, which reduces power consumption and processing time. Technologies like these have become the basis of the way microprocessors are designed today. Virtually every device that contains a microprocessor uses these technologies—from the mouse that is sitting a foot away from you, to the computer that’s telling me I have e-mail, to the ventilation system that’s pushing in the air I breathe.
What is your overall licensing strategy—how did you successfully negotiate licensing agreements with marquee companies like Intel and Advanced Micro Devices?
Traditionally, licensing has been a business that’s handled by lawyers and handled contentiously—you sue your prospective licensees, and that’s how you get them to come to the table. From a business point of view, that’s wasteful and not very effective, so we do what we can to change that equation. We devote a tremendous amount of resources to providing our customers with technical data that demonstrates that our technology is being used widely across their product lines. We don’t put them in a position of having to take our word for it—we do detailed analytical work comparing the claims of the patent to the inside of their product. We also have a dedicated team of people that respond to their questions in writing, immediately. The portfolio licenses are not inexpensive, so it’s not a small decision to make. These companies want to make sure they’re making the right decision, and we want to do everything we can to assist them.
Another part of our strategy is to create motivation through a tiered pricing structure—early licensees pay less than later licensees. The companies that can get through the decision-making process in a relatively entrepreneurial and unbureaucratic way will realize the fruits of being first or second or third, but not tenth. We always say, ”By not purchasing a license, you’re making a decision that the higher price is okay with you.” That’s not a threat. It’s just a reality. We just don’t want there to be any surprises in the future.
The individual corporate culture plays a big role in whether companies decide to avail themselves of being an early entrant, or to wait until there are 100 licensees. You see a huge company like Fujitsu or HP making an excellent early decision, and then you’ll see others not doing so. Some companies have the idea that getting ahead of the curve is the way to go. But we also respect a company’s decision to evaluate, and then to wait—or not to act at all. We can only hope that the senior management and the shareholders understand the impact of those kinds of decisions.
Licensors are often portrayed as bad guys in the world of innovation. Is that reputation justified?
It’s almost become a naughty word to be labeled as a licensor, but what the patent system is really all about is creating a world that enables the little guy, the inventor, to protect his work and fund continued development. In the late 1980s, Chuck and the TPL Group made large investments and took substantial risks, and now we’re plowing the return on that investment right back into his latest developments. It’s frankly disturbing to hear people denigrating the efforts of the individual inventor—there have been many irresponsible remarks made by people who ought to know better.
What’s ahead for the TPL/Patriot partnership?
The MMP Portfolio licensing program has, I think, proved its mettle. We expect a lot of licensees to come on board this year, because they see the issues. And then there’s a certain crowd that will just wait, and they’ll pay a lot more. We’re looking forward to that because at the end of the day, what we’re doing is funding an array of product development. That’s our cycle of success.