Newport Beach’s Acacia Research Corp. has grown as it’s moved from serving small customers to big ones in the past few years.
The company makes money by acquiring patents, striking licensing deals and collecting a cut of royalties from companies that appear to be infringing on them.
Acacia started out offering patent enforcement services to small companies, medical research groups, hospitals and universities for a fee.
These days it’s seeing large technology, biotechnology and other patent-heavy companies sign on for its services.
“In the past nine months we have seen a huge increase in partnerships with large organizations,” said Rob Stewart, senior vice president of corporate finance at Acacia.
Stewart declined to name customers. Acacia now counts “a large Fortune 50 company, “a very large consumer electronics company” and the “third largest semiconductor company” among them, he said.
Acacia Research came in at No. 4 on the Business Journal’s 2010 list of the fastest-growing public companies in Orange County.
The company posted 141% revenue growth for the three years through June 30.
Acacia mostly works with smaller companies to buy their patents and then searches for those it suspects of infringing on them for potential licensing deals or lawsuits.
When it finds a company suspected to be infringing on a patent, it tries to strike a licensing deal, or sues. It makes money by splitting the proceeds with the patent holder.
As of June 30, Acacia tallied some 870 licensing agreements for more than 75 different technologies, according to the company’s financial reports.
In the past few months, the company has struck licensing deals with IBM Corp., Seagate Technology LLC, Philips Electron-ics NV and Yelp Inc.
Since Acacia doesn’t make any products and licenses technologies it doesn’t design, it is known in tech and legal circles as a “nonpracticing entity.”
Critics peg the company as a “patent troll,” or someone who uses patent law to shake down unsuspecting companies.
Some large corporations come to Acacia to strike licensing pacts for the company’s entire patent portfolio as a sort of preventative measure to avoid being sued.
Acacia got its start as a venture capital firm based in Pasadena in the late 1990s. It got into the patent licensing business through one of the companies it invested in.
Acacia moved to Newport Beach in 2001, officially kicking off its licensing business.
