Irvine’s Uniloc USA Inc., a maker of security software that last year won a massive settlement from Microsoft Corp., has split off its sales and marketing unit.
Uniloc’s BlueCava Inc. made its debut this month with a veteran entrepreneur at the helm and a new sales strategy.
“I joined specifically to create a new operating division of the company,” said David Norris, chairman and chief executive of BlueCava. “We have taken the salespeople, technology and customers and spun them out.”
BlueCava now handles sales of Uniloc’s software. Uniloc itself now is focused on research and development and overseeing patents.
“At this point, Uniloc has more than 100 patents in its portfolio and continues to grow,” Norris said. “BlueCava gets the benefit of having a parent company with a broad set of intellectual property.”
Uniloc, which has yearly sales of about $100 million and some 30 workers, is the biggest shareholder in BlueCava. The unit’s managers also own part of the business.
For now, BlueCava shares Uniloc’s building near John Wayne Airport. It’s looking for office space in Irvine, Costa Mesa and neighboring cities, according to Norris.
BlueCava has plans for some 50 workers this year and to grow to 100 next year, he said.
Splitting off Uniloc’s products and rebranding the business could be a strategic move for Uniloc.
Most people know Uniloc as the company that beat software kingpin Microsoft in court.
Last year, Uniloc won a six-year patent infringement lawsuit and saw a $388 million jury award against Microsoft.
Uniloc accused Microsoft of infringing on a patent for software that ties programs to a specific computer to prevent copying on other PCs.
The company claimed Microsoft used Uniloc’s “physical device recognition” software—which distinguishes a computer from millions of others out there—to prevent copying of its Windows XP operating system and Office suite.
The win brought a lot of attention to low-profile Uniloc, which got billed as a victor in a David and Goliath drama.
The challenge is in making Uniloc known for more than just being a thorn in Microsoft’s side.
“This litigation is not what we do at Uniloc,” Chief Executive Brad Davis said last year. “It’s a necessary process. But meanwhile we are going to market with our products.”
Breaking off BlueCava gives Uniloc a bit of a clean slate, according to Norris.
“We wanted to have a sort of clean brand that would allow us to go out and license technology as BlueCava,” he said. “The focus from a marketing and standpoint will be licensing the software. Uniloc will be around creating and enforcing patents.”
Uniloc’s software identifies physical traits about the guts of a computer, iPhone or other device—sort of like charting an individual’s DNA.
Software Shift
BlueCava puts a twist on Uniloc’s device identification software and is marketing it to online retailers and other sites looking to protect against fraud and improve targeted online advertising.
Web sites operators want to know the “history” of a computer visiting their sites—either for marketing purposes or to prevent fraud or other criminal activity.
“We are using patented technology to identify the computer coming to a Web site without having to get user input,” Norris said. “We can look up the historical reputation of that computer.”
BlueCava envisions information about each device or computer being put into a “device exchange” database that’s updated by users of its software.
“We provide a service so that any business that wants to know about a particular machine or device can find out what we know about it,” Norris said. “And we will return information that has been contributed by other members of the exchange.”
BlueCava’s technology allows companies to block unwanted users, fight fraud and mandate the kind of behavior they want, Norris said.
In addition to e-commerce, he said he sees potential customers in social networking sites, online dating sites and sites designed for kids.
BlueCava is set to compete with a handful of security software companies, including Portland, Ore.-based Iovation Inc., Scottsdale-based 41st Parameter Inc. and others.
These companies collect their own private databases of “bad” computers and sell them to others.
BlueCava is taking “more of a Google-like approach in creating a very low barrier to entry,” Norris said. “Most people have a propriety database—a very closed system—that they build up and sell. We are taking more of an open approach.”
Norris has a history of starting and selling companies.
He most recently ran Seattle’s OnRequest Images Inc., which runs a database of photos used in marketing and promotions.
He also started Texas-based software maker ObjectSpace Inc., which filed to go public in early 2000 before the tech bubble burst. Later that year, the company dropped its plans to raise $115 million in an offering and eventually filed for bankruptcy and sold off its product lines to Frisco, Texas-based Recursion Software Inc.
