http://www.eetimes.com/showArticle.j...

Rick Merritt

EE Times
(04/17/2008 5:34 PM EDT)

SAN JOSE, Calif. ? The drive to rack up intellectual property rights has gone too far, said consultant Jim Turley in a lunch address before a crowd that included dozens of IP managers and lawyers at the Intellectual Property Symposium here.

In a talk billed as "Confessions of a Patent Troll" Turley chose not to discuss his most recent experiences as chief executive of Patriot Scientific, a company that has racked up tens of millions in revenues licensing its microprocessor patents to companies such as Intel Corp. However, he did provide some color on how difficult the silicon IP business can be based on his experiences as former vice president of marketing at ARC International.

Excesses in IP, particularly copyright, were the main theme of the talk before a group of about 200. He noted that the Disney character of Mickey Mouse originated in a cartoon called Steam Boat Willie many elements of which were borrowed from a Buster Keaton film with a similar name.

"It's ironic that Disney spends so much time trying to defend copyright on a character that is based on borrowed ideas," said Turley, principal of consulting firm Silicon Insider (Pacific Grove, Calif.).

Turley also recounted a pending case in which a University of Florida professor is suing a student for copyright violation because he tried to sell another student his class notes. "Does this mean if I retell a Robin Williams joke I owe him royalties," he asked.

"I don't think everything has to have an owner and be assigned a value because not everything we do is royalty bearing or even has any commercial value," Turley said. "If we both have candles and I share a light with you, it doesn't make mine any less bright," he added.

Troubled silicon IP sector

In a lighter vein, he compared the business of selling silicon IP to that of prostitution. "They both have low overhead, let you sell the same goods over and over again and the value of your assets declines rapidly over time," he quipped to the audience which also included several executives from semiconductor IP companies.

The business is a difficult one because half of its customers typically never get to volume production. In addition, silicon IP providers are typically the last to get paid in the design chain of a consumer product.

"You have to be willing to hold your breath for three years," he said.

Turley said he had calculated that silicon is more valuable by weight than gold, champagne, a Mercedes or cocaine. But putting a price on its exact value can be difficult. Some companies have tried to charge on the basis of die area, but that doesn't work well, he added.

"You wind up designing circuits so big they have to beep when they back up," he quipped.

In a separate panel discussion on trends in semiconductor IP a number of vendors echoed Turley's views on the difficulties of that emerging business.

The industry sector is about 12 years old but is already consolidating under the weight of technical complexity and tough business conditions, said John Koeter, director of marketing for the IP business of Synopsys. He noted die sizes for silicon IP have grown as much as 24-fold over that time while design starts for ASICs have declined dramatically.

"I think very few of us would start a new IP company. The largest provider will make a lot of money, the second or third makes a little and the rest make nothing," said Mike Kaskowitz, a former vice president of semiconductor IP at Mosaid. "The model is totally broken because we are basically selling design services for $200,000-$300,000 and wind up building their whole ASIC, a job that used to pay $2-3 million," he added.

"There is a need to find a new way to do business together," agreed Brani Buric, vice president of product marketing for Virage Logic Corp.

"I do believe there is a problem with longevity of IP companies," said Kevin Meyer, a vice president of marketing at Chartered Semiconductor.

Go PTSC Onwards and Upwards!

Cheers~