Jose Torres smiles when I point out what happens when someone Googles the phrase “Intellectual Ventures.” The company, led by former Microsoft technology chief Nathan Myhrvold, is a lightning rod in the technology industry, with its giant intellectual property holdings earning it labels ranging from “patent troll” to “the most hated company in tech.”
And those are some of the more polite descriptions.
So why did Torres, the CEO of Seattle-based wearable technology startup REFLX Labs, decide to approach Intellectual Ventures, unsolicited, about a partnership?
“It really is a great value-add to our company,” he says. “These guys want to see us win, and they’ve given us the tools to do so.”
Intellectual Ventures and REFLX are announcing their strategic partnership this morning. REFLX will work with IV’s Invention Development Fund, leveraging the Bellevue-based company’s global reach and network of inventors to further develop and commercialize its technology, starting with REFLX’s Boogio Bionic Foot Sensors.
Boogio is a paper-thin shoe insert with 65,000 layers of pressure sensitivity, connecting to a small device that attaches to any shoe, containing an accelerometer, gyroscope and Bluetooth connectivity. The technology outputs large amounts of data about the user’s weight distribution and motion, which can connect to a smartphone and be used for a wide variety of applications in digital health, gaming, and other industries.
“You’re hacking your shoe, basically,” Torres explains, demonstrating the Boogio at the GeekWire offices this week.
REFLX is slated to release its first Boogio Developer Kit for $189 next year. The startup is a spin-out of the Qi2 engineering and development company, which is the majority owner of REFLX.
Torres, an artist and graphic designer by training, said his eyes were opened to the realities of intellectual property in part by high-profile patent disputes such as those faced by fitness tracking technology company Basis and smart thermostat maker Nest.
Although REFLX has its own patents pending, the arrangement with Intellectual Ventures also gives the company the ability to leverage IV’s patent portfolio, not only for product development but also for legal protection.
The companies declined to provide any specifics about the terms of their deal. But in general, IV says, “Intellectual Ventures’ Invention Development Fund (IDF) benefits, through royalties and other compensation, from the value it adds to the development and commercialization of a leading edge product, that also complements IDF’s existing IP portfolio in the wearables space.”
Torres described the deal as favorable to REFLX and said it gives the company flexibility to raise future capital without tying its hands.
Typically, over time, the financial interest received by Intellectual Ventures in this type of deal is “more related to a royalty or tied in some way to the ultimate economic value of the company,” said Chris Alliegro, the executive vice president who heads the Intellectual Ventures Invention Development Fund, without going into details about the REFLX deal itself.
“Something as cool as REFLX is going to be a global product one day, and one of the things that we’re able to do is help really fast-track that movement and growth into other places around the world,” Alliegro said.
Torres acknowledged some early skepticism inside the startup about working with Intellectual Ventures, but said key stakeholders have been won over by the partnership and the potential to fuel the company’s growth.
“This is more about looking forward, as opposed to us being this massive multi-million dollar company trying to seek protection from these guys,” he said. “I was the one that actually approached IV over a year ago to start this conversation. I’m really excited to be working with them.”
