Ocean Tomo cuts 20 percent of workforce

Ocean Tomo LLC, the Chicago-based merchant bank that conducts auctions of patents and other intellectual-property assets, laid off 20 percent of its workforce and is scaling back its planned auctions.

After monitoring the market since October, "we came to two conclusions," James Malakowski, Ocean Tomo's chief executive officer, said in a March 13 phone interview. While the market for IP auctions remains strong, "there will likely be fewer high priced deals" and companies are scaling back their travel budgets, he said.

As a result, Ocean Tomo shifted some of its resources from auctions to expert testimony and corporate restructuring, and several auctions will be Web-based rather than live events.

Andrew T. Ramer, former president of Ocean Tomo Auctions, resigned in early March, and took with him two key auction personnel, Justin Basara and Ragnar Olson.

Ramer would say only that he had a difference in philosophy and approach from other senior Ocean Tomo officials and felt it was time to leave. The parting is amicable, he said.

Malakowski declined to go into specifics about Ramer's departure, only confirming that it was amicable. "He will find another opportunity commensurate with his ability, maybe bigger than the auctions," he said.

Ramer says he's weighing his options. "There's plenty of IP out there, and a lot of people who are selling assets. It's a great time to be an intermediary," he said in a March 13 telephone interview.

He anticipates that the next IP boom will be in clean technology and green technologies. Malakowski says he also expects a growing market in health care, medical devices and biotechnology.

The Ocean Tomo chief anticipates that more universities will get into the IP auction market and to that end, his company hired Dipanjan Nag, the former director of operations in the Office of Technology Development at the University of Nebraska- Lincoln. Nag, who has a doctorate in biophysical chemistry and instrumentation and has done DNA-related research, will "tap into biopharma and university experience," Malakowski said.

Ocean Tomo is still holding a live auction March 27 at the San Francisco Ritz-Carlton. One of the items up for offer is a collection of 15,000 hours of video recordings and more than 16,000 images from the evangelical Christian PTL network created by Jim Bakker and the late Tammy Faye Bakker.

While Ocean Tomo is far better known for its patent auctions, Malakowski says there is "definitely activity from multiple bidders" over the Bakker lot.

Other items up for sale at the auction include patents for electronics and hand-held devices, optical networking, social networking, display technology, smart cards, wireless communications, power-control systems, semiconductors, and entertainment and gaming.

Ocean Tomo will hold a Web-based auction in the summer in place of a live auction originally set for Hong Kong, Malakowski said. A live auction in Paris in November will still be held.

Three patents acquired at past Ocean Tomo auctions have been subjects of litigation. Ramer insists that even though non- practicing entities -- sometimes known as "patent trolls" -- can buy IP through the auctions and use them to file infringement suits, "at the end of the day companies will buy and sell patents regardless. And patent trolls will be buying patents regardless," he said.

"What's worse, behind the scenes or having them traded publicly?" he asked.