Potential buyers can bid for intellectual property belonging to NeuroMEDx, a defunct startup based in St. Cloud, Minn., beginning Nov. 11 in Napa, Calif.
Founded by Hans Mische, a medical device entrepreneur and former director of product development for American Medical Systems Inc., NeuroMEDx was developing implantable devices designed to improve neurostimulation therapies for diseases like heart failure, Parkinson’s, and hypertension. The device generates mechanical stress that regulates the ability of tissue to transmit electrical signals to the brain.
In an interview, Mische said the company could not raise enough money from investors. Lacking resources to properly shop the IP, Mische chose an auction administered by ICAP Ocean Tomo for “efficiency” and to generate momentum among potential buyers.
IP auctions are fairly new but are becoming increasingly common as startups unable to raise money in a difficult economy try to recoup some money from their technology. A slow economy also means investors and companies can’t command ideal value for their secret sauce. Throwing IP into a national auction makes sense because it offers access to more buyers who could drive up the price by bidding against each other. Since 2006, ICAP Ocean Tomo says it has held 10 such auctions in the United States and Europe, generating $135 million-worth of transactions.
“Designed to bring a sense of urgency and closure to IP transactions, the auction platform creates a center for IP liquidity and promotes transparency for a market in which none had historically existed,” according to the company’s website.
Auction doesn’t necessarily mean a patent giveaway. Mische says there is a minimum price his IP must fetch; otherwise, the company will just keep trying to raise more investor cash.