SoftBank’s Fortress Investment Group is raising a $400 million fund to sue tech companies over intellectual property infringement, The Post has learned.
That’s despite the fact that SoftBank — controlled by Japanese billionaire Masayoshi Son — has a $100 billion Vision fund that invests in exactly the kinds of companies targeted by so-called “patent trolls” that haven’t created successful businesses with their intellectual property.
“I think they will make a lot of money,” a source who is considering investing in the fund told The Post. The source added, though, that he believes the arrangement is very odd.
Japan’s SoftBank in December bought hedge fund Fortress for $3.3 billion. To win US regulatory approval, it agreed to let Fortress run independently.
SoftBank controls tech companies including Sprint, which has agreed to merge with T-Mobile. Son’s firm also owns big stakes in Alibaba and Uber.
SoftBank has experience being sued for alleged patent infringement.
A few years ago, Wi-Lan, a Canadian tech company, claimed SoftBank was infringing on its chip patents, and SoftBank settled the dispute by paying a license fee.
This will be Fortress’ first IP fund.
Since 2013, Fortress has profited from lending money to small-cap companies that basically just own patents. For example, it loaned money to Inventergy Global in exchange for wireless technology patents. After acquiring the patents, Inventergy in 2014 sued Apple.
In this new fund, Fortress will both buy companies with patent portfolios and lend money to small-cap, patent-rich companies as it has done in the past, the source said.
Fortress did not return calls.