| Small & micro cap project / Activism insight

Patent-rich companies in small and micro-caps

by | Jan 20, 2020

Why track patent-rich companies?

Patents enable products to enjoy a long life cycle. AOL sold its patent assets to Microsoft for $1.05 billion and Google acquired Motorola, predominantly for its patent assets. Some investors have the ability to value patents and unlock the asset. We will improve the scope of the research after suggestions from investors.

Flotek Industries Inc (FTK, M.Cap: $95 million)50 patents, 55 registered trademarks

Significant patent discussions

  • Flotek’s flagship patented chemistry technologies include Complex nano-Fluid®, Pressure reducing Fluids® and MicroSolv™. Chemistries branded Complex nano-Fluid® technologies are patented both domestically and internationally and are proven cost-effective performance additives within both the oil and natural gas markets.
  • Chemistries branded Pressure reducing Fluids® technologiesare a patented line of high molecular weight polymers used as friction reducers that reduce turbulence and maximize the use of the polymer at a lower loading rate.
  • Introduced in April 2018, chemistries branded MicroSolv™ are a patented line of microemulsion technologies designed to deliver cost-effective performance.

Patent/trademark count

Within its continuing operations, the company currently has 50 issued patents and over 70 pending patent applications filed in the U.S. and abroad on various chemical compositions and methods, and software methods. In addition, the company currently has 55 registered trademarks and over a dozen pending trademark applications filed in the U.S. and abroad, covering a variety of goods and services.

Mitek Systems, Inc.: (MITK, M.Cap: $388 million) – 57 patents, 25 registered trademarks

Mitek began selling Mobile Deposit® in early 2008 and received its first patent for this product in August 2010. Mitek’s Mobile Deposit® solution is used today by millions of consumers in the United States (“U.S.”) and Canada for mobile check deposits. Mobile Deposit® enables individuals and businesses to remotely deposit checks using their camera-equipped smartphone or tablet.

As of September 30, 2019, the U.S. Patent and Trademark Office has issued the company 57 patents, and the company has filed for 25 additional domestic and international patents. The company also has 38 registered trademarks. 

Owner-operator – proxy research

When business fundamentals and valuation is important, why are we researching just proxy statements? Even though the management team is crucial with all businesses, the management team’s role is profound in micro-cap and small-cap companies. Given the fact that we are flagging only owner-operators in this series, it is crucial to see whether the management team’s motive is aligned with the interests of shareholders. Over time, we intend to build a massive database of “owner-operator” companies.

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