We reached out to him for comment, and here’s his full explanation:
It’s a hedge against the unlimited patent risk every company I have an investment in faces. If patent laws continue to be as they are, this is the only way I can see that allows any level of protection. the patents they are merging into the company are far stronger than most.
It’s not a fail proof approach, but it’s a unique hedging alternative.
In case you missed it, here’s the backstory. Cuban hates our ridiculous patent system. He’s rooting for Yahoo to win its patent suit against Facebook, because he thinks it will lead to a radical reform of the patent laws.
As a result of the patent stuff, he invested in Vringo, which was a mobile ringtone company. Vringo merged with another company, which has patents from Lycos, the web 1.0 company. Those patents are being used in lawsuits.
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