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All Magic Leap Patents Have Been Assigned to J.P. Chase Morgan as Collateral
- ironfootnz 7y agoAs expected. I don’t feel they will ever deliver anything.
- echelon 7y agoHow did they ever raise such capital? I want in on it. Capex for R&D is prohibitive.
- SenHeng 7y agoA company I used to work for was recently acquired because they were supposedly working on some kind of block chain technology. After the acquisition, all ‘work’ on the block chain was stopped and everyone reassigned to other, more mundane projects. Word is, the ex-CEO somehow sweet talked the acquirers with some fancy PowerPoint slides. He spends most of his time coming up with these proposals and shops them around to unsuspecting VCs and acquirers. Took him a few years but seems like he finally got one to bite. I suspect many smaller tech firms are similar.
- jmspring 7y agoDid this individual used to work in the identity space? Canadian?
- eberkund 7y agoI interviewed with a company that matches this description, I remember thinking their product sounded pretty silly.
- specialist 7y agoA buddy works for a permanent startup. Has never shown a profit. He's convinced it's a money laundering operation. He likes the work, so he doesn't ask too many questions.
- deleted 7y ago[deleted]
- hos234 7y ago> How did they ever raise such capital? Access to a good network. It's not like cash isn't available these days. It's just that you have to treat networking as a full time job and hone the craft just as you would anything technical.
- suyash 7y agoGreat marketing and lot of suckers who bought into the Hype.
- tus88 7y agoIts called hype - hype around VR/AR specifically.
- jayd16 7y agoEhh, its more than just hype. They have a device that exceeds the Hololens. Its not vaporware.
- vanniv 7y agoThe Softbank Vision fund is a very interesting and strange beast. Created by a risk junkie, funded mostly by governments hoping to mix profit with prestige, and ultimately likely to implode as part of the next tech bust.
- chadcmulligan 7y agoLol, I thought the same, here I am bootstrapping - the things I could do with 1 percent or even 0.1 percent of that money.
- telaelit 7y agoBig businesses taking over, yet again.
- berberous 7y agoThe title and tone of this article make it sound unusual that the company used its IP as collateral. You can get better loan terms (such as the interest rate) if your loan is secured. If you are going to get a secured loan, the default is that it's secured by 'all assets', which includes IP. In order to perfect a security interest in IP, you need to make this type of filing -- and a lender will be especially sure to do so when making a secured loan to this type of company because the company likely has little other assets of value with which to secure the loan.
- strangeloops85 7y agoYes, I suppose the more salient thing here is that they did take out a large loan to meet their opex while (likely) trying to raise a rather large round to keep going and release the next device. I wonder if softbank's current precarity is causing some general difficulties, independent of Magic Leap's viability. The scale of their cash needs going forward are.. rather large
- perspective1 7y agoSo did Magic Leap default, or is the loan newly made with JPM to hold the patents while the loan is outstanding? Seems like the IP in this case isn't very valuable to JPM* and this is more just another way to guarantee the seniority of JPM's loan. * Didn't read the patents themselves, but Oculus, Hololens and others are doing just fine without them. So, hard to imagine they have too much auction value.
- berberous 7y agoIt looks like Magic Leap just closed on a new loan in August, not that they defaulted. This filing ensures that if they ever _do_ default, JPM has the rights it expects in the IP as collateral.
- kguttag 7y agoI'm not a lawyer, but my understanding that the effectively J.P. Morgan now owns the patents (unless a court somehow unwinds the deal) and why the assignment was registered with the USPTO. The patents are then being licensed back to Magic Leap. In this way if Magic Leap defaults, J.P. Mogan simply owns the I.P. like if you pawn something and default on the payback terms.
- kelsolaar 7y agoLooks like his server is in damage control, Web Archive has a copy but is in the same state for me: https://web.archive.org/web/*/https://www.kguttag.com/2019/11/10/all-magic-leap-patents-have-apparently-been-assigned-to-j-p-chase-morgan-as-collateral/ https://web.archive.org/web/*/https://www.kguttag.com/2019/1...
- kguttag 7y agoThanks for providing the link to the archive. I have up the capacity, but when the cite hits #1 on Hacker News (as it is right now), it looks like the traffic is still overwhelming. It probably does not help that I put the larger associated document for people to download (I was going to put a link up but the link was not working in the Chrome browser).
- kelsolaar 7y agoThanks Karl! Seems like it is fine now.
- foolfoolz 7y agoMagic leap founded in 2010 Raised $2.6 Billion Revenue: $0?
- nrp 7y agoIt wouldn’t be $0, since they have likely sold a few tens of thousands of dev kits. Gross profit on those devices is likely zero or worse though.
- Nition 7y ago> a few tens of thousands of dev kits I'd be willing to bet that it's more like a few thousand at most. Does anyone here know anyone with a Magic Leap One (maybe yes, since this is Hacker News, but still...)?
- nrp 7y agoFair. Karl is probably close to the mark with his estimate of 5-8k. I would also guess that the vast majority of those are in the hands of other companies in the AR space rather than end-users of AR experiences.
- soylentgraham 7y ago^ this. I am unable to buy a pair (in London), but I have some loaned to me from ML so I can help someone deliver a product (for festivals, not the store/consumers) Both these things continue to point toward the hype machine over mass market/sales/consumer consumption
- dorkwood 7y agoA developer friend of mine has a pair. They’re pretty underwhelming. It basically creates a small rectangular overlay in the centre of your vision. Far from the fully immersive experience I was expecting.
- neuronic 7y ago
- Bud 7y agoI'm amused that anyone ever took Magic Leap seriously. It's basically Apple's Newton; a good idea without the tech, without the infrastructure, without the content to sustain it and make it useful. Check back in after 10 years.
- ineedasername 7y agoWell, the Newton at least went to market with a consumer-facing product. That's one up on Magic Leap.
- mceachen 7y agoNewton's second release of hardware and software was actually pretty solid. It needed some user training (there were many features that simply weren't discoverable, but were slick one you knew), and it was expensive. It certainly wasn't a toy with a couple half-baked demos and no actual apps. There was a healthy third party hardware and software developer ecosystem. A lot of people (including me!) wanted to see it work, and it was frustrating to have Jobs kill it right when it was getting traction.
- Bud 7y agoI wanted to see it work too; I bought one! But in retrospect I think it's clear that it was a product that was about 10 years before its time. Once it was possible to build something (iPhone) about 5x smaller, about 10x faster, with about 100x the connectivity, and about 10x the display resolution, that's when it really took off.
- swalsh 7y agoYeah, but imagine getting in on Apple when the Newton was the big thing, and then staying for when the iPad was the real thing.
- Ididntdothis 7y agoWhat happened to them? They were in the news a lot for a while but lately it’s totally quiet . I thought they finally had released something. Has anybody tried their tech?
- jayd16 7y agoYeah, they have a devkit you can get. Its neat but with no install base and Hololens looming over them, there's not much to talk about.
- TheSoftwareGuy 7y agoI’m really hoping magic leap makes it in the long run. They’re a huge tech employer in south Florida, and frankly we could use more tech companies. I’m always afraid a recession will wipe them out and flood the market with experienced engineers.
- arthurcolle 7y agoCouple years back when I was dating a girl in Ft Lauderdale, I was looking at companies in Florida. Interestingly enough, it was the only (!) state that was cutting funding for the CS program across its state programs. Ended up in NYC, and now, Washington D.C. Don’t think a single company can save the tech economy of a state that doesn’t seem to think its worth the investment. That being said, I love Florida and it would be awesome to build out a tech sector down there.
- 75dvtwin 7y agoNewly elected FL governor, in the first 6 months in the office, offered some positive developments in this area. Computer science and math were addressed explicitly https://www.flgov.com/2019/06/24/governor-ron-desantis-signs-cs-hb-7071/ https://www.flgov.com/2019/06/24/governor-ron-desantis-signs... --- Highlights of CS/HB 7071 include: - Establishing the “Florida Pathways to Career Opportunities Grant Program,” which provides competitive grants to eligible institutions to create or expand apprenticeship and pre-apprenticeship programs. - Requiring a reverse transfer between Florida universities and colleges to award an associate in arts degree to students who have completed necessary requirements. - Requiring career centers and Florida College System institutions to establish regional career pathways guaranteeing college credit toward an aligned associate degree program for eligible students who graduate with a certificate from a career center. - Establishing the “Last Mile Scholarship Program,” that will pay for eligible individuals to finish their first associate or baccalaureate degree. - Creating increased opportunities for students to take high quality computer science courses in high school by allowing students to count one course as either a require science or required math credit. - Codifying Governor DeSantis’ required audit of career and technical education, from Executive Order 19-31, as an annual requirement to ensure high quality pathways for students. ---
- egdod 7y agoThis is a recordation of a security interest, not an assignment.
- kguttag 7y agoThe patents show as Assigned to J.P. Morgan Chase. I'm not a lawyer, but I think it was done this way so the I.P. would immediately become J.P. Morgan Chase's in the case of default. We don't have access to the contract between Magic Leap and JP Morgan Chase to know what the exact terms and condition. Regardless, whereas before Magic Leap was able to raise money without putting up the I.P. as security for a loan.
- egdod 7y agoNo, this looks just like any other recorded security interest.
- Jerry2 7y ago>Magic Leap is estimated to have over 1,800 employees and 19 office sites. For a company that has no consumer product and has no revenue, to have this many employees is quite shocking to me.
- foob4r 7y agoWhen you have the money to spend, you find ways to spend it.
- myrloc 7y agoThey have had a consumer product out for over a year. You can find it clearly available for purchase on their website: https://shop.magicleap.com/ https://shop.magicleap.com/
- criddell 7y agoHuh. I had no idea it was for sale. I'm guessing not many of those two thousand employees are in marketing...
- zarriak 7y ago1800 employees and yet not a single reason to own the product. Sad to look back and realize that the huge investment that got at least me excited was in retrospect probably just a hedge bet on AR blowing up.
- dfcagency 7y agoRemarkable how banks just, always win.
- dannyw 7y agoThis is just an anecdote, but everyone and everything about Magic Leap has always struck me as pretentious, elitist, and ego-driven. I walked by their booth at GDC a couple years ago, and tried to struck up a conversation with the representatives. I was essentially shooed away and given a sticker. Later on that night, an invite to their Magic Leap party was sent to a telegram channel with an open invitation to 'come hang'. The only problem: the invite was sent 10 minutes before it was wrapping up, almost like a "look at our party you aren't invited to".
- aaron695 7y agoIf any wanker goes on about Theranos but didn't call out Magic Leap years ago delete them from your feed. And ML still goes on. We know its technologically impossible yet people still go on like its something. But the sad thing is, it's hard to say the actual value of the patents, to ML nothing but as a troll maybe a fair bit.
- hogFeast 7y agoWow. You think Jimmy would have learned after getting hosed down on WeWork...nope. Just anecdotal but JP Morgan appear to be involved in quite a few shitty deals this cycle. I know they are going hard in syndicated loans, which is very hot right now, wonder what we will find out when the tide goes out.
- nickpinkston 7y agoFYI - normal venture debt companies like WTI include IP as collateral as part of their standard deal docs. Just know what you're signing. You as founder are most likely going to be the one trying to sell your IP if your startup fails and your debt guys will essentially give you a commission to do so.
- gumby 7y agoInterestingly when I have gotten credit from Silicon Valley Bank they have always secured the debt with all the assets excluding IP. Why? Because they can't do anything with the IP while I presumably can find a buyer and pay them back.
- sytelus 7y ago> Magic Leap is spending somewhere between $600M and $800M per year and that they have burned through all of their initial $2.4 Billion. Is it possible for ML to be viable at all? Assuming they manage to make $1000 profit eventually per device, they will need to sell at least half million devices each year. It seems militery usage probably won't be able to fund this alone as the size of US militery is just 1.5M. In US, 40M iPhones are sold each year and one can think of largest possible market for $2000 devices is likely around 5M to 10M per year. So 10% of that is certainly possible if there was a compelling experience device.
- ThrustVectoring 7y agoIf they're selling it to the US military they're making at least mid-five-figures in unit profit.
- sdinsn 7y ago> mid-five-figures in unit profit Their most expensive product only costs $3,290.
- jonwachob91 7y agoYou underestimate how the US Military makes purchasing decisions...
- sdinsn 7y agoYou clearly don't understand. If they are selling units to the military for more than COTS, that's illegal. Let me provide the real facts, instead of your baseless speculations: Microsoft and Magic Leap were competing on a Army contract. Microsoft won. The contract is $480 million for 100k units. That's $4800 per unit. 4 figures, not 5. The Hololens 1 costed $5000/unit COTS. Magic Leap's cost proposal couldn't have been far off.
- jonwachob91 7y ago
- Animats 7y agoMagic Leap is spending somewhere between $600M and $800M per year and that they have burned through all of their initial $2.4 Billion. Doing what? They've sold a few thousand glasses, and have done a fair amount of R&D. But $2.4 billion? That's 12,000 engineer years.
- twic 7y agoSo what is up with AR? The way i naively imagine startups work is that they identify a market, develop a product for that market, then sell the product to the market. So where have the AR startups gone wrong? Did they not actually identify a market? Does the market turn out not to exist? Have they not been able to develop a product that adequatly fits the market? Are they unable to sell a perfectly good product to the market for some reason?
- rwallace 7y agoAs an outsider taking a quick look, this reminds me of the Apple Newton. - Hard problem, immature technology that barely works as yet. - Correct strategy would be vertical markets that have a particular need of the product, would pay enough per unit to pay for the R&D, would put it in the hands of professionals who can be trained to work around the inevitable bugs. - Company instead unwisely aims straight for the consumer market.