NEW YORK - Billionaire Ross Perot is the principal investor in a $200 million private equity fund set up to buy companies with undervalued patent portfolios--the first time that a private equity fund has been established solely to invest in intellectual property.

The fund, being set up by the Chicago merchant bank ICMB Ocean Tomo, is called Ocean Tomo Capital Fund, and will be acquiring or securing controlling stakes in patent-rich companies with revenue between $50 million and $1 billion. Areas of interests include semiconductors, biotech, nanotechnology and software.

Patents have recently become hot property. Just in the last two years, a number of small companies armed with patents but little or no product scored big patent-infringement victories against large businesses.

In April, the medical-device manufacturer Medtronic (nyse: MDT - news - people ) settled for $1.35 billion charges that it infringed on spinal-infusion technology patented by California surgeon Gary Michelson. In March, Canada`s Research In Motion (nasdaq: RIMM - news - people ) settled a patent-infringement case related to its popular BlackBerry device for $450 million with NTP, a small Arlington, Va.-based outfit. In 2003, a federal jury in Chicago awarded tiny Eolas Technologies $521 million in damages for software patent violation by Microsoft (nasdaq: MSFT - news - people ).

The practice of acquiring intellectual property for profit has been around for some time. However, this is the first time that a prominent investor would throw so much money in the game.

Another player betting on patents is former Microsoft Chief Technology Officer Nathan Myhrvold. His company, Seattle-based Intellectual Ventures, behaves more like a patent factory, however, employing inventors and patent lawyers to develop and patent valuable new ideas.

Perot, the maverick two-time presidential candidate, has a history of betting on promising technology.

He made the bulk of his $3.7 billion fortune by starting the data-processing company Electronic Data Systems (nyse: EDS - news - people ) and selling it for $1.4 billion in cash aNEW YORK - Billionaire Ross Perot is the principal investor in a $200 million private equity fund set up to buy companies with undervalued patent portfolios--the first time that a private equity fund has been established solely to invest in intellectual property.

The fund, being set up by the Chicago merchant bank ICMB Ocean Tomo, is called Ocean Tomo Capital Fund, and will be acquiring or securing controlling stakes in patent-rich companies with revenue between $50 million and $1 billion. Areas of interests include semiconductors, biotech, nanotechnology and software.

Patents have recently become hot property. Just in the last two years, a number of small companies armed with patents but little or no product scored big patent-infringement victories against large businesses.

In April, the medical-device manufacturer Medtronic (nyse: MDT - news - people ) settled for $1.35 billion charges that it infringed on spinal-infusion technology patented by California surgeon Gary Michelson. In March, Canada`s Research In Motion (nasdaq: RIMM - news - people ) settled a patent-infringement case related to its popular BlackBerry device for $450 million with NTP, a small Arlington, Va.-based outfit. In 2003, a federal jury in Chicago awarded tiny Eolas Technologies $521 million in damages for software patent violation by Microsoft (nasdaq: MSFT - news - people ).

The practice of acquiring intellectual property for profit has been around for some time. However, this is the first time that a prominent investor would throw so much money in the game.

Another player betting on patents is former Microsoft Chief Technology Officer Nathan Myhrvold. His company, Seattle-based Intellectual Ventures, behaves more like a patent factory, however, employing inventors and patent lawyers to develop and patent valuable new ideas.

Perot, the maverick two-time presidential candidate, has a history of betting on promising technology.

He made the bulk of his $3.7 billion fortune by starting the data-processing company Electronic Data Systems (nyse: EDS - news - people ) and selling it for $1.4 billion in cash and stock to General Motors (nyse: GM - news - people ) in 1984. In the late 1980s, he paid $20 million for a 12% stake in a computer business called NeXT, which Steve Jobs started after leaving Apple Computer (nasdaq: AAPL - news - people ). Though NeXT was a dud, Apple acquired the company for $400 million in 1996, making Perot`s stake worth $48 million.

and stock to General Motors (nyse: GM - news - people ) in 1984. In the late 1980s, he paid $20 million for a 12% stake in a computer business called NeXT, which Steve Jobs started after leaving Apple Computer (nasdaq: AAPL - news - people ). Though NeXT was a dud, Apple acquired the company for $400 million in 1996, making Perot`s stake worth $48 million.