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$400 Million IP Experiment Making Some Nervous
BrianWCarver writes "IP Law & Business shines the spotlight on Intellectual Ventures, the IP start-up founded in 2000 by former Microsoft chief technologist Nathan Myhrvold. According to some estimates, Intellectual Ventures has amassed 3,000-5,000 patents, with the help of a $400 million investment from some of the biggest technology companies, including Nokia, Intel, Apple, Sony, and Microsoft. As the patent stockpile grows, so does the speculation--and the fear. IP lawyers and tech executives worry that Intellectual Ventures is less interested in changing the world with big ideas, and more focused on becoming an über patent troll, wreaking litigation havoc across industries with its patents."
With the sheer volume of patents they hold, the smart move would be to avoid garnering too much attention from Congress and instead sell advantage to competing companies. In other words, their primary source of income wouldn't come from pure patent protection litigation, it would come from companies paying them to tie up their competitors' product lines with injunctions and patent violation suits. The 800 lbs. gorilla would get richer as a hitman than as a tyrant.
*** *** You're just jealous 'cause the voices talk to me... ***
What Intellectual Ventures could do is create a patent pool for the present members of the club.
It works like this: Microsoft transfers its patent portfolio to IV in return for a license to IV's patent portfolio. This is no loss to MS because they've already cross-licensed everything with Philips, Cisco, etc. -- all of whom do the same. From the POV of club members, nothing changes, except perhaps that they spend much less money negotiating cross-licensing agreements and pay a bit to IV for the convenience.
On the other hand, now IV has practically all of that throw weight. Anyone not an "Executive Member" of the club will have to pay (dearly!) to use any of the IV portfolio. What's more, Mutually Assured Destruction doesn't work because IV doesn't actually do anything -- they can't be sued for infringing patents when they don't make anything.
The upside to the club (aside from convenience noted above) is that any of the "little people" who get uppity are now facing the combined throw weight of all of the patents in the world -- and the club members don't have to accept the public-relations liabilities.
It's a total win-win situation. For instance, if done right Microsoft could keep Linux tied up in court forever without ever themselves taking a PR hit. Sort of like the BSA except for suppressing potential competition instead of keeping customers in line.
Lacking <sarcasm> tags,
Here is an idea to protest against software patents.
Create an open source patent organization and start applying for software patents on behalf of open source coders for every little piece of innovation. The idea is to keep the threshold of what qualifies as innovation low to generate a huge list of patent applications.
Anything useless from "emphasizing email addresses containing a numbers in a word processing document" to "a real fancy way of optimizing inner loops in interpreted languages" to "a memory management code for NUMA architecture"
The important goal is not to get a software patent but to demonstrate the weakness of the system.
This will overwhelm the patent office. at best cause a change in thinking of policy makers. at least it will cause a headache for the patent mongers.
Alright patent bashing aside ...
As I understand IV from some people working with them (with the caveat that my understanding is not based on a direct relationship with them, but lunch conversations/rumor):
1) The $400M is NOT an investment. It is blackmail, like protection money. Company X pays IV for the costs of a patent portfolio with the understanding that IV will not sue Company X based on those patents (i.e. they get a license). So, Company X pays protection money to IV and IV gets new patents paid for to go sue others on.
2) There is no "speculation" that IV is a troll. As I understand it, that is their purpose.
3) IV doesn't invent anything. They buy blocks of patents on the cheap (especially if they get other firms to pay) from some other company's firesale. Usually these patents are an unusable mess and require massive clean-up. But, if you buy thousands of patents you'll hit gold eventually.
4) As a troll, if you don't have deep pockets, IV doesn't care about you (unless you have something to sell). This is cincontrast with real companies that often use their patents to prevent a second company from making a product. IV just wants money.
The term "patent trolling" is just name-calling. Patents are supposed to be used by the people who invent things to get money from the people who use those inventions to make products. There is no reason to expect people only to invent things that they themselves are capable of bringing to market, and to impose that expectation would reduce the ideas being published in patents and give no incentive to invent or to disclose.
Focus instead on the real problems with the current parent system:
-companies and their engineers are discouraged from using or even looking at existing 3rd party patents due to a stupid interpretation of the willful infringement rule
-it is too expensive to apply for patents, especially for individuals
-it is far too expensive and time-consuming to get legitimate judgements against infringers
-obvious or prior-art patents are routinely granted, and the examiners' incentives encourage this
-patents are often issued that either do not work or do not fully and comprehensibly disclose how to implement the invention
-there is no automatic licensing scheme (as for public playing of music) or overall royalty % cap to asuage the fears of companies that they'll get nibbled to death by various IP holders for acknowledging all the patented technology that goes into making a state-of-the-art product.
"Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery?" - Patrick Henry
Here's a video interview with him on CNET: http://feeds.bignewsnetwork.com/redir.php?jid=2185 46b58b244f4f&cat=52079c37c3706e15
Basically, his rationale is that because companies don't permit engineers to check patent portfolios and many companies don't actively check patents against their own products a lot of companies are in trouble.
Personally, though I'm not quite convinced. I believe it is a way to squeeze out the small players in the market. There's something about this guy that after seeing the video demonstrates one thing: not trustworthy. His body language and voice show through right away.
I wonder how much it costs to join the "club" and I wonder what kind of contract you have to sign to get in.