An inside look at Intellectual Ventures

A reader writes"Nathan Myhrvold has started a multi-hundred million dollar firm to develop new inventions and patent them. It has remained a very secretive organization, despite recruiting reclusive geniuses and buying up thousands of patents from other companies. Now Business Week has the scoop: "As his cash-rich firm snaps up thousands of patents, fears emerge that it will become a leader in litigation - not innovation..."

Comments

A vile trade

[andrewman327]

I really take issue with companies whose business models center around taking others to court. This type of business is an insult to the inventors who did not get proper credit for their discoveries. From GMail to Amazon, frivilous suits alleging prior art hurt the bottom lines of legitimate companies that are not out to steal from anyone.

I hope that this venture exercises some restraint in its persuits.

Re: A vile trade

[Znork]

In my opinion, the law as it is is unfixable. The very structure of monopoly rights is inherently unbalanced and is an aberration in a free market, one whose costs are huge but unaccounted for, while the benefits in terms of innovation and rewards to actual inventors are dubious.

Redesign the system as stipend rights instead, conferring, in exchange for disclosure, the right to an actual monetary payout upon a certain level of use of the invention in question. That way the system is automatically balanced; with a standard government budget the costs are controllable (government spending tendencies aside), if too many 'patent stipends' are granted, the rewards for each shrink so all involved parties have an interest in only valid ones being granted. Companies would not need fear litigation; they could browse the patent databases as they please and just note which ones they include, combine and mix and match, etc. The litigation burden would go down; the inventor would not need to sue anyone for using their invention; the more the better, as their payout would increase.

Financing such a system isnt really that hard, once you accept that the current system isnt as 'free' as it seems, but is actually more or less equivalent to a taxation on new technology (which is _not_ a good thing, as it slows adoption rates even more). A flat 'innovation VAT' rate would be a large improvement, or even better, rates geared towards phasing out undesireable old technology. But above all, it should be accounted for, with measurable economic impact, not the current 'more or less years that does something or the other that we cant really tell to innovation and costs but you dont see it as it's in the price of goods and insurances'.

One story about Nathan Myrvold

[pablomarx]

Andy Hertzfeld strived to open Magic Cap at the time of the GMGC bankruptcy. If I remember Andy's explanation correctly, Nathan Myrvold, formerly of Microsoft, used the bankruptcy process to capture the IP after Andy Hertzfeld working with Andy Rubin had won two previous decisions to get the Magic Cap IP. Nathan mostly wanted the Telescript agent patents for his dead startup patent collection, though.
Afterwards, Andy H. continued to work with Nathan to pry the Magic Cap IP loose, since Nathan allegedly didn't care that much. But Nathan kept putting more and more restrictions on Magic Cap's use to the point that few would have been able to use the Magic Cap technology for anything practical or interesting even if it was open source. So Andy finally stopped trying.
The bottom line is that even though no one is using Magic Cap, we can't make it available as open source. And thus, and incredible amount of creativity, investment and hard work is effectively lost to the world (except for what people remember in their heads).

Old Idea

[should_be_linear]

See them in court if they try to get around my patent 3404987: "Method of starting a multi-hundred million dollar firms for establishing new inventions and patenting them".

The wonderful US legal system

[MosesJones]

As his cash-rich firm snaps up thousands of patents, fears emerge that it will become a leader in litigation - not innovation...

If you have a lot of money right now and are looking for the next easy buck you don't get much better than IP ownership at the moment. You know that Congress, Senate and the President are all gunning for greater IP protection and longevity, and you know that a large and growing proportion of the current patent stock are for either obvious ideas or taking of "real-world" ideas and putting an "e" infront of them.

Its hard to critisise it as a money making venture, but as low-life pond scum go its right up there with being a convicted monopolist.

You know what...

[damburger]

If somebody patented frivolous litigation, these guys would be screwed.

Re:How about other countries?

[Mindragon]

Patents and Copyrights are a right to sue over a particular piece of technology or art. You can "invent" the idea on the moon, file a US patent or copyright and then sue anyone (or everyone in the case of the RIAA/MPAA). All a patent or copyright is a "supposedly" clever piece of legalease that allows "LawYERS" the right and process to sue someone else.

An invention is an idea to make everyone's lives easier.

A patent or copyright is an idea to make everyone suffer for it.
 

Inventor's viewpoint

[Anonymous Coward]

As someone who has done a number of patentable ideas and put them into the public domain, I can say I wish I had patented them instead. At least with patents, you have some form of leverage. Ever try to cross license something in the public domain with some corporation's patent? Doesn't work too well. Having your own patents work better.

Oh, and if you think putting something in the public domain prevents some company from patenting it, think again. Sun has a patent application on stuff I put into the public domain 3 years ago. People have suggested I write to the USPTO or something. Wake up! I don't make any money from open source and it's not me who's being impacted. It's the people who would use the open source software who would be affected and *they* need to do something if they want to use it. If the public doesn't want to protect their own rights, then the public be damned.

Re:As with any business venture like this

[Anonymous Coward]

What's the difference between Apple or Microsoft plunging millions of dollars into R&D and then licensing their technology out to other companies? Isn't this exactly the same?

The lack of millions of dollars in R&D. This company is doing two things: 1) it buys up patents or cross licenses them from other companies or 2) just have people brainstorm ideas and patent them. There's no actual invention going on here. Invention requires coming up with an idea and making it work. The making it work part is the most important. What they are doing is screwing over those in the future who will make it work by patenting it now.

Re:How about other countries?

[jkabbe]

Simply put, a patent in the US gives the owner the right to prevent others from making, using, or selling the patented invention in the US. This is generally accomplished through litigation (although threats of litigation sometimes suffice :). A US patent has no effect outside the US.

This guy knows exactly what he's doing

[caesar-auf-nihil]

I read the article and I can tell you right now that this guy has the patent system figured out exactly, and, he just got several more patents for free.

The patent system in its current form gives the patent holder the right to prevent others from using the patent - not protect your invention. It's a subtle legal argument that makes the patent system the broken form it is today. By preventing others from using your invention, you have the ability to make others either pay you to use your idea legally, or, give you the right to practice something that the other patent holder is preventing you from doing.

So, this guy, by patenting ideas, no matter how bogus they may be, will gain a lot of ability to stop anyone and everyone from practicing anything he comes up with. In effect - he'll be rich without every actually producing any working product - just patenting all sorts of new potential ideas that may or may not come to be.

What is really slick was how this guy just milked several geniuses for idea, and he won't have to pay them for it. The whole "meeting" where he's asking top notch people in their field to come up with improvements on state of the art - this was his way of getting all the ideas to patent, and he doesn't have to reward any of it back to the people who came up with the ideas since they probably, (and stupidly) gave it up to him by coming to his "innovation conference". Notice how all of it was getting recorded? This will be his "proof" of when the idea was come up with, giving whoever owns this the right to the patent. Even if let's say he does allow the person who was in the room who came up with the idea - I guarentee that the patent will be assigned to his corporation since he "reimbursed" that "inventor" for their time with payment - i.e. whatever he paid them to come to his innovation conference.

This person knows exactly what he's doing and is playing the patent game perfectly. At this rate, he will win, or his antics will slow down the ability for new ideas to actually be produced, and heaven forbid, laws may have to be written to stop this type of behavior. I doubt the latter will come to pass.

Re:As with any business venture like this

[0xdeadbeef]

Mod points and a contrarian karma whore... *sigh* I hate giving the benefit of doubt.

Your appeal is misdirection. The entire point of the article is that the company is engaging in a pattern that should invite scrutiny. Microsoft and Apple's primary focus is to create products which they sell. They invest in research to give them a competitive advange, to increase the value of their products, and to acquire patents which would lock out smaller competitors. An idea farm such is this exists solely to exploit the patent system, for good or ill, but with the system rigged the way it is now, which would not have happend if powerful interests didn't want it that way, the propensity for ill is far greater than that of good.

Violence and Patents

[argoff]

...I really take issue with companies whose business models center around taking others to court. This type of business is an insult to the inventors who did not get proper credit for their discoveries.

The problem with patents is way deeper that that. The big problem is not now, but 20+ years from now as society will likely start to enter the replication age and 3d-printer/nano/bio technologies will eventually shift manufacturing away from the factory and back into the home. When this happens, some people will see this as a way to create tremendous wealth by offering creation related services. Unfortunately, others will see this as an opportunity to extract nearly infinite licensing royalities. In sum, manufacturing will become commoditized and there will be this huge pressure for the powers that be to coerce themsleves into every aspect of peoples private lives.

History teaches that when the labor force became commoditized in the mid 1800's - it blew up the plans of the plantation systems to leverage industrial technology to expand their plantations for unlimited growth and profit. The consequence was the most bloody war in human history - the US civil war. It was considered the most bloody in human history because they were just beginning to figure out how to use these new technologies to kill people, but hadn't developed any adequete defences yet.

The point is that a similar problem will happen when patents become commoditized, and when those who wish to impose patent controlls resort to coercion to impose them. People don't seem to understand that patents by their very nature are violent and genocidial and could easially lead to the ruthless murder of billions as manufacturing becomes commoditized. In fact, their track record today isn't too impressive: eg, how safety devices in autos were held back 20 years because of patents, and how millions Africans died needlseely of AIDS because people tried to forbid them from making generics by suing in the world court. These are just some in a long list of exanples that have caused millions to die or suffer needlessly, right now most of the ruin is not obvious to us - but it certainly will eventually become so.

Re:Violence and Patents

[Nurf]

Ohhh... ok, so that explains why the "white man" doesn't get AIDS.

It is perhaps possible that you are not from Africa, and thus do not know that there are actually a lot of blacks in Africa that insist AIDS is a white conspiracy of some sort. The exact conspiracy changes, but the disbelief in AIDS doesn't.

There are several areas in Africa with 70% + HIV infection rates among blacks. On the whole, the whites dont get AIDS and the blacks do. There has been quite a bit of headscratching about this, and there seem to be several factors involved:

1) Male circumcision - Recent studies seem to show that male circumcision decreases the chance of a male becoming infected by a factor of around 7. That's a huge factor. A lot of whites are circumcised, but very few blacks are (in the high infection areas I am speaking about).
2) Social mores and ignorance - Several of the black cultures involved have very different attitudes to sex and safe sex. In many areas its almost impossible for the woman to get the man to wear a condom, because of both ignorance and the low social status of women. There is often basic ignorance of the concept of a germ theory of disease.
3) Whites tend to have fewer concurrent sexual partners. For those steeped in Western social mores or with a penchant for political correctness, I'm not saying either whites or blacks are heedless and promiscuous. However, I am saying that it is a lot more acceptable to have more than one concurrent stable sexual relationship in many black cultures, and this makes it easier for AIDS to spread than the white cultural tendency to have many partners in succession.
4) Fundamental disbelief in AIDS - It's hard to get people to take precautions when they think you are talking out your ass. When people die, the disease that killed them is pointed to as the cause of death, not AIDS. So, malaria, tuberculosis, and the flu have been really bad lately.

This means there are areas with near 100% infection rates in blacks, and very low infection rates in whites. It has nothing to do with race, and probably everything to do with social mores, conventions, and culture.

I don't claim to be the last word on this, but I came to the conclusions above after speaking to a fair number of people, some of them paramedics, and some of them farmers in remote areas.