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Investment Companies Backing Patent Trolls

Posted by kdawson on from the arms-merchants-in-the-patent-wars dept.

greenbird sends us to Forbes for an account of billions in investments flowing to US patent troll companies. One example is DeepNines, who is suing McAfee over a patent that covers combining an IDS and firewall in a single device. The patent was filed on May 17, 2000 and issued on June 6, 2006. No prior art for that, no siree. DeepNines is funded by "an $8 million zero-coupon note to Altitude Capital Partners, a New York City private equity firm, promising in return a cut of any winnings stemming from the lawsuit. The payout is based on a formula that grants Altitude a percentage that decreases with a bigger award."

2 of 147 comments (clear)

  1. Re:You can't build a solid economy on IP. by maxume · · Score: 3, Informative

    Pish posh. The US has plenty of manufacturing capacity. Only recently has China started to overtake the US in exports of real goods(points 4,5 and 6):

    http://www.bbc.co.uk/blogs/thereporters/evandavis/ 2007/04/the_state_of_trade.html

    Note that the US is the largest exporter overall. Even foreign companies build many of their cars here:

    http://www.time.com/time/printout/0,8816,1004876,0 0.html
    http://www.usatoday.com/money/autos/2007-03-22-ame rican-usat_N.htm

    --
    Nerd rage is the funniest rage.
  2. Re:You can't build a solid economy on IP. by vux984 · · Score: 3, Informative

    That's crap.

    No it isn't.

    Lossy compression algorithms, for example, are clearly valuable, or people wouldn't use them.

    No, they are clearly useful. That doesn't make it valuable. Value only shows up when there is scarcity.

    That is why air, for example, which is essential to life is free. There is (currently) no scarcity.

    A lossy compression algorithm, once thought up, is like air. There is be no scarcity of an idea once thought up, except through deliberate and artificial suppression.

    At this stage, it takes little more to make an idea or algorithm infinitely available than a decision. In the past, replicating, ideas/algorithms/software/whatever and distributing them was enough of a chore that ideas algorithms and processes were literally scarce, and had value.

    But today, in the 'internet age' the price of replicating and distributing information has dropped so close to zero that its almost irrelevant. The only thing that gives them any value, is our collective decision not to make 'unauthorized copies' in order to artificially prop up scarcity, and by extension prop up their value.

    If we ever collectively chose not to, its game over for IP. There is nothing intrinsically scare about it (once created).