Does Recent Goodwill Undo Years of Patent Trolling For Intellectual Ventures?

CowboyNeal writes "Controversial patent-holding company Intellectual Ventures has been covered on Slashdot before, but a recent CNET article takes a look inside the company, at how they work, and what they have planned for the future. Read below to find out if they are merely a patent-troll, or if their shrewd tactics belie a more noble master plan?"

Intellectual Ventures was first founded in 2000, and since then has acquired an amazing portfolio of patents and "intellectual assets." Even the most conservative of estimates, indicate over 30,000 purchased patents and applications, and over 2000 inventions developed in-house. It's a rather staggering amount of intellectual property for a company that itself does not produce any products.

In the process of collecting the aforementioned patents and inventions, Intellectual Ventures has made itself into a grim spectre haunting the tech industry, garnering it's share of bad press over the years, including a segment on This American Life on NPR, which goes so far as to compare Intellectual Ventures to the mafia, engaging in an IP protection racket. CNET describes the company as having a split personality, in which one part resembles a think tank, where people both create and refine new ideas to solve problems large and small, another part is an "altruistic do-gooder," while the final part is the patent-troll side they've been showing us previously.

During the tour of the company, devices are shown off that include everything from a laser-wielding bug zapper to a microscope for early malaria detection. Intellectual Ventures purports to represent the inventors behind these devices and more, while preparing to spin them off into new companies. One such earlier device, a new nuclear reactor, made headlines again recently as Bill Gates has begun investing in it. A second company has also launched recently. Kymeta, which is also funded in part by Gates, aims to improve wireless broadband access using better satellite connections.

While the inventions that are showcased have a serious cool factor about them, there's still the underlying notion that the invention side of the business is funded by their patent-trolling activities. While no one can really fault advances in fighting malaria or polio, for every new idea they have come up with, there are hundreds of shell companies, such as the infamous Lodsys, who do little but stifle innovation in the industry.

Because Intellectual Ventures and its shell companies have no actual products of their own, they're well-suited to the rigors of patent litigation. Most smaller companies aren't designed or prepared for a patent war. When a company is sued for violating one of Intellectual Ventures' patents, that company now has to divert resources away from making its products, and focus on defending its right to make those products. Just the discovery phase of a lawsuit can bring normal work to a halt, or at the least greatly impede forward progress. Since a company like Intellectual Ventures or one of its shell corporations, is prepared for the suit from the beginning, and has nothing to halt production on, they're much better poised to handle the ongoing work of a court case, and begin the case with a distinct advantage.

So after twelve years, 30,000 pieces of various forms of intellectual property, 1300 patent-holding shell corporations, and a network of 3000 inventors, only two companies have been spun off from Intellectual Ventures. That seems like a rather high price to pay, and a recent Forbes story seems to agree. That doesn't even take into account the damage that has been to industry as a result of the numerous patent cases.

In a recent response to company criticism, Intellectual Ventures has been advertising for a newly-created position, the vice president of Global Good. It seems to me that before hiring another suit, they could easily pull from their pool of around 3000 inventors, and have a few dozen or so just say what their potential products are, and how Intellectual Ventures has helped them on the road to market. This wouldn't exonerate Intellectual Ventures from their patent trolling by any means, but it would be a first step in the right direction. CNET wasn't able to talk to any inventors at length during their tour. Most of the images of inside Intellectual Ventures are of empty rooms, where employees either weren't currently working, or were required to be removed entirely. This renders it awfully hard to put a human face on any possible good that may be going on inside Intellectual Ventures. Reading through past Intellectual Ventures press releases doesn't produce any either. What it does provide, however, is a long list of companies that have been forced to partner with or license rights from Intellectual Ventures. Despite any good intentions they may assert, their track record speaks otherwise. Even if you apply the adage that one has to break a few eggs to make an omelet, they've broken tens of thousands of eggs, and made only a few omelets.

A Few More Notes

[eldavojohn]

You forgot to mention that two of the big founders of IV are Nathan Myhrvold and Edward Jung of Microsoft. So yeah when Bill Gates is trying to hook them up with a huge licensing deal or when Gates is pumping money into them, it's a sort of Old Boys network thing going on there. I'm certain that you will find the "two companies" that are spun off as being completely in bed with Microsoft.

So the other thing I'd like to bring up is the This American Life question of IV as to who they've actually helped. And they kept saying the same case: Chris Crawford. But of course, they couldn't get a hold of Crawford, they found out that IV no longer managed it and, in fact, Crawford is in litigation with IV. So basically the one thing that they offered as proof of their purpose was bunk. And then, of course, they stopped talking to This American Life.

Even if you apply the adage that one has to break a few eggs to make an omelet, they've broken tens of thousands of eggs, and made only a few omelets.

Yeah, Microsoft omelets. It's a self-serving shell company that sues the shit out of everyone and forces others into agreements or litigation. They can't even offer up one person that will sing their praises of helping them successfully manage their IP portfolio. And that, good friend, is why they're compared to the mafia.

A "step in the right direction"? You'll excuse my skepticism until I see some results for malaria, polio, and HIV ... even if they can put a dent in those problems while lining their own pockets I'd be impressed. Sadly, the simpler explanation is that they have a very large portfolio and some of these tackle very serious diseases and by holding them up they can justify their lawsuits and patent trolling that is driving the industry backwards!