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Does Recent Goodwill Undo Years of Patent Trolling For Intellectual Ventures? 90

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.

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

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  • by mspohr ( 589790 ) on Friday August 24, 2012 @02:01PM (#41112481)

    They are a classic monopolist. They use government regulations (patents) to gain monopoly control and extort payments from everyone else. In order to assuage their guilt, they develop some "good causes". Of course, the good causes they choose are idiosyncratic and based on their own value system and not necessarily something that society would have done with the money had they been allowed to keep it in the first place.

    Andrew Carnegie is an earlier example of this. He was a ruthless businessman who built a steel monopoly and benefited greatly from government regulations (which he tailored to his needs) and used unsavory methods to put his competitors out of business. He also ruthlessly exploited his workers (see: Homestead strike). Later in life he felt Christian guilt and gave away his money (I guess he figured out he couldn't take it with him) to libraries, schools, churches (he was very big into church organs).

    I personally think it is better to have society as a whole determine what to do with resources rather than have government empower individuals to amass great wealth and have those individuals spend it on their pet projects.

  • Re:No (Score:4, Interesting)

    by AliasMarlowe ( 1042386 ) on Friday August 24, 2012 @02:14PM (#41112631) Journal

    Exactly. In fact, there's even a law which says so. Betteridge's Law of Headlines [wikipedia.org] states that any headline which asks a question can be answered with "no". The headline of TFS provides a perfect example.

  • by Khopesh ( 112447 ) on Friday August 24, 2012 @02:22PM (#41112741) Homepage Journal

    Lots of companies struggle quite a bit to get proper branding and good press. It's really really hard, and often difficult for executives to understand the investment effort it requires. This leaves us in a pickle with Intellectual Ventures, because it's hard to even understand whether they are the "good guys" they purport to being.

    Maybe it would make sense for them to state some policies on what they will and will not pursue when it comes to their IP enforcement team (trolls). If they really want to push for innovation, they could make a statement like that they will never pursue use of their patented mechanisms in GPL-compatible software.

    I mention the GPL rather than OSI-approved because the GPL's clauses prevent closed-source derivatives, which ensures profitability of salable goods derived from such things. This model was quite successful (read: profitable) for Qt (before Nokia relicensed it LGPL).

    Permitting and encouraging Free Software stimulates innovation. It would likely also lead to derivative patents, which (assuming they share them appropriately) would be mutually beneficial to the F/OSS developer and to Intellectual Ventures.

    Of course, this is assuming software patents aren't stricken down, which would be better for everybody except Intellectual Ventures.

  • Re:Nathan Myhrvold? (Score:5, Interesting)

    by Nemesisghost ( 1720424 ) on Friday August 24, 2012 @03:15PM (#41113305)
    I totally agree. If he was all about making sure that the disenfranchised inventors like Tesla don't get bullied by the Edison's of the world, then why the hell is he one of the Edison's? Why is he making money off of the lawsuits his company wages against people? I don't see him any different than the RIAA in suing people so that they can "pay" their artists. If it was all about the inventors/artists then more of the litigation & licensing money would go towards the inventors/artists and these leach companies would die of their own altruism.
  • Re:Nathan Myhrvold? (Score:4, Interesting)

    by Peristaltic ( 650487 ) * on Friday August 24, 2012 @05:15PM (#41115155)

    Of note is how Myhrvold has applied his substantial intellect to rationalizing his behavior- a pity such superb intelligence exists side-by-side with such sub-par ethics.

    “There were moments when he looked on evil simply as a mode through which he could realize his conception of the beautiful.”

    Oscar Wilde

10.0 times 0.1 is hardly ever 1.0.