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$400 Million IP Experiment Making Some Nervous
Posted by
ScuttleMonkey
on Wed Apr 26, 2006 04:08 PM
from the duck-and-cover dept.
from the duck-and-cover dept.
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."
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Nathan Myhrvold and the Business Of Invention 137 comments
elwinc writes "There's a great New Yorker story about Nathan Myhrvold's Intellectual Ventures company, whose business model is to nurture ideas, write patents, and sell them. Apparently they're filing about 500 patents a year including a passive thorium reactor which consumes waste from conventional reactors. On the lighter side, you can read how Nathan has achieved 'dominant T. rex market share.'"
Though we've discussed Myhrvold and his company in the past, the New Yorker focuses more on how incredible it is to have a group of very intelligent people sitting around a table developing ideas.
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I knew I should have patented... (Score:4, Funny)
Re:I knew I should have patented... (Score:5, Interesting)
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.
Parent
Decent points, but (Score:5, Insightful)
NB:
-If the invention is, e.g. "one-click shopping" the public will reply "who gives a fuck?! duh!" Hence the non-obviousness requirement.
This is why patent-trolling is not just name-calling. Many companies (and here it seems we have the epitome) have, as their business model, making-it-impossible-for-others-to-do-their-work-w ithout-paying-us-a-fee.
Patents are supposed to be about collecting-a-fee-for-helping-others-do-their-work- better. In particular: helping them do it better in a way they might never have imagined.
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Re:Decent points, but (Score:3, Insightful)
And now "imagining" means "purchasing". In no way, shape, or form should patents be assignable to a third party. The potential for abuse has already been realized in the courts again and again.
Just look at the name of the company. They were set up, specifically to be a patent troll. Obviously the companies in question figure half a billion dollars is chump change in return for what they can get with just a few "settlem
Re:I knew I should have patented... (Score:3, Insightful)
Patents are "supposed" to be used for exactly what we the people decide they should be used for. They are an artificial temporary monopoly that WE citizens have agreed to allow (through our representatives) in exchange for the economic benefit that goes along with the monopoly. That benefit is a window of opportunity to recoup the investment in R&D used to create
Re:I knew I should have patented... (Score:5, Funny)
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For the better, no doubt (Score:5, Insightful)
Re:For the better, no doubt (Score:5, Insightful)
Not that soon, I think... but eventually it might.
Right now, too many too powerful have too much to lose should the status quo change.
Parent
Re:For the better, no doubt (Score:3, Insightful)
If by "everyone" you mean "established monopolies"... Say Apple and Microsoft agree to play together. With their pooled resource they have "a system of libraries for a graphical user interface that allows other applications to run" patented. Who is going to be able to challenge them in their markets? Or what if GSK patents "a system for cloning brain cells", even though they don't have the technology or products develope
net here! (Score:5, Informative)
Re:net here! (Score:3, Insightful)
I mean, the attempt alone to push it through as a sidenote in the fishing committee... Fishy doesn't even come close to how that reeked.
Re:net here! (Score:3, Informative)
That is incorrect. (Score:5, Informative)
In fact, they were recently held as a 'good example' by the FFII.
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Patent Bashing (Score:5, Insightful)
Re:Patent Bashing (Score:4, Insightful)
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IP is the oil of the information age (Score:5, Insightful)
Just like skyrocketting oil prices have convinced politicians on the need for alternative energy sources. Sure an economic standstill works, but it's horribly painful for everybody (except for those who are profiting short-term).
What is really needed is an education effort on IP reform. Not just for the politicians, but for the public at large, so they can elect forward thinking leaders.
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Re:Patent Bashing (Score:3, Insightful)
On the contrary; maybe having the economy dragged to a standstill is the only way to let the politicians realize the folly of the 'everything's patentable' world. If it would lead to change, the temporary stagnation might be worth it.
The way I see it, without this whole IP/patent business, the situation is as follows:
Their "ambition" will undo them (Score:2)
Re:Their "ambition" will undo them (Score:3, Insightful)
I want to be a scientist know... (Score:5, Funny)
Sign me up!
International Impact (Score:5, Insightful)
Imagine in 10-20 years, China becomes the biggest economy in the world, it ignores all the US patents, and just use those patents to roll out their own products.
For example, a patented medicine sold by an US company to Africa at $10 per bill, and the same "Made-In-China" pill cost $0.01, what is to stop Africa from buying from China instead?
Right now US is still powerful enough so that other countries must agree to certain rules/laws made in USA, in exchange for free trade deals, but when that strength faded, so will the leverage.
I draw this opinion from the recent, possible change of international whaling law, where Japan is about to gather enough votes to start commercial whaling again. So what is deemed illegal in the last few decades will soon become acceptable when the power shifted.
Re:International Impact (Score:5, Insightful)
Since software is often not a real product (it's a tool that is used to make other products), this could have a serious effect on the US economy. In the worst case, this would start happening to Free Software - it would be free-beer for any non-US company to use, but cost money for the patent license in the USA.
Parent
Re:International Impact (Score:3, Interesting)
To all the naysayers, this already happens. A company I worked for in the mid-90's decided to stay out of the US market and concentrate on China instead after receiving a threat of a patent lawsuit from one of our competitors. The idea was obvious, and we'd actually implemented it before the US based patent holder, but it wasn't worth fighting it.
Re:International Impact (Score:3, Insightful)
Excuse me? What, exactly, have we been talking about for the past 11 years then? See: http://cloanto.com/users/mcb/19950127giflzw.html [cloanto.com] and http://burnallgifs.org/archives/ [burnallgifs.org] for some background. Also see: http://swpat.ffii.de/pikta/xrani/mpeg/index.en.htm l [swpat.ffii.de]
Hell, for a more generic discussion see: http://www.bitlaw.com/software-patent/history.html [bitlaw.com]
(Score: 3, interesting) my A$$. Should be (Score: -1, wrong)
Re:International Impact (Score:3, Informative)
You mean like the US did a couple of hundred years ago ?
Same thing that happened then - you end up with a new world power.
Re:International Impact (Score:3, Informative)
However, American publishers continued to regard the work of a foreign (i. e., non-resident) author as unprotected 'common' property. Thus, although the Berne Convention greatly simplified the copyright process among European nations, numerous unauthorized American re-prints continued to appear until 1891, when the United States finally agreed to discontinue sanctioning literary piracy. In 1896 the American Congress joined the international copyright union, after petitions directed at it by such noted Brit
obligatory... (Score:2, Funny)
All your base are belong to us...
In soviet russia, parents patent you.
Political Leverage (Score:5, Interesting)
It should be easy to figure out. (Score:5, Insightful)
Anybody who has been throught the early years of Microsoft's war on the IT industry knows what kind of a person he is. Suffice it to say he is not a nice guy trying to make the world a better place.
Here's how it works (Score:5, Interesting)
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.
Re:Here's how it works (Score:5, Interesting)
I find it hard to believe this troll group will be used for the evil people seem to be claiming. More likely, it will be used as a massive reserve for defensive patents. Much like a defensive alliance between nations, you won't see members picking fights and suing people actively, but instead the group exists to allow for a collective means to *defend* from REAL patent trolls.
Parent
Re:Here's how it works (Score:3, Interesting)
Making money off patents casts you as a pariah in the business community.
Is IBM a pariah? IBM makes more than $1B per year from patent licensing.
Open Source comanies are doing basically the same (Score:4, Informative)
Back in January, Red Hat reversed a longstanding policy and allowed the Mono
We missed it at the time, but Fedora hacker Greg DeKoenigsberg posted an explanation in late March. The answer, as it turns out, may offer some clues of how the software patent battle might play out.
Back in November, the Open Invention Network (OIN) announced its existence. OIN is a corporation which has been set up for one express purpose: to acquire patents and use them to promote and defend free software. The OIN patent policy is this:
Patents owned by Open Invention Network will be available on a royalty-free basis to any company, institution or individual that agrees not to assert its patents against the Linux operating system or certain Linux-related applications.
The list of "certain Linux-related applications" is said to exist, though it has not, yet, been posted publicly. But Mono is apparently on that list. So anybody who files patent infringement suits against Mono users, and who is, in turn, making use of technology covered by OIN's patents is setting himself up for a countersuit. Depending on the value of the patents held by OIN, that threat could raise the risk of attacking Mono considerably.
Parent
Patent Companies & Patent Auctions (Score:3, Informative)
If you are in the mood to swallow some Grade A tripe, check out their business plan [intellectualventures.com].
1. Invention Labs.
2. Invention Research & Development.
3. Invention Library (tm).
4. Market Enablement.
5. Profit!
By the way, the "tm" after the Invention Library means trademark. Yes, they've even patented terms in their business plan.
Hold that thought (Score:5, Funny)
'They can't be screwing around with a bunch of ideas for that long,'
Why not? I've been screwing around with the idea of screwing around with multiple hot chicks since I can remember. Wish I could get a patent on that.
Re:Hold that thought (Score:5, Funny)
Now that's one case where I really wish I had prior art...
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been here before (Score:5, Insightful)
Maybe we'll have the same corrections this time but without the economic collapse. Did I just suggest we've learned anything from the past? Very sorry, I'll stop now.
DDOS on USPTO (Score:4, Interesting)
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.
Paper or plastic? (Score:3, Interesting)
Now, if you could figure out how to turn other people i
My understanding of IV (Score:5, Interesting)
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.
Let's see this for what it is, shall we? (Score:5, Insightful)
Re:Let's see this for what it is, shall we? (Score:3, Insightful)
Video Interview with him on CNET (Score:4, Interesting)
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.
Some useful links (Score:3, Informative)
http://en.wikipedia.org/wiki/Abstraction_physics [wikipedia.org] Yeah, its up for deletion but that doesn't invalidate it. But its really not original research either.
http://developer.osdl.org/dev/priorart/wiki/index
Patent upfront costs: technical-0, legal -lots (Score:3, Interesting)
If you are an IP lawyer with not much technical skill, its ok if your idea isnt really new. It does not cost you much to submit more than one application, and the wording on some makes it new. But that is determined later. You have low upfront cost.
Re:No wonder some are nervous! (Score:2, Insightful)
They are proposing adding a 5th octet as an interim move until v6 is widely adopted.
That doesn't sound far off from what they're trying to do: patent every neat idea they can. "Hey! A fifth octet. IPv5! V5... hey! Patent a 5 cylinder internal combustion engine! {repeat ad infinitum}"
Re:why would they do that? (Score:4, Funny)
Parent
It's just not one big player (Score:5, Insightful)
On the face of it, this sounds advantageous. It allows more cool features in processors and alleviates those three companies from having to worry about getting involved in frivolous lawsuits with their main competitors.
Now perhaps Intel patented the XOR operation. Sure the patent is blatantly unfair, but since IBM and AMD can already use it then they have no need to fight intel's patent. THe only person who would want to fight it would be some new player in that space, but who'd have the resources?
If large corporations start broadly cross-licensing technologies then it'll effectively kill the little guy and sew up the market.
Parent
Patenting XOR: It's Been Done (Score:3, Interesting)
Re:Prior Art -- the Untouchable IP (Score:3)