Summary: Nathan Myhrvold comes under fresh fire as Lodsys ruins the industry; Icahn is said to be preying on Motorola for its patents
There’s a column doing the rounds at the moment that is generating some interest. It comes from the King of the Patent Trolls, Nathan Myhrvold.
We wrote about this before. It is one of the most abominable operations in the United States and it causes great harm to the US economy. Well, the Bill Gates-funded NPR has just written about Bill’s mate, Nathan, the world’s biggest patent troll. It is not exactly flattering. It says that “80 percent of software engineers say the patent system actually hinders innovation.” About Nathan’s racket it says (Nathan’s cartel disagrees after Microsoft’s booster Todd Bishop “reached out to the company”):
The influential blog Techdirt regularly refers to Intellectual Ventures as a patent troll. IPWatchdog, an intellectual property site, called IV “patent troll public enemy #1.” These blogs write about how Intellectual Ventures has amassed one of the largest patent portfolios in existence and is going around to technology companies demanding money to license these patents.
Patents are a big deal in the software industry right now. Lawsuits are proliferating. Big technology companies are spending billions of dollars to buy up huge patent portfolios in order to defend themselves. Computer programmers say patents are hindering innovation.
But people at companies that have been approached by Intellectual Ventures don’t want to talk publicly.
“There is a lot of fear about Intellectual Ventures,” says Chris Sacca, a venture capitalist who was an early investor in Twitter, among other companies. “You don’t want to make yourself a target.”
Sacca wouldn’t say if Intellectual Ventures had been in contact with any of the companies he’s invested in.
One former IV patent was used by an NPE to sue 19 different companies, a broad assortment that included Dell, Abercrombie & Fitch, Visa, and UPS.
These companies all have websites where, when you scroll your mouse over certain sections, pop-up boxes appear. The NPE said, “We have the patent on that.” Which would make pretty much the entire Internet guilty of infringing the patent.
Another group of former IV patents is being used in one of the most controversial and talked about cases in Silicon Valley right now. An NPE called Lodsys is suing roughly three dozen companies developing apps for the iPhone and for Android phones. Lodsys says it owns the patent on buying things from within a smartphone app.
One interesting wrinkle about that case: The address for Lodsys is 104 E. Houston street, Marshall Texas, suite 190. The same exact address, down to the suite number, as Oasis Research.
It now turns out that this patent troll is suing the company best known for Angry Birds. The nature of the patent is unbelievable and Charles writes about vital context:
The makers of the Angry Birds app are being sued by a tiny American company which claims it owns patents on the method used to buy new levels inside the game – a move which has already put off a number of UK developers from selling mobile apps in the US.
Lodsys, apparently a one-man company based in Marshall, Texas, has named Finland’s Rovio in a patent lawsuit in a Texas court, and has also begun suing some of the biggest names in mobile gaming, including Electronic Arts, Atari, Square Enix and Take-Two Interactive.
The growth of lawsuits in the US by so-called “patent trolls” – which do not make anything but simply demand payments after asserting intellectual property rights – threatens to snuff out the booming mobile app market, which is expected to be worth £4.5bn this year and double that in 2012. A number of patent-owning companies have begun lawsuits in the US against more than a dozen software companies. However, many small independent developers find the costs of a lawsuit too onerous, even given that they could run into thousands of dollars.
Professor Webbink outlines the outrageous actions of Lodsys. “So the allegations of infringement and basis for infringement are all over the place,” he notes, “covering different fact patterns, in each of these. As a consequence, it will be hard to maintain these as just four actions. Defendants will insist that they be divided. It will continue to be interesting to see how this plays out.”
In side news, yesterday in IRC we began having a discussion trying to figure out if vulture investor Icahn is after Motorola for its patent or the Microsoft patent case over Android. Someone presented some evidence, but it’s work in progress. █