Bonum Certa Men Certa

Microsoft-funded and Microsoft CTO-Founded Intellectual Ventures is Feeding Patent Trolls, USPTO Ridiculed

Nathan Myhrvold



Summary: A nice investigation into the modus operandi of the world's biggest patent troll and new examples of the embarrassments over at the USPTO, which just lets it all be as it's profitable to patent examiners and lawyers

Intellectual Ventures claims not to sue companies, but reports suggest that it is surrounded by 1,000+ 'sibling' companies which sometimes do the lawsuits without bringing Intellectual Ventures into the courtroom. Intellectual Ventures is essentially like the Mafia Don, extorting companies and 'punishing'/retaliating against (suing) them via third parties if they do not comply. MPEG-LA has a similar mechanism going on.



Here is the latest example of Intellectual Ventures feeding a Troll Du Jour LLC, who in turn uses this feed to sue real companies with real products and value to society:

That's the proposition Webvention LLC—which acquired U.S. Patent No. 5,251,294 from patent-hoarding giant Intellectual Ventures last year—has been making to scores of companies in a bid to license its little piece of IV, according to a pair of declaratory judgment lawsuits filed recently in federal district court in Delaware.

[...]

What makes the suits by Tenneco and Novartis particularly intriguing is that they offer the opportunity to read Webvention's demand letters, which are attached as exhibits in both instances.

[...]

It's unclear whether any of the licensing revenue Webvention is generating will go to Intellectual Ventures. The Seattle-area company began selling off some of its tens of thousands of patents last year, and under the terms of some of those deals gets a cut of whatever revenue the patents bring in. The measures that Webvention's owners have taken to shield their identities—setting up shell companies in both Delaware and East Texas—suggest that IV may well have a piece of the action. It's also worth noting that some of the companies that Webvention claims have taken licenses—including Google and Nokia—are known to have licensing deals with or be "investors" in Intellectual Ventures, meaning they may have licenses to many patents that held by IV now or in the past.


"The article informs us that Webvention got this patent from Intellectual Ventures last year," says Groklaw. Is this the future of the US patent system? That's just sad. Dennis Crouch from a patent lawyers' blog rejects the claims of reduced standards at the USPTO (surprise, surprise). For context:

Earlier this week, I wrote about the dramatic increase in the number of patents being granted in calendar year 2010 as compared with prior years. [Link] Several outlets expanded upon my report and condemned the USPTO based on a conclusion that the higher issuance numbers must have resulted from reduced examination standards.


Microsoft's to-do list patent, which we mentioned here a few days ago, got Groklaw's attention and Pamela Jones responded by writing: "Excuse me, but is that a specific machine? Is it abstract? Is it math? A to-do list? I mean, come on, USPTO. It's an invention because it's on a general use computer, a to-do list? You do realize they will now go around trying to get money from anyone with a to-do list? What were you thinking?"

There may still be an opportunity to change all of this:

Bilski and the US Software Patent Threat: The ball is back in the court of the US Congress: http://t.co/dEc4tmn @jordanhatcher


As pointed out in the previous post, Europe is not without its rogue patent elements (often patent lawyers or other representatives of monopolists). James Love, the Director of Knowledge Ecology International, says:

Europe fought to include patents in ACTA. Now patent damages must consider suggested retail price of infringed patented good.


Love has also been commenting on ACTA effects on life and death -- a subject that Dana Blankenhorn alludes to in this new post where he contrasts deadly patents with software patents.

But pharma patents and copyrights, unlike software patents and copyrights, carry risks which the Meredia case illustrates. Drugs can be found to be dangerous years after their introduction, creating unexpected liabilities.


Actually, software patents too may lead to unexpected liabilities, albeit of a different kind.

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