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"IV was originally created as a "patent defense fund," getting investment cash from big Silicon Valley companies like Google, Apple, and Cisco. Soon, IV moved i

by jobu 12y ago

"IV was originally created as a "patent defense fund," getting investment cash from big Silicon Valley companies like Google, Apple, and Cisco. Soon, IV moved its focus to patent enforcement, and the firm is generally disliked in Silicon Valley." "Disliked" is certainly an understatement. It's interesting though, in all of the coverage of Intellectual Ventures nefarious court adventures I've never heard it reported that they started out as a patent defense fund. Is that really true?

slacka 12y ago
Yes, it's true. Patent defense is why Google initially invested. However, once they started enforcement, Google withdrew all further support.[1] [1] http://www.geekwire.com/2014/apple-microsoft-patent/ http://www.geekwire.com/2014/apple-microsoft-patent/
azakai 12y ago
It may have described itself as a "patent defense fund", and that technically might not have been a lie, with some twisting of the meaning of words. However, what was going on was that people paid IV, and in return got protection from being sued over patents. The only way that can work is either 1. You are paying to avoid being sued by IV, or 2. You are paying for IV to protect you from being sued. In the first case, it's nothing more than a license fee, i.e., paying to avoid enforcement against you. In the second, IV can only protect you by cross-licensing patents or through assertion of its patents, so it's the same as 1 but with the threat against someone else. To my knowledge 1 was the only thing done in practice, so IV was just like any other non practicing patent-holding entity, except for the "innovation" of aggregating massive amounts of patents all in one place, and claiming to have no interest in actually suing people - instead expecting everyone to happily pay them. I doubt many people actually believed that they would never sue anyone, and indeed, shortly after that claim the lawsuits started. I don't think there was ever a doubt IV was a patent troll. Just bigger, and with some attempt at good PR.
- thrillgore 12y ago
  That sounds a lot like racketeering.
Dwolb 12y ago
The story I'm familiar with characterizes IV's business model as a way for firms to trade off the volatility of the pay-off for R&D work for a steady stream of recurring payments (or 1 lump sum). Through further analysis of the business model/incentive structure it's then not difficult to see that IV was always destined to become a patent troll. One key issue IV always had was scaling. How could you scale a business based on technical patents without incurring linearly increasing labor costs? Well, you seek out activities that yield the biggest bang for your buck. In other words, opportunistically target companies for a patent troll shakedown.
throwawaykf05 12y ago
In a past life, in the course of work I occasionally happened to hang out with experienced licensing executives. They were discussing Intellectual Ventures at one point (and this is 2007 or so), and apparently in those days IV claimed they would monetize patents without litigation. These executives sorta laughed at this, seeing it as a rather naïve hope. Their reasoning was pretty straightforward: there are always companies whose default response to licensing negotiations is "fuck off", and patents being essentially just a right to sue, litigation was inevitable. IV did go 10 years before beginning suing, but as was predicted, it did eventually happen.

by jobu 12y ago

slacka 12y ago

Yes, it's true. Patent defense is why Google initially invested. However, once they started enforcement, Google withdrew all further support.[1] [1] http://www.geekwire.com/2014/apple-microsoft-patent/ http://www.geekwire.com/2014/apple-microsoft-patent/

azakai 12y ago

It may have described itself as a "patent defense fund", and that technically might not have been a lie, with some twisting of the meaning of words. However, what was going on was that people paid IV, and in return got protection from being sued over patents. The only way that can work is either 1. You are paying to avoid being sued by IV, or 2. You are paying for IV to protect you from being sued. In the first case, it's nothing more than a license fee, i.e., paying to avoid enforcement against you. In the second, IV can only protect you by cross-licensing patents or through assertion of its patents, so it's the same as 1 but with the threat against someone else. To my knowledge 1 was the only thing done in practice, so IV was just like any other non practicing patent-holding entity, except for the "innovation" of aggregating massive amounts of patents all in one place, and claiming to have no interest in actually suing people - instead expecting everyone to happily pay them. I doubt many people actually believed that they would never sue anyone, and indeed, shortly after that claim the lawsuits started. I don't think there was ever a doubt IV was a patent troll. Just bigger, and with some attempt at good PR.

thrillgore 12y ago
That sounds a lot like racketeering.

Dwolb 12y ago

The story I'm familiar with characterizes IV's business model as a way for firms to trade off the volatility of the pay-off for R&D work for a steady stream of recurring payments (or 1 lump sum). Through further analysis of the business model/incentive structure it's then not difficult to see that IV was always destined to become a patent troll. One key issue IV always had was scaling. How could you scale a business based on technical patents without incurring linearly increasing labor costs? Well, you seek out activities that yield the biggest bang for your buck. In other words, opportunistically target companies for a patent troll shakedown.

throwawaykf05 12y ago

In a past life, in the course of work I occasionally happened to hang out with experienced licensing executives. They were discussing Intellectual Ventures at one point (and this is 2007 or so), and apparently in those days IV claimed they would monetize patents without litigation. These executives sorta laughed at this, seeing it as a rather naïve hope. Their reasoning was pretty straightforward: there are always companies whose default response to licensing negotiations is "fuck off", and patents being essentially just a right to sue, litigation was inevitable. IV did go 10 years before beginning suing, but as was predicted, it did eventually happen.