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Researchers discovered how Intellectual Ventures made Patent Trolls

Wanted PatentsIn this day and age it is important to protect both intellectual and physical property by obtaining patents. With larger businesses these patents are often infringed upon by competition and that then sparks a lawsuit in which the situation is resolved. Unfortunately, the overabundance of patents has made it treacherous grounds for any company and one business, known as Intellectual Ventures, makes it their mission to obtain patents and to gather money by suing all who have infringed upon it, Business Insider reports.

While many would agree that everyone has a right to protect their ideas and inventions, the problem with patent trolls is that these patents are on such minute features that it becomes almost laughable – though I’m sure the company being sued wouldn’t agree. Since the nature of the patents are often really trivial in nature the term “patent troll” is often applied to those companies and individuals who excessively exercise their patent rights. So what exactly is Intellectual Ventures doing patent trolling? Let’s find out!

Intellectual Ventures was established about ten years ago by Nathan Myhrvold (Former Microsoft tech. chief). It makes its money by obtaining patents then getting settlements and fees paid to them by other companies. In the beginning this company was quite mysterious, but only recently has their true nature and their investors been uncovered. Below is a list and explanation of some of the information uncovered about this secretive company.

– Investors – some of the investors backing this company are the largest in the electronic world including (but definitely not limited to) Apple, Microsoft, Sony, and more!

– Number of patents – while this number is a wide variation it is estimated that Intellectual Ventures holds between 30k-60k patents. Additionally very few patents were invented by them, most were acquired.

– Shell companies – rather than expose themselves directly through the legal pursuits of the patents  IV would assign various patents to “shell” companies of which there is estimated to be well over 1.2k

– Big investors – mentioned earlier IV has some big companies backing it. What these companies will do is use it as a way to defend themselves. One instance is when Verizon gave IV $350. This happened when TiVo sued Verizon for a patent infringement but since Verizon had a patent purchased from a shell company of IV; Verizon claimed that they TiVo infringed upon their newly bought one – this resulted in a counterclaim on TiVo by Verizon.

– Patent acquisition – rather than develop their own patents Intellectual Ventures purchases patents (mostly foreign ones) from smaller companies for a one-time fee as well as a percent of any profits.

Despite how comical the term patent troll is Intellectual Ventures is anything but funny. Their methods are looked down upon by many, but the biggest companies in the business turn to them for patent protection and they are one of the largest patent holders in the world. They simply take advantage of an opportunity that was already there and they are not alone in this patent trolling business.

One Comment

  1. Dump Site

    Verizon is a troll. Contrary to how Verizon’s general counsel, Miltch, talks they are investor in Intellectual Ventures. Miltch rails on about trolls in his NYT op-ed piece but Verizon collects $$M from all the IV shakedowns becausde they are an investor in IV.

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