Contract Dispute Reveals That Intellectual Ventures Paid Consultant To Get Unions To Fight Patent Reform

from the well-look-at-that dept

It’s often interesting what turns up in lawsuits. A few years ago, in the middle of yet another political fight over patent reform, lots of people were surprised when all the major unions suddenly stepped up as being against patent reform. As we pointed out at the time, their arguments made no sense at all. Of course, also notable at the time was the fact that frequent Techdirt commenter and “all patents are perfect” supporter Ronald J. Riley claimed credit for getting the unions to come out against patent reform. This left us scratching our heads a bit, but perhaps it was true.

Turns out there was a lot more going on behind the scenes, and it wasn’t Riley’s tortured logic after all, but giant patent hoarder Intellectual Ventures throwing its weight (and cash) around. Joe Mullin points us to a blog post from the “Gametime IP” blog, which discusses a lawsuit filed against Intellectual Ventures by Pat Choate, who worked for Intellectual Ventures on a contractual basis — and who also was on the “advisory board” of one of Riley’s many “organizations.” The full filing is embedded below.

Choate had written a book all about how lovely and wonderful the patent system is, and so Intellectual Ventures started chatting with him. Eventually, they asked him to head a project to stop patent reform, with part of the strategy being: get unions to oppose patent reform. As part of this, Choate was to be paid $30,000 a month. They also asked him to try to keep Intellectual Venture’s involvement in derailing patent reform quiet, since top investors in IV, such as Bill Gates, supported patent reform.

The filing reveals that Choate took part in Congressional briefings organized by Intellectual Ventures, though it’s unclear if those he met with knew whose payroll he was on. However, a big part of the strategy, dubbed “Plan B,” was for Choate to use his influence with unions to have them oppose patent reform, even though the current patent system hurts the American economy and makes us less competitive (thereby hurting unions):

As agreed by Choate and Harter, Choate’s role was to devise strategy and tactics, perform analysis, serve as an expert witness, and educate opponents of the legislation about its nuances. Because of Choate’s long-standing relationship with organized labor, Harter and Choate agreed that a primary focus of Choate’s efforts on behalf of Plan B was to work with organized labor to educate union leadership about the legislation and its harmful impact on job creation, and to facilitate union opposition against it.

That was in May of 2007. The union announcement was in August of 2007. So, basically, IV paid this consultant $30,000 a month to get unions (who really should know better) to oppose patent reform, and he succeeded. The dispute, by the way, is because Choate claims that IV promised to pay him for two more years at one point, and after Congress watered down the Patent Reform Act to make it less than worthless, IV changed its position and began supporting the current bill (as if you needed any more evidence that the Patent Reform Act won’t improve the system…). Choate wants all the money he believes is owed to him. I’m indifferent on the actual dispute, but interesting to see a bit of the cigar chomping backroom dealings come out in the sunlight.

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Companies: intellectual ventures

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Comments on “Contract Dispute Reveals That Intellectual Ventures Paid Consultant To Get Unions To Fight Patent Reform”

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Jose_X (profile) says:

Union members suffer

“We” need to write to unions explaining the many ways monopolies hurt fair jobs.

First, we cannot forget that each and every single union worker is a consumer. Higher prices and fewer choices (where patents lead to this, assuming in at least some cases, to be argued independently) from products used in this nation means we all have fewer choices and higher prices. This cuts into our standard of living and our real wages. Look at the example of that drug recently taken off the market in order for a single firm to have a monopoly, leading to over a hundred-fold rise in price.

Second, for various reasons, patents are largely owned and/or exploited by the wealthiest (and their controlled corporate proxies). These are not hands on the union side but belong to those across the table. This means one more powerful lever being used against union workers in negotiations.

Third, even when some classes of workers end up with patents, they frequently lose out on all the profits and control. Cumulatively, even if a worker has a patent and can use the invention away from the company, supporting patents means that a great many thousands of other “monopolies” are now out of your reach for every single such “monopoly” that worker may have. And who are we kidding? Most union workers really have never gotten even one patent.

Fourth, a society that does not leverage each other ends up stifling. This means an increasing percentage of US patents will be owned by foreign firms who got to future inventions first because those firms were allowed at home to leverage each other and the inventions of other nations.

Fifth, the US firms will lose international revenues when other nations manage to give their patents primarily to home-grown firms. This is coming about from efforts of the US to push patent rights abroad.

Sixth, it is rather unethical to support the abridgments that come with some of these patents. When few union members might not ever build a large manufacturing plant, they might not care, but for items like software and other creations of information content, this will surely impact them much closer to home.

Other arguments apply more to small and medium sized firms and their non-union employees, but even with just these examples, we see that creating a bunch of monopolies hurts society in many ways. And some of these monopolies are much more damaging than other types (eg, software is information/virtual and requires lots of cooperation to build complex advanced safe systems).

Comboman (profile) says:

Re: Union members suffer

Keep in mind that unions are a monopoly on labor in the same way patents are a monopoly on design and copyrights are a monopoly on art. I can’t work in many industries without joining a union and paying dues, just like I can’t produce many products without paying a patent troll. Unions were created out of the same protectionist, anti-competition mindset that patents and copyrights are, so in many ways, unions are the natural allies of patent trolls.

Anonymous Coward (profile) says:

Obvious anti-patent bias, again

Hi Mike,

It’s your friend Anonymous again. As usual, you’ll see me calling you out when your anti-patent bias is so blatantly obvious that even a dummy like me can spot it:

“the current patent system hurts the American economy and makes us less competitive (thereby hurting unions)”

I’m guessing that you really meant to say something like:

“the current unionized labor system hurts the American economy and makes us less competitive (thereby hurting Americans”

Or you can explain how unions make us more competitive.

CommonSense says:

Re: Obvious anti-patent bias, again

“Or you can explain how unions make us more competitive.”

Well, that’s easy. He never said that unions make us more competitive. The connection was, if the American economy was hurt, Unions would be hurt. He never even hinted that unions make us more competitive.

Next random leap off topic??

Anonymous Coward says:

Re: Re: Obvious anti-patent bias, again

The point is it just doesn’t matter. No matter how much or how little patents you have, the US won’t get out of it’s current mire until the people are willing to work for wages that make US industry competitive.

At this point, it is still way cheaper to take the raw materials, ship them to the other side of the world, have the processed, creating finished goods, and shipping those goods back half way around the world to sell – and they are still a much lower price that the US made goods would be.

That isn’t about patents, that isn’t about copyright, that isn’t about anything else other than greedy workers who think that their job is worth $XX an hour when the rest of the world will do it for $X.

Patents aren’t hurting the US. Union labor and the expectation of pay as a result is hurting the US.

Jon Lawrence (profile) says:

Re: Re: Re: Obvious anti-patent bias, again

You mean the workers who, on average, earn less now than they did in 1979? The bottom 80% of working people who’s percentage of net wealth has fallen steadily since the 80’s? (

While CEO pay has risen over 298% just since 2005? Hm, I wonder what costs are making us uncompetitive?

The Devil's Coachman (profile) says:

Re: Obvious anti-patent bias, again

Your own choice of words, “a dummy like me”, is a mere shadow of the awful truth. Believe me, it doesn’t even begin to describe your cognitive disabilities, and the more you prattle here, the more obvious it becomes. If I were you, I would block this site and remove the temptation to come here and demonstrate to the world how sparsely populated your cerebrum is. Really, you need to give this some more thought, that is, if you are actually still capable of thinking.

staff says:

cigar chomping

“cigar chomping backroom dealings come out in the sunlight”

Undoubtedly many parties have different interests and they are looking to protect them. The interests of some are more narrow than others and therefore they will push to enact laws which on the whole disadvantage the many for the benefit of the few. What would be most entertaining would be to see who has been greasing the palms of Senator Leahy and others who have been eager to do the bidding of large multinationals who are attempting to tilt the laws so as to legalize theft of their small competitors inventions.

Just because they call it ?reform? doesn?t mean it is. Patent reform is a fraud on America. This bill will not do what they claim it will. What it will do is help large corporations maintain their monopolies and kill their small entity and startup competitors (which is exactly what they intended it to do) and with them the jobs they would have created. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, ?startups aren?t everything when it comes to job growth. They?re the only thing.? This bill is a wholesale slaughter of US jobs. Those wishing to help in the fight to defeat this bill should contact us as below.

Small entities have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors. Yet small entities create the lion’s share of new jobs.

Please see for a different/opposing view on patent reform.

jcar2 (profile) says:

Time to learn more - this ain't about unions

What’s frightening to me, and likely many other FOSS supporters, is the general lack of knowledge regarding software patents and why they are bad for absolutely EVERYONE.

Letting this conversation become sidetracked by discussing the pros and cons of unions is not productive. There is a huge need for voters to be more vocal about the need to divorce patents from software. Software is already copyrighted, there is no need for patenting it.

The idea of Intellectual Vultures paying someone else (whether it’s unions or Congressmen) to help tilt the playing field towards their own interests is not new. Nor is Bill Gates’ supposed ‘support of patent reform’ anything more than lip service.

There is so much more to this story, and it isn’t about unions, it’s about patent trolls and legalized extortion.

Here are some good starting places to begin learning why software patents are just plain wrong.


Here are a few easy-to-understand summaries from the FSF:

And here’s an article about Donald Knuth’s letter to the US Commissioner of Patents and Trademarks in 1994. It’s well worth reading:

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