Nathan Myhrvold's Bait And Switch Plan On Patent Hoarding

from the can-you-say-greenmail? dept

We've written about Nathan Myhrvold's dangerous plans to put hundreds of millions of dollars into hoarding patents many times before. Business Week is now running yet another article that tries to get to the heart of Myhrvold's plans -- though his company, Intellectual Ventures is being quite secretive. The article does discuss his "invention sessions" where he brings together a bunch of smart folks to brainstorm -- where the whole conversation is recorded and monitored by patent lawyers looking for anything they can file patents on. However, what's much more interesting is the story of how Myhrvold pulled a total bait-and-switch on the many big tech companies who represent his investors. The original business plan for Intellectual Ventures was to create a "Patent Defense Fund." The idea was to buy up all the available patents from the bursting dot com bubble and offer to license it to companies to protect them from patent infringement lawsuits from others using the typical nuclear stockpiling defense. However, these days, the company no longer discusses the patent defense fund. Instead, it refers to many of its own investors as "the patent infringers lobby." As the article suggests, it seems like the company basically convinced these companies to fund it based on this "defense fund" plan, by making it clear if they didn't invest, they would be the first targets for future lawsuits. In the meantime, would you trust any company that insists the patent system is just fine -- but doesn't seem to understand the history of innovation? Update: In a move that can't make folks happy at either magazine, it appears Fortune has an almost identical article about Myhrvold coming out. The two articles are so similar, in fact, that it makes you wonder why the publicity tour is starting up now.
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  1. icon
    Mike (profile), 26 Jun 2006 @ 12:41pm

    Re: techdirt's idiocy

    angry dude,

    It's funny. Every time you come here and bitch about my views on patents, I ask you to respond with actual substance, and you never do. All we get are insults about how stupid I am. That's not particularly convincing.

    America's economic prosperity was built on thousands of patented inventions made by many many inventors, some were corporate workers, some worked in their garages or workshops.

    Yes, but it's an open question as to whether or not the patented part was what was important. In fact, there's increasing research that the patents actually held back innovation -- rather than encouraged it.

    The real success was in being able to bring a product to market successfully -- which is different than inventing the product.

    Take a look at the history of the steam engine for example. It was *slowed* by patents, and innovation didn't really occur until the first patents ran out.

    Why is all this bitching and moaning about patent system ? Patent systme is not broken, the underlying principle is sound, it's just the current implementation is poor and underfunded.

    Yes, the implementation is extremely poor, which is a lot of what we focus on here -- yet you still call use stupid.

    Second, "underfunded" is pretty laughable. The patent system is profitable, mainly because so many people are applying for as many patents as possible, since they realize that's how the system works these days. Throwing more money at the problem doesn't solve the underlying fundamentals about giving patents on obvious ideas and holding back innovation.

    Without IP rights you would live in a much different world, and for many of us (at least for those who can create something new, not just steal...) this IP-less world would be an absolute nightmare

    Again a broad generalization without any support. We've given plenty of examples where modern societies did away with patent protection and, rather than the "absolute nightmare" you describe -- they did quite well.

    In fact, putting in place patent protection has sometimes helped slow down innovation. Look at the case of pharmaceutical patents in Italy. Without patents they had a thriving and competitive market (one of the world's largest), which came up with new and useful pharmaceuticals. After patent protection was put in place, the industry almost entirely dried up.

    Nightmare? Where's the nightmare?

    Don't buy into Mike's foolish anti-patent propaganda (which for some strange reason happens to have many common points with the BS coming out of the infringer's PR depts)

    This is my favorite. You like to claim that we're somehow supported by big companies -- yet we're just as much against big companies abusing the patent system and holding back innovation as we are small companies doing so.

    The important issue is helping to promote innovation and grow the economy. The current system is clearly causing a lot of problems (even you admit that). Why do you then freak out and call us names when we point out the problems and call for change?

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