Nathan Myhrvold Ups The Ante; Raising $1 Billion To Hoard More Patents

from the just-can't-stop dept

Former Microsoft CTO, Nathan Myhrvold has been working for years on his plan to buy up as many patents as possible in order to force companies to pay him license fees. It's been mighty successful. He kicked it off with a $350 million fund, which he raised from tech companies using a bait-and-switch tactic. The original business plan he pitched was that he would license up all the leftover patents from failing dot coms and then build a pool that all the big Silicon Valley firms could use as a sort of "patent defense" shield against patent lawsuits from patent hoarding companies. Except, somewhere along the line, he seemed to realize that being on the side of patent hoarders was a lot more profitable -- so he used the big tech company's money to buy up a bunch of patents, and then started referring to his own investors as "the patent infringers lobby." Nice guy.

Of course, when people complain about what he's doing, he's quick to note that the company, Intellectual Ventures, has yet to sue anyone for patent infringement. That may be true, but as someone says in a new profile of the company in the Wall Street Journal, when you have a company that can "send letters to big companies saying, 'We have 800 patents that cover your business'... nobody can risk going to court, and they're just going to write you a check." The big news in the WSJ piece is that the $350 million to buy patents wasn't enough. Myhrvold is now out raising a $1 billion fund to buy up patents -- with a big target on sucking up patents from universities throughout Asia. This takes the concept of patent hoarding to entirely new levels. Traditionally, such firms are somewhat secretive and try to get a big win or two to fund a warchest for buying up more patents. In this case, Myhrvold seems to want to do the same thing, but in a much more professional looking manner. It's a total disgrace of the patent system, of course. About the only good news in the entire article is that Stanford and MIT refuse to work with Intellectual Ventures, stating: "We want to work with companies that are really going to develop the technology." Don't we all?

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  • identicon
    Danny, 13 Nov 2007 @ 2:56pm

    I wonder...

    has he patented this "business model" yet?

    reply to this | link to this | view in chronology ]

  • identicon
    Pandu Rao, 13 Nov 2007 @ 3:21pm

    Intellectual Ventures is not invulnerable

    I do not think Intellectual Ventures is invulnerable.

    Here is why-

    Let us say IV sues Company X for infringing on certain patents. The argument is that IV does not develop anything and is therefore immune from a counter-suit launched by Company X.

    Retaliation can be as follows:
    1. Company X studies the connections of Intellectual Ventures to its clients (C1, C2, C3) and its financial backers (B1, B2).
    2. Company X studies the products/services offered by C1, C2, C3, etc and other clients (C4, C5, etc) of backers B1 and B2.
    3. Company X purchases patents or ties up with Patent Pooling Organizations (PPO) which have patents in fields that affect C1, C2, C3, C4 and C5.
    4. Company X/PPO brings one or more patent lawsuits against one or more of the client C1 through C5 (with damages equal to twice the amount demanded by IV).
    5. Company X/PPO thus brings pressure on IV to back off.

    Company X and the PPO sends a message that it is not in anyone's interest to settle with IV.

    As Ben Franklin would say, "We must all hang together, or assuredly we shall all hang separately".

    reply to this | link to this | view in chronology ]

  • identicon
    angry dude, 13 Nov 2007 @ 6:46pm


    Mike wrote:
    "with a big target on sucking up patents from universities throughout Asia."

    WTF are you talking about ?

    I've never seen a single US patent from any of the universities in Asia, at least in high-tech.
    There are lots of junk patent filings of course from the likes of Samsung and Toshiba, but not from universities

    Do you really have a f****** clue about the subject ???

    reply to this | link to this | view in chronology ]

    • icon
      Mike (profile), 13 Nov 2007 @ 10:04pm

      Re: technonsense

      WTF are you talking about ?

      Perhaps you ought to, I don't know, read the WSJ article for yourself. It's not like I made that point up. It came from the article.

      However, knowing your past of making stuff up around here and making blatantly false accusations about me and others, why should it come as a surprise that you would once again attack me without actually understanding the facts?

      reply to this | link to this | view in chronology ]

  • icon
    Killer_Tofu (profile), 14 Nov 2007 @ 5:49am

    Yet Another

    Yet another example of the patent system being broken. We would all be better off if the patent office just voided all patents that He OR his company (or any future company he is a part of) owns. Just a nice sweeping "you are out of the game" statement. That would be just peachy keen.

    reply to this | link to this | view in chronology ]

  • identicon
    Giant Eye, 14 Nov 2007 @ 7:56am

    Name Says It All

    The name of this guy says it all. It just shouts out "I'm a geek with no conscience."

    reply to this | link to this | view in chronology ]

  • identicon
    kalaichelvan, 20 Dec 2007 @ 6:46pm


    can help mi i need $2500 if can plis bangkin

    reply to this | link to this | view in chronology ]

  • identicon
    P, 23 Sep 2008 @ 9:48am

    Lock Up Patents. Really?

    I'm suspicious of those who claim the IV wants to lock up patents. Nathan's claim is that he wants to create a patent marketplace, overcharging when licensing or selling a patent would not be a good way to create such a business. I don't see a good business model in over charging.

    reply to this | link to this | view in chronology ]

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