Intuit Pays $120 Million 'Don't Sue Us' Tax To Intellectual Ventures

from the money-wasted dept

It's no secret that I have tremendous problems with Nathan Myhrvold's Intellectual Ventures, which many have described as the world's biggest patent "trolling" operation. The company has raised a ton of money and uses it to buy up thousands of patents. While it hasn't sued anyone, Myhrvold has made clear that's always an option. The company has remained incredibly secret, but it has somehow convinced some big companies to pay hundreds of millions to IV. Due to the secrecy, the details aren't clear -- and some of the deals apparently are a mix of "licensing" and an equity investment. But, still, the numbers are stunning. The latest, as pointed out by Stephen Kinsella is that Intuit has apparently paid $120 million to IV. For what? The right not to get sued. Think about that for a second. This is a pure dead weight net loss to society. It's $120 million that Intuit could have put towards further innovating, or to pay off investors via a dividend. Instead, it goes towards nothing productive, in terms of actually creating new products. It will now likely be used to buy up more patents so that IV can get similar black hole money grabs from other companies, as well. It's like a black hole where real innovation goes to die.

Filed Under: patents, software
Companies: intellectual ventures, intuit

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  1. icon
    Brooks (profile), 1 Jul 2009 @ 3:01pm

    Re: dead weight?

    Um. How about this scenario:

    - Inventor comes up with cool invention and patents it (let's even stipulate a genuinely patentable innovation).

    - IV buys patent and puts it in a file drawer

    - Engineer at Intuit comes up with same idea a year or two later, with no knowledge of the original invention

    Explain to me again how, in that case, Intuit is "riding coat tails" or "just plain stealing"? This isn't an unlikely scenario; this is the bread and butter of IV's business.

    It's one thing for IV to buy the rights to useful inventions and to license them as new technology. It's another to buy patents and file them, hoping someone will trip over them in the future. And, heck, I say that as someone who sold a patent to IV (and I'll bet everyone else here would have done the same).

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