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Intellectual Ventures Sues AT&T, Sprint And T-Mobile; While Saying That Such Lawsuits Are Evidence Of Progress

from the that's-chutzpah dept

After years of not suing anyone (but always threatening that it might, someday), Intellectual Ventures has become more and more aggressive of late in suing lots of companies. A few weeks ago it sued AT&T, Sprint and T-Mobile over a bunch of patents that (of course) involved some of IV's favorite shell companies. Just as it was preparing this lawsuit, a VP from IV went public with an attempt to argue that all this litigation is a sign of innovation at work. The article is rather shocking in how it presents its argument. It mainly relies on false claims that correlation means causation, concerning historical periods of innovation and lawsuits over patents. Of course, what it ignores is that the patent fights often come right after the innovation, not before. In other words, the patent battles aren't a sign that innovation is working. Rather it's a sign of patent holders freaking out that others are innovating. It's entirely about hindering innovation, not helping move it forward.

Along those lines, the folks at M-CAM who continue to call out bogus claims in patent lawsuits analyzed the patents in this IV lawsuit and found them... well... lacking:
Our systems found nearly 500 AT&T patents, with similar claims, that predate the fifteen asserted patents. Sprint Nextel also owns 12 patents that predate the asserted portfolio.
M-CAM also questions the claims that these lawsuits have anything at all to do with innovation, and hint at more nefarious reasons for the use of a bunch of shell companies:
Is IV’s patent litigation helping inventors or investors? Considering that the bulk of the patents in suit were each “acquired” from what the USPTO characterizes as a “merger” with a different relatively unknown LLC, we’ll let you decide. Seems to us that it simply represents an attempt to use opacity and “hidden weapons” for a tactical assault having ABSOLUTELY NOTHING to do with innovation. In fact, these kinds of structures are also typically employed for tax “optimization” which is to say, to avoid paying taxes for any economic gains resulting from a successful assault, ahem sorry again, we mean “settlement”.
By the way, you may have noticed that Verizon is conspicuously absent from the list of mobile operators being sued here. That's because Verizon paid the entrance fee and is a "member" in the IV club... which apparently only cost the company $350 million. Oh yeah... and it then became an enabler. One of the patents in the new lawsuit... once was owned by Verizon.

Filed Under: mobile phones, patents
Companies: at&t, intellectual ventures, sprint, t-mobile


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  1. icon
    David Collado (profile), 2 Mar 2012 @ 12:34pm

    It's Time to Close Down the Extortion Racket "Market"

    Comparing NPEs from previous centuries with today’s patent trolls is extremely disingenuous. True, the patent system was designed to allow patent assignment. But the intent behind the entire system, has and always will be “to promote the Progress of Science and useful Arts”. Today’s NPEs simply don’t do that, by any stretch of the imagination.

    I have no doubt that NPEs from previous centuries, when actual working models were required to demonstrate a useful invention, actually promoted innovation. The sympathetic idea of an independent inventor with no means to commercialize his invention was very real back then. Not anymore. With the Internet and today’s incredibly connected and efficient startup-slash-venture-capital ecosystem, independent inventors have a plethora of outlets to market their inventions. Unfortunately for some, only inventions with real value are picked up by this system.

    This relegates today’s NPEs to the role of picking up the scraps; the overly-broad, obvious and worthless patents nobody else wants because they offer nothing of value. Sadly, there is no shortage of such crap on the market thanks to the increasing glut in patent issuance.

    So yes, thanks to today’s NPEs like Intellectual Ventures, “inventors” all over the world are motivated to patent anything and everything they can think of that might bear some resemblance to an actual useful invention. No need to worry, IV will add their useless patents to a pool of more useless patents and then go find someone to threaten with it.

    So yes, the patent system is broken, to the extent it encourages and enables bad patents to clog up the system. I have no doubt that good quality patents are still issued on a regular basis. Those don’t need NPEs like they used to. But thanks to today’s NPEs and the blood-sucking innovation-killing patent-litigation-slash-bullshit-licensing market they have created for the least valuable patents out there, we can expect to see increasingly epic proportions of economic waste coming from our broken patent system.

    It doesn’t have to be this way. A realignment of the patent system with its constitutional mandate “to promote the Progress of Science and useful Arts” is achievable with some tweaks to the patent assignment provisions. For example, making patents dissolve if they are not put into practice within 3-5 years is one option. Or taxing them heavily for each year they are not put into practice is another. Or both ideas put together. But somehow, someway, we need to kill the market for bad patents; a market made possible today by NPEs like Intellectual Ventures.

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