Intellectual Ventures Responds To This American Life & President Obama By... Filing More Patent Lawsuits

from the how-do-these-guys-live-with-themselves? dept

Ah, Intellectual Ventures. Over the weekend, This American Life ran their report updating a critical look at Intellectual Ventures from two years ago by showing that the shell company, whose patent IV had insisted was a perfect example of IV helping small inventors get their due was (a) completely bunk and invalidated in court, and (b) despite IV "selling it off," 90% of the profits from the approximate $100+ million that was raised via shakedown threats with that patent... went back to IV. On Tuesday, President Obama came out strongly against patent trolling, and part of his proposal would require revealing who was really behind various shell companies.

So how did Intellectual Ventures respond? By filing patent infringement lawsuits. Yes, basically, a big "F*** you" to those concerns. At this point, they seem to just be laughing at everyone as they rake in the cash from threatening businesses who don't pay up. Apparently, a few billion dollars paves over any conscience pretty easily.

And, yes, IV did also release a laughable "statement" about the This American Life episode, in which the company tries (as it normally does) to brush off the issues raised in the report, with the basic summary being, "Hey, this is how business gets done." But they're not being fully honest here. Let's just pick off a few points.
  • Oasis Research is an independent company who purchased patent assets from IV.
  • Oasis Research is not a holding company that IV owns, controls or manages.
  • Oasis Research is not a company doing business at IV’s direction.
No, but your deal gets you 90% of the profits from any trolling efforts. For a bogus patent that lots of people knew was completely bogus all along and said so. At the very least, this makes you a clearly very interested party in the litigation -- and in the original TAL episode, IV's Peter Detkin clearly was trying to play down the relationship, and made statements that most normal people would take to suggest that IV had sold off most of its financial interest in the patents, and maybe was taking back a small royalty. No, he didn't say it, but the implication was quite clear. Most people would consider this dishonest.
IV’s acquisition entities (what others refer to as “shell companies”) are holding companies that hold our assets – they are not vehicles for our litigations. Since that part of our business continues to confuse people and generate speculation, we wrote about it at length here last December.
No. The first sentence would be a lot more accurate if it said "hide our assets" instead of "hold our assets" because that's what's really going on. Whether or not they're vehicles for litigation is really not that important. Especially when you can "sell off" (*cough cough* *nudge nudge* *wink wink*) the patents to a "third party" shell company in which 90% of the profits go right back into your coffers.
As for the inference that we sold Oasis low-quality assets – IV has no business interest in buying, litigating or selling assets that are going to be found invalid. Our business depends on owning and monetizing high-quality assets.
Again, this is not true. Their business depends on buying low value assets but then convincing others that they're high value assets -- sometimes by bundling them with so many other low value assets that the "threat" of that giant bundle makes it make sense to pay off IV not to sue them. Whether or not the patents are actually low value or high value is immaterial to IV so long as it can make more money off of it in the long term. And... it just so happens that they can buy low value patents for much cheaper, and then bundle them and make much bigger margins.
This attention to quality has been validated by some of the world’s largest technology companies who are our customers, licensees, and, in some cases, investors. In the intellectual property industry, we are recognized for our market leadership and for creating a portfolio that stands above the rest.
Again, I'd argue that's a rather charitable rewriting of history, especially as many of the "world's largest technology companies" that IV speaks about felt that IV pulled a bait and switch to get them to invest in the first place, promising that the focus was on creating a "patent defense fund" to protect companies from trolls, not to create the world's largest troll. And, many of those same companies who paid up felt like they had to in order to avoid getting sued -- which is the whole basis of any trolling operation. They didn't buy in because of the "high value" of the patents, but because it was cheaper to buy in than get sued. Many of those same companies seem quite happy to talk off the record about how much they hate IV and how they felt completely shaken down by IV.

Intellectual Ventures keeps trying to present itself as something that it's not. But almost no one believes it.

Reader Comments (rss)

(Flattened / Threaded)

  1. This comment has been flagged by the community. Click here to show it
    Anonymous Coward, Jun 5th, 2013 @ 2:30pm

    Ah, Intellectual Ventures.

    Ah, Mike Masnick. Tells us how great and awesome he is with the first sentence.

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

  2. icon
    apauld (profile), Jun 5th, 2013 @ 2:58pm


    Please explain how that first sentence equates to how you interpreted it, and include all references with your work.

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

  3. This comment has been flagged by the community. Click here to show it
    out_of_the_blue, Jun 5th, 2013 @ 3:46pm

    'basically, a big "F*** you" '

    What's with the asterisks? Suddenly turn into an old maid?

    "Apparently, a few billion dollars paves over any conscience pretty easily." -- Oh, you've got that entirely backwards. First thing they do in law school is remove your conscience. That is not a joke. In my view, it's nearly impossible for anyone with an active conscience to become Rich. Of course those born Rich aren't ever bothered with noticeable conscience: like all empathy and morality it has to be taught.

    [Charity comment because a mere two in over an hour, and one of those is sniping.]

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

  4. identicon
    Anonymous Coward, Jun 5th, 2013 @ 3:52pm

    Re: 'basically, a big "F*** you" '

    That's absolutely correct: there is NO SUCH THING as a rich person of conscience. Doesn't exist. Why? Because anyone with a functioning conscience would never do the things necessary to become that rich, and anyone of conscience who stumbled into it (say, by winning a lottery) would donate most of it to charity.

    TLDR: Rich people are assholes.

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

  5. identicon
    Anonymous Coward, Jun 5th, 2013 @ 4:04pm

    Re: 'basically, a big "F*** you" '

    So what about people like Bill Gates who donate hundred's of millions to charity? Are they another Anomoly?

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

  6. identicon
    Anonymous Coward, Jun 5th, 2013 @ 4:16pm

    Re: Re: 'basically, a big "F*** you" '

    Ahh, but Bill Gates and his company created Windows ME, Vista, and Windows 8. All evil.

    So at best, the hundreds of millions he gives to charity is just an attempt to balance shit out.

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

  7. identicon
    Anonymous Coward, Jun 5th, 2013 @ 4:24pm

    Re: Re: Re: 'basically, a big "F*** you" '

    Wow you are missing the point of this article by so much you could quarterback for the Dolphins...

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

  8. identicon
    Anonymous Coward, Jun 5th, 2013 @ 4:49pm

    What sort of rhetoric was spewed by IV when they first started up business? Was it something along the lines of ... pooling our patents for defense against patent trolls?

    Haha - yeah, that's a good one.

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

  9. identicon
    aerilus, Jun 5th, 2013 @ 9:41pm

    Re: Re: 'basically, a big "F*** you" '

    how much do you know about the founding years of microsoft? bill gates pretty much ripped everyone off including Steve jobs most of whom at the time were just experimenting with computer programs especially in academia bill gates took free software crushed it and made an empire out of smoke and bull. don't forget that having lots of money means you pay lots of taxes and why not make tax deductible donations to charaties and get your face all over the news feeding the homeless or the like. Im not saying its a bad system but you have to see both sides people who are that smart and did everything they could to get rich are always looking for an angle.

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

  10. identicon
    Anonymous Coward, Jun 5th, 2013 @ 9:44pm

    Re: Re: Re: Re: 'basically, a big "F*** you" '

    the co founder and ceo of intellectual venture was the cto of microsoft

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

  11. identicon
    Anonymous Coward, Jun 5th, 2013 @ 9:47pm


    this is my favorite

    "TerraPower, a subsidiary of Intellectual Ventures, aims to develop a nuclear reactor that is "safe and cheap" as part of Bill Gates' strategy to reach the goal of zero carbon emissions globally by 2050.[13] Gates unveiled this plan at the TED 2010. The plant will run on natural or depleted uranium with the potential for 30 years without refuelling."


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

  12. icon
    DannyB (profile), Jun 6th, 2013 @ 5:47am

    Re: 'basically, a big "F*** you" '

    out_of_the_blue writes:
    > First thing they do in law school is remove your conscience.

    Apparently the first thing they do in Hollywood is remove your brain.

    I'm sure horse_with_no_brain would agree.

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

  13. icon
    DannyB (profile), Jun 6th, 2013 @ 5:54am

    Here's hoping Intellectual Vultures is the next Prenda

    As an initial matter, because Patent Trolls such as Intellectual Vultures object to the term Patent Troll, I will use the non offensive term PTE to refer to them. Where PTE stands for Patent Trolling Entity.

    Since Patent Trolling Entities use the US Postal service to send their threat and extortion letters, I wonder if they ever cross the line into federal crimes with serious penalties like mail fraud as Prenda has done?

    What would it take to qualify? Threatening over a patent that has been invalidated? A patent that is pending? A patent that is being re-examined?

    Will a PTE like Intellectual Vultures engage in Prenda like musical chairs games of "hide the party in interest"? Or hot potato games like "who's the decision maker"?

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

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