Intellectual Ventures

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Intellectual Ventures
Type Privately held company
Industry Patent monetization
Founders Nathan Myhrvold
Edward Jung
Peter Detkin
Gregory Gorder
Headquarters Bellevue, Washington, United States
Number of locations 10
Employees 800
Website www.intellectualventures.com

Intellectual Ventures is a private company notable for being one of the top-five owners of U.S. patents, as of 2011.[1] Its business model has a focus on buying patents and aggregating them into a large patent portfolio and licensing these patents to third parties. Publicly, it states that a major goal is to assist small inventors against corporations. In practice, the vast majority of IV's revenue comes from buying patents,[2] aggregating these patents into a single portfolio spanning many disparate technologies and tying these patents together for license to other companies under the threat of litigation, or filing lawsuits for infringement of patents, a controversial practice known as patent trolling.

Intellectual Ventures launched a prototyping and research laboratory in 2009 called Intellectual Ventures Lab[3] which attracted media controversy when the book SuperFreakonomics described its ideas for reducing global climate change.

Overview[edit]

Intellectual Ventures was founded as a private partnership in 2000 by Nathan Myhrvold and Edward Jung of Microsoft, later joined by co-founders Peter Detkin of Intel, and Gregory Gorder of Perkins Coie. The Intellectual Ventures Management Company is owned 40% Nathan Myhrvold, 20% Peter Detkin, 20% Gregory Gorder and 20% Edward Jung. They reportedly have raised over $5.5 billion from many large companies including Microsoft, Intel, Sony, Nokia, Apple, Google, Yahoo, American Express, Adobe, SAP, Nvidia, and eBay, plus investment firms such as Stanford, Hewlett Foundation, Mayo Clinic, and Charles River Ventures.[4] In December 2013, Intellectual Ventures released a list of approximately 33,000 of the nearly 40,000 assets in their monetization program.[5][6] Licenses to patents are obtained through investment and royalties.[7]

Investment funds[edit]

The company operates three primary investment funds:[8]

  • Invention Investment Fund, purchasing existing inventions
  • Invention Development Fund, partnering chiefly with research institutions to file descriptions of inventions which don't currently exist
  • Investment Science Fund, focused on internally developed inventions

Intellectual Ventures Lab[edit]

Intellectual Ventures launched a prototyping and research laboratory in 2009 called Intellectual Ventures Lab, hiring prominent scientists to imagine inventions which could exist but do not yet exist, and then filing descriptions of these inventions with the US Patent Office. Notable participants of this process include Robert Langer of MIT, Leroy Hood of the Institute for Systems Biology, Ed Harlow of Harvard Medical School, Danny Hillis of Applied Minds, and Sir John Pendry of Imperial College.[citation needed] The Sunday Times reported that the company applies for about 450 patents per year, in areas from vaccine research to optical computing and, as of May 2010, 91 of the applications had been approved.[9] Internally developed inventions include a safer nuclear reactor design (which won the MIT Technology Review Top 10 Emerging Technologies in 2009) that can use uranium waste as fuel or thorium which is plentiful and poses no proliferation risk,[10] a mosquito targeting laser based on Strategic Defense Initiative Star Wars technology,[11] and a series of computer models of infectious disease.[12]

Their efforts to promote a method to reverse or reduce the effects of global climate change by artificially recreating the conditions from the aftermath of a volcanic eruption gained media coverage following the release of the book SuperFreakonomics. Information in the fifth chapter of the book about global warming proposes that the global climate can be regulated by geo-engineering of a stratoshield[13] based upon patented technology from Nathan Myhrvold's company.[14]

The chapter has been criticized by some economists and climate science experts who say it contains numerous misleading statements and discredited arguments, including this presentation of geoengineering as a replacement for CO2 emissions reduction. Among the critics are Paul Krugman,[15] Brad DeLong,[16] The Guardian,[17] and The Economist.[18] Elizabeth Kolbert, a science writer for The New Yorker who has written extensively on global warming, contends that "just about everything they [Levitt and Dubner] have to say on the topic is, factually speaking, wrong."[19] In response, Levitt and Dubner have stated on their Freakonomics blog that global warming is man-made and an important issue. They warn against the exaggerated claims of an inevitable doomsday; instead they look to raise awareness of other, less traditional or popular, methods to tackle the potential problem of global warming.[20]

Controversy[edit]

Intellectual Ventures' purchased patents have largely been kept secret, though press releases with Telcordia and Transmeta indicated some or all of their patent portfolios were sold to the company. Investigative journalism suggests that the company makes most of its income from lawsuits and licensing of already-existing inventions, rather than from its own innovation. Intellectual Ventures has been described as a "patent troll" by Shane Robison,[21] CTO of Hewlett Packard and others, allegedly accumulating patents not in order to develop products around them but with the goal to pressure large companies into paying licensing fees. Recent reports indicate that Verizon and Cisco made payments of $200 million to $400 million for investment and licenses to the Intellectual Ventures portfolio.[22]

On December 8, 2010, in its 10th year of operations, Intellectual Ventures filed its first lawsuit, accusing Check Point, McAfee, Symantec, Trend Micro, Elpida, Hynix, Altera, Lattice and Microsemi of patent infringement. The company has also been accused of hiding behind shell companies for earlier lawsuits,[23] an accusation consistent with the findings of NPR's Planet Money in July 2011.[24] The episode, which also aired as the This American Life episode "When Patents Attack",[25] was dedicated to software patents, prominently featuring Intellectual Ventures. It includes sources accusing Intellectual Ventures of pursuing a strategy encouraging mutually assured destruction, including Chris Sacca calling Myhrvold's argument that Intellectual Ventures is offering protection from lawsuits in a "mafia-style shakedown".[26]

Intellectual Ventures staff are active in lobbying and testifying in court on United States patent policy. It reports its purchasing activity as of spring 2010 has sent $350 million to individual inventors[27] and $848 million to small and medium size enterprises as well as returning "approximately $1 billion" to investors before filing any lawsuits.[28] In March 2009 Intellectual Ventures announced expansion into China, India, Japan, Korea and Singapore to build partnerships with prominent scientists and institutions in Asia to create and market inventions.[29]

While the company claims to assist independent inventors, one finding claims that they have been unable to note a single case of aid they have provided to an independent inventor.[25] The practice of legally prosecuting infringement of patents that are not used by the company to produce goods or services has been referred to as "patent trolling" by investigative journalists and industrialists.[30]

References[edit]

  1. ^ "Intellectual Ventures: Revealing Investors ", Patently-O blog, May 18, 2011. Consulted on May 21, 2011.
  2. ^ "Inside Intellectual Ventures, the most hated company in tech". 2012-08-21. Retrieved 2013-12-20. 
  3. ^ "Bellevue lab is an inventor's real dream" by Brier Dudley, The Seattle Times - 27 May 2009
  4. ^ "Defendants Certificate of Interest". US District Court, N. California. 2011-05-16. 
  5. ^ "Intellectual Ventures Find a Patent". 2013-12-16. 
  6. ^ Richardson, Kent (2014-06-14). "What's Inside IV's Patent Portfolio". IAM Magazine. London.  Issue 66. July/August 2014
  7. ^ "Ubuntu: Microsoft is Patent Pal" by Matthew Broersma, PCWorld - 23 May 2007
  8. ^ "Investing in Invention". Intellectual Ventures. Retrieved 2010-12-26. 
  9. ^ Harris, Mark (May 16, 2010). "Green Pioneers: Godfather of nutty inventions". The Times (London).  Mark Harris, The Sunday Times, May 16, 2010
  10. ^ "TR10: Traveling-Wave Reactor" by Matt Wald, Technology Review - March/April 2009
  11. ^ "Mosquito laser gun offers new hope on malaria" by Tony Allen-Mills - 15 March 2009
  12. ^ "Mathematics, Mosquitoes, and Malaria" by Philip Eckhoff, Hertz Foundation Biennial Symposium - Spring 2009, Volume 11
  13. ^ "Introducing the Stratoshield". Intellectual Ventures. 2009-10-21. 
  14. ^ Todd Bishop (2009-10-14). "Stratoshield: Nathan Myhrvold explains how to save the planet". TechFlash. 
  15. ^ Paul Krugman (2009-10-17). "SuperFreakonomics on climate, part 1". The New York Times. they grossly misrepresent other peoples’ research, in both climate science and economics 
  16. ^ Brad DeLong (2009-10-19). "Yet More SuperFreakonomics Blogging.". Grasping Reality with All Eight Tentacles. Levitt and Dubner today appear to no longer be thinking like economists 
  17. ^ "Why SuperFreakonomics' authors are wrong on geo-engineering". The Guardian (London). 2009-10-19. Many commentators have already pointed out dozens of misquotes, misrepresentations and mistakes in the 'Global Cooling' chapter 
  18. ^ "Freaking out: The controversy over SuperFreakonomics". The Economist. 2009-10-27. Retrieved 2009-11-06. 
  19. ^ "Kolbert, Elizabeth (November 16, 2009). "Hosed: Is there a quick fix for the climate?" [rev. of Levitt and Dubner's SuperFreakonomics and Al Gore's Our Choice]". New Yorker. 
  20. ^ Levitt, Steven D. (2009-10-17). "The Rumors of Our Global-Warming Denial Are Greatly Exaggerated". The New York Times. "... we believe that rising global temperatures are a man-made phenomenon and that global warming is an important issue to solve. Where we differ from the critics is in our view of the most effective solutions to this problem." and "The real purpose of the chapter is figuring out how to cool the Earth if indeed it becomes catastrophically warmer... if we weren’t convinced that global warming was worth worrying about, we wouldn’t have written a chapter about proposed solutions. 
  21. ^ Nicholas Varchaver (July 10, 2006). "Who's afraid of Nathan Myhrvold?". Fortune. 
  22. ^ "Tech Guru Riles the Industry By Seeking Huge Patent Fees" by Amol Sharma and Don Clark, The Wall Street Journal, September 17, 2008.
  23. ^ "Nathan Myhrvold's Intellectual Ventures Using Over 1,000 Shell Companies To Hide Patent Shakedown"
  24. ^ "When Patents Attack". 2011-07-22. Retrieved 2011-07-28.  Alex Blumberg, NPR, July 22, 2011
  25. ^ a b When Patents Attack!. This American Life. Retrieved on 2013-08-16.
  26. ^ Sacca, Chris (April 5, 1994). When Patents Attack. (Interview). This American Life. Retrieved March 30, 2007.  @48:44
  27. ^ Harris, Mark (May 16, 2010). "Green Pioneers: Godfather of nutty inventions". The Times (London).  Mark Harris, The Sunday Times, May 16, 2010
  28. ^ "Inside Intellectual Ventures" by Jeff Wild, IAM Magazine, 19 May 2009.
  29. ^ "Intellectual Ventures’ Indian Deal Epitomizes Strategy to Support Invention in Asia" by Gregory T. Huang, XConomy, 20 March 2009.
  30. ^ Lee, Timothy B. (7 October 2011). "World's leading patent troll sues Motorola over Android phones". Ars Technica. Retrieved 7 October 2011. 

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