Wireless infrastructure could be the next target of a large patent troll

July 18, 2014
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Intellectual Ventures (IV) is a company that buys old patents and extorts forces productive businesses to pay IV licensing fees. Patent Trolls such as IV account for 67 percent of all new lawsuits.

But over the last few year, the New York Times, NPR and even the Wall Street Journal have all turned against companies such as IV. One reason for the turn in public opinion is the growing number of studies which show that patent trolls are causing a number of businesses to be forced into near bankruptcy by defending these lawsuits.

Studies put litigation expenses at $29 billion a year due to patent trolling and estimate that complaints from non-manufacturers make up two-thirds of complaints filed. Non-practicing entities are patent holders who don’t make products. IV has never produced a single product and brought it to market. Their reputation is so poor that Apple declined to participate in IV’s newest trolling fund.

“[Venture capital] investment would have been at least $8.1 billion higher over the course of five years but for litigation brought by frequent patent litigators,” professor of marketing Catherine Tucker wrote in the paper [PDF]. While a little bit of litigation can indicate a strong innovation ecosystem, Tucker said, too many frivolous lawsuits scare VCs away. - VentureBeat

So, it should make wireless companies a bit nervous to see that a recent report (brought to our attention by GigaOM) shows that IV has now acquired more than 200 new patents, in tech areas such as wireless infrastructure and cloud computing.

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Intellectual Ventures has a long history of questionable conduct. Whether it is taking a patent donated to a non-profit (with explicit language to not sue others) and using that to sue others, suing small businesses over absurdly broad patents that are thrown out in Court for being a basic and obvious idea and claiming that patent reform would create ‘uncertainty.’

Comments

  • Amadeus Klein

    Why do we allow this?

    • Brian Vickery

      Patents or businesses like IV?

      Patents are great and necessary. I mean, how would you like it if you spent years and lots of money to devise a new tech to be better than your competition only to allow the competition to buy your new wonderful piece of tech and then add it into theirs with minimal investment.

      Patent Trolls like IV are a bane on a free market/capitalistic system. They do not help strengthen or make it grow but rather shutter and cause the opposite.

      • Amadeus Klein

        ? I’m surprised you would have to ask… Patent Trolls of course…. Why would anyone dislike patents? If you make something unique you should be allowed to protect it (Emphasis on unique here, rounded corners or a rectangle are not unique)… But Patent trolls are an obvious abuse of the system….

      • Johannes

        It would be best to declare a patent invalid if the company did not develop the patent itself or does not produce products that make use of the patent

    • Jim Myers

      because the economy is failing and the only people who still have a job are the lawyers

  • TheGCU

    Patent law should be changed to a “use-it-or-lose-it” concept. If you hold a patent and don’t use it to produce a product, you should lose the patent. You get 5 years to use the patent, for example, otherwise you lose it. That’ll end trolling real quick.

    But we’re talking about US law here, and Americans love to sue everybody else (and themselves), so this won’t change anytime soon.

    • Vishnu Vadlamudi

      Large companies could easily abuse such a law. Imagine you patent a brilliant idea to make an existing technology much better but you can’t exactly create an entire company to compete with large multi nationals. If then you chose to sell your patent to those companies, they could just choose to ignore you for 5 years as you said and then when it goes invalid, they can use it for free.

      • TheGCU

        And that’s why I don’t write patent law. But some type of use-it-or-lose-it should be required. You shouldn’t be able to just use patents to force other people to pay you for no reason.

  • urbanegorilla

    I hate to say it, but a patent is still a patent whether or not the company is a troll. If they purchased them legitimately, as all companies do, why single them out for pursuing the protections that our patent laws provide? I can point out cases where large companies were just as abusive in stealing patentable ideas and bankrupting the small companies and people who owned the ideas. For example the guy that developed and patented the weed-whacker who fought Black and Decker for years, or small companies such as the one that developed a compression feature for data when hard drives were small and expensive that Microsoft stole and packaged as part of their operating system. Patent laws work both ways. If a company is misusing a patented idea, then it’s up to them to find another solution, or work a deal and pay to use it. That’s no different than what you or I would expect if it was our idea, whether or not we sold it to one of these trolls. Welcome to America.