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May 31, 2008

Defensive

Earlier this week, a thick-waisted but thin-skinned Nathan Myhrvold, Intellectual Ventures CEO, ventured into incoherence, jockeying defensively when questioned by grizzled technology reviewer for the Wall Street Journal, Walt Mossberg: "Don't call me a patent troll," and "I'm not abusing the patent system."

 Myhrvold: "I challenge the notion that there's something wrong with having an investable asset. We're closing the loop of capital... There's nothing wrong with trying to get a reasonable return" on patents.

Wielding the shtick of "I'm like a famous respected dead person," Myhrvold self-mythologized:

"Thomas Edison's business model was very similar to ours." What's different, he said, is that he thinks there's a new model, called "invention capital," that's similar to venture capital in that "you create an algorithmic way that people can get funded."

If that doesn't make sense to you, it's because it doesn't make sense. Period. It's an algorithmic way to say something that sounds like it might be something more than hot air, but isn't.

Intellectual Ventures buys patents from inventors at lowball prices. On its web site, Intellectual Ventures has a little shuck-and-jive graphic that leaves you wondering how they keep their doors open, especially considering they have never mounted an enforcement campaign. Intellectual Ventures is reputedly backed by Coalition for Patent Fairness members.

Sources: c/net, Barron's, personal experience, and the grapevine.

Posted by Patent Hawk at May 31, 2008 2:35 AM | Patents In Business

Comments

I respectfully disagree with your characterization of their work. IV is definitely on to something here. They're effectively helping to rebuild a division of labor between inventors and entrepreneurs. But I guess some people just won't believe that something is possible until they actually see it with their own eyes.

Posted by: Michael F. Martin at May 31, 2008 7:31 AM

Whatever IV is on to, they are not saying. A private company, they can be as selective or shady as they choose, and they are choosing the shade.

Nathan Myhrvold gets interviewed because he reeks of money. At best, his behavior represents a missed opportunity to educate rubes likes Mossberg to what patents are about, a little lesson in Capitalism 101. From the facts reported, he appears unable to do so.

You can project whatever you want onto IV as to their value, but your opinion had no facts for substantiation. “rebuild a division of labor between inventors and entrepreneurs” is a loopy abstraction as far as I’m concerned. What does it mean?

Whatever IV’s game plan, it has yet to be revealed.

Posted by: Patent Hawk at May 31, 2008 11:07 AM

Wow, a "grizzled technology reviewer" morphed into a rube, all in one post.

Posted by: Lawrence B. Ebert at June 1, 2008 6:52 AM

"thick-waisted"?

Posted by: curious at June 1, 2008 3:04 PM

I'd love to read IV's agreement with those CPF funders...
There must be some legal contract since substantial money changed hands
What is IV anyway?
A wormhole to suck up all the (worthy) patents from independent inventors (at rock bottom prices) so they won't team up with the likes of Ray Niro to beat the crap out of CPF serial infringers in court ?

Posted by: angry dude at June 2, 2008 5:53 AM

Per this New Yorker article from a few weeks ago, Myhrvold and IV seem to do a lot of their own inventing.

http://www.newyorker.com/reporting/2008/05/12/080512fa_fact_gladwell


The real question that the IV model poses is - what good is a company that generates patents but not products?

I submit that those who offer products to consumers, or make the capital investment to produce those products, or employ the people who make those products, benefit society more (in most cases) than those who exist solely for the race to the patent office.

Posted by: ep0non at June 2, 2008 9:27 AM

ep0non wrote:
"...what good is a company that generates patents but not products?

I submit that those who offer products to consumers, or make the capital investment to produce those products, or employ the people who make those products, benefit society more (in most cases) than those who exist solely for the race to the patent office."

strawman. You left out the inventors. The idea here is that an IV makes it easier for inventors to invent, sell their patent to IV for $$$ (or work for IV for $$$ and assign they patents), then go back to inventing without having to hassle with licensing, enforcement, etc.

The argument is that a liquid market for patented technology (both buying the patents & licensing the purchased patented technology to mfrs), the overall efficiency of the invent-patent-produce-consume cycle is increased.

The correct analysis is whether IV increases the efficiency of that cycle. Based on comparative advantage arguments, they do. Based on "holdout" and other high-transaction cost scenarios, they might not.

The underlying assumption is that patents incentivize innovation.

Of course, if you don't take that as a given, you should argue to scrap the whole patent system--don't just try to hobble the bright ideas that come along that make it more efficient.

That said, angry dude's wormhole comment is great food for thought.

It might seem that it is easier to "make money" off of a decent patent portfolio you picked up at eBay (Ocean Tomo) or a yardsale (bankruptcy) if you account for all the money you didn't have to spend defending yourself/paying damages from infringing valid patents.

Not a bad thing, I guess. But the advantage isn't that great. The delta is attorney's fees + other costs (including employee time from a suit), I think. The damages you don't pay by owning are equivalent to what someone else would make if they enforced it against you, right?

Posted by: Anon E. Mouse at June 2, 2008 10:15 AM

"educate rubes likes Mossberg to what patents are about, a little lesson in Capitalism 101"

Yeah PH, you sure hit the nail on the head with that one! Here I thought that the patent system was to promote the progress of the useful arts, but you're right! It's not about that at all, what it's about is creating monopolies in a capitalist society where none are needed!

Posted by: e6k at June 4, 2008 1:15 PM