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Summary:

The CEO of Intellectual Ventures says his company’s philanthropy means he is doing more good for the world than GigaOM. The claim fails to account for the harm to innovation he is causing through ruinous patent suits.

mosquito

Nathan Myhrvold, CEO of Intellectual Ventures, took issue with GigaOM this week after we expressed skepticism about his company’s plans to hire a “VP of Global Good.”

In an interview with tech site Geekwire, Myhrvold said, “I think we do a whole lot more good for the world than GigaOm does. How big is their malaria research project? How much effort do they put into polio?”

He goes on to suggest that companies, and Silicon Valley in particular, spend too much effort on making new gadgets for people who don’t need really them. We should focus instead, he says, on developing technology for the world’s poor and points to Intellectual Venture’s “laser device that shoots mosquitos out of the sky.”

What to make of all this? Well, the sentiment is certainly a noble one. The problem, though, is that Myhrvold is utterly unfit to espouse it. As we’ve stated before, no amount of philanthropy can undo the incredible ruin his company has unleashed on innovation through unfettered patent trolling. Lest you doubt, consider the following:

New research shows that Intellectual Ventures is tied to at least 1,300 shell companies whose sole purpose is to coerce real companies into buying patent license that they don’t want or need. Those who resist the “patent trolls” are dragged into nightmarish lawsuits.

Think about what this means in practice. It means thousands of entrepreneurs must divert revenue from development and technology to pay Mr. Myhrvold’s licensing tax or else brace for millions in legal fees. Worse, patent trolls are targeting some of the most promising young start-ups in the country like hand-craft site Etsy. Now, instead of hiring workers and bolstering the economy, Etsy and others must put aside money to pay the likes of Mr. Myhrvold instead.

And for what? Intellectual Ventures styles itself as a hotbed of inventive wizardry but precious few devices have come out of its lab and into the world. (Just when is that mosquito-zapping marvel going into production by the way?) The most tangible thing Mr. Myhrvold has done to date is to offer a new way to cook a hamburger. And even though it has siphoned billions from productive companies, Intellectual Ventures has even proved a rotten deal for its own reluctant investors.

To be clear, GigaOM commends Intellectual Ventures for any efforts it undertakes to fight malaria and polio. Our complaint is instead with its decision to game the country’s dysfunctional patent system. The company’s lawsuits are smothering technology development of all sorts (not just gadgets) and until Intellectual Ventures calls a halt to this, its “VP of Global Good” is no more than the feel-good face of a parasitic empire.

(Image by Henrik Larrson via Shutterstock)

  1. Myhrvold: bloodsucker.

    Well played, GigaOM!

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  2. BRAVO!

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  3. Seriously, high-tech solutions for malaria control is utter and complete nonsense. We have been unable to sustainably deploy treated bed nets, which are dead simple technology. Lasers? In rural sub-Saharan Africa? It’s so absurd it’s funny. The military on the other hand….

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  4. Myhrvold has sucked more blood than all the mosquitoes combined..

    “Just when is that mosquito-zapping marvel going into production by the way?”..

    Exactly.. we have been hearing about this invention for years.. but when will it be a reality..

    At least GigaOM is a reality.. positively contributing every day..

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  5. Reblogged this on txwikinger's blog.

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  6. Myhrvold says they do more good than GigaOm, and that is absolutely not true. They are a parasite, one of the worst, extracting value from society while adding no value. They actually do more damage than financial “engineering” firms, who merely just extract rents from the economy; as you point out, IV also prevents others from adding value.

    There is no amount of philanthropy that can offset the damage this billionaire has caused the world. One thing I can be sure of is that every word out of his mouth will be self-serving.

    Thanks for writing the initial post on them, and following up with this one. It so needs to be said.

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  7. Working together to grow on what we have crated is the essence of innovation. This guy is a major barrier that must be exposed and stopped.

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  8. Reblogged this on Matt Thomas and commented:
    Having a “Vice President of Good” kind of insinuates that the rest of the organization is something other than good, doesn’t it?

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    1. Haha! well said!

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  9. Reblogged this on BULLETFAME.

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  10. They tried the blood sucking zapper in their own labs. The machine started zapping their own lawyers. Conclusion: Not ready for production.

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  11. It would be interesting to probe into Myhrvold’s head and observe his moral or ethical stance on Intellectual Ventures’ primary activities. Does he believe he’s helping the world, or does he simply say “I’m in business, same as any other company” and that’s as far as his thinking goes?

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  12. Truth About Grammar Saturday, August 11, 2012

    “… hotbed of inventive wizardly …” I think you mean wizardry.

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    1. fixed.. thanks for flagging

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  13. Modernist Cuisine – that has saved a lot people from poverty and disease. Who needs another tech startup when we can all spend 36 hours making a hamburger?

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  14. People invent/innovate.. artificial persons like Apple Microsoft Google can’t do that on their own, hence they _pay_ their employees or people outside the company for that.

    Intellectual Ventures do same(pay people for IP) and then license these patents.

    Inventors/Innovators get paid for work, licensee gets to use the invention/innovation and Intellectual Ventures get paid for their services.

    In some cases these Artificial Persons have to sue firms who use IP without license..

    But according to Jeff John Roberts,

    When firm like Intellectual Ventures do that, they are troll.

    Whereas when other artificial persons like Apple do that.. they are “productive company” just making people pay for their inventions..

    I don’t get it..

    After all at they end of day the REAL PEOPLE invent and innovate, and get paid by Apple and IV for their work.

    So please help explain to this stupid man, why those innovators working for Apple should be paid for their IP, but those other innovators sho sold their IP to IV shouldn’t be allowed “siphon off billions” from “poor” companies like Apple.

    You can’t explain.

    Also if patent system is dysfunctional, then why are companies like tech sector and companies like Apple Microsoft and Google do so well while rest of economy is crumbling ?

    Because thanks to “dysfunctional” patent system, and firms like IV.. Innovators/Inventors get paid for their IP, which motivates them to invent/innovate more.

    If only other sectors had trolls like Apple and IV, those sectors too would attracted innovative minds….

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    1. @Sage; One significant difference is the extent to which IV goes to hide their activities. Except for a couple of isolated incidents of shielding the purchase of IP *licenses* (not prosecution), I’m not aware of Apple, Google, etc. doing the same.

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  15. When you’re at the top, there’s only one way to go. Intellectual Ventures is a club used by Myrvold and Microsoft to keep the rest of the tech world under the thumb of Microsoft. Myrvold and Microsoft can use the legal system to wipe out or buy any threat to Microsoft, and maintain the Microsoft monopoly forever. Talk of the “good” done by Intellectual Ventures and Gates is putting lipstick on a pig. Neither Technology nor Money will ever cure malaria.

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    1. Microsoft and the “innovative” _Apple_ and the “do no evil” _Google_ and Intel and Sony, Nokia, SAP, Nvidia, eBay and MANY more… are all PARTNERS of Intellectual Ventures.

      >Neither Technology nor Money will ever cure malaria

      Don’t know about you, but Microsoft’s profits are already doing LOT of good..

      Take a look at this :-

      http://en.wikipedia.org/wiki/Bill_%26_Melinda_Gates_Foundation#Global_Health_Program

      If you think this is having no effect, then you need to get your head examined..

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      1. @Sage: Dig a bit deeper… The companies you named are IV’s *customers*, aren’t Partners of IV anymore than I’m a “Partner” of my local Co-Op. In both cases, we’re buying into the collective with the expectation that we’ll benefit from the way they run their operations. Not cash profit mind you, but *access* to what that organization reaps. Correspondingly, from my read on it, the business relationship between IV and all the companies who’ve signed on with them is more akin to extortion, which they’re trying to wrap in a air of legitimacy.

        RE: your point about MSFT profits and the B&MGF, those are not directly Microsoft profits doing the good. Economically speaking, the great work being done by the Foundation is due to the value (and hence cash) WE, the market, put on Microsoft’s stock — which Bill & Melinda then sold to fund the Foundation. There’s no direct route of any profit Microsoft earned on anything that has made its way into the Foundation’s funding; it’s Bill & Melinda’s *personal* fortune (plus the interest paid to them on that fortune) that they received in exchange for selling something of their own… their stock.

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    2. Hmm, let us see. Google, Facebook, VM Ware, Oracle, Salesforce.com, and of course Apple (that overtook Microsoft’s market cap only a short while ago and has since doubled it!) have all pushed Microsoft into a painful corner. All of Microsoft’s assets are under threat – even the share of IE has declined rapidly. What Microsoft monopoly are you talking about… or did you mean Apple 30% growth over the last many many quarters?

      Now take a look at the Bill and Melinda Gates Foundation – no, they have not yet succeed in granting people like you eternal life and health but they sure are leading the way in addressing some of the world’s toughest problems.

      In other words, the wealth from the monopoly of Microsoft is helping global health and global development in ways that no other person or company can come close to replicating without a complete dedication to these problems. Say all you want about patent trolling, but do appreciate the small world of good that could have come out of it.

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      1. “In other words, the wealth from the monopoly of Microsoft is helping global health and global development in ways that no other person or company can come close to replicating”

        You don’t have facts to back that up, do you? What you wrote is what you want to be true, because you are a Microsoft worshipper and true believer, as is the whack-job – Sage is Free, above.

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      2. In response to Zato: seriously… Bill G’s wealth comes from Microsoft. And he is putting it to great use. What backing do you need? I am not a MSFT worshipper but hating something for no reason is not something I like to do. In fact, in this case, if Microsoft’s stock does well, so does Bill Gates and hence the Gates Foundation. [No, I do not have either MSFT or APPL stock.. perhaps in mutual funds.]

        You are seriously demented if you cannot ackonwledge the fact that someone is doing some good with the wealth they have accumulated.

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  16. Well-said, Jeff, in fact very well-said. I knew about IV but hadn’t realized the damning consequences. Now that GigaOM has picked up the megaphone perhaps other industry-respected blogs will follow with their own opinion about the societal costs of IV’s business model.
    It’s regrettable that someone with Mr. Myhrvold’s exceptional and proven intelligence (he made the cover of Time Magazine when he became head of R&D at Microsoft about a decade ago, if I recall correctly), would apply his gift in such a dreary way. Although I’m sure he’s laughing all the way to the bank, at some level it has to be professionally embarrassing. What could possibly motivate him? It can’t be money since he left Microsoft with a mountain of it.
    But one issue that wasn’t specifically addressed here is IV, despite its eminence, doesn’t have a monopoly on this sector of law; so the entire area needs censure. It’s ironic in a sad way that IV’s success is another example of talent gone awry.
    Nathan Schor nathans@netmeals.net

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  17. The patent trolling apart, let us give them a chance to solve some of the problems he talks about. Maybe something good will come out of that effort. The patent enforcement part – well, that we can continue talking about for sure!

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    1. “The patent trolling apart, let us give them a chance”

      I see. Because they are supposedly doing good in the third world, we should just let them use the legal/patent system to control the TECH world to their advantage.

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      1. No you twit. These are two separate things. You can moan about the patent trolling.. but let them do what is generally considered to be “good.” Are you totally demented or do you not have a brain at all.

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  18. The malaria-zapping laser was published in Nature in April 2006 — in one of the science fiction stories on their back page.
    http://www.nature.com/nature/journal/v440/n7086/full/440968a.html

    That was a year before the brainstorming session which led to Intellectual Ventures’ plan.

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  19. So, the real question is, which parasite do we want to eradicate first?

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  20. I would much prefer GigaOM to focus on its job (reporting and analysis). Yes, you should have an opinion about the current patent regime and the emergence of “trolls”. But please focus on saying something intelligent about it, rather than getting into polemics and pretend-moral arguments.

    It is perfectly legal and often beneficial to amass capital (including intellectual capital) for the purpose of reselling it or collecting rents (royalties) on it, or as a defense against competitors who have their own mountains of capital, be it cash or IP, or machinery, or a brand portfolio.

    The financial crash should have taught us about the point where that business becomes socially harmful: When there is a bubble. Thank you for your recent piece on the patent bubble!. More like that please. And a bit more self-criticism about GigaOm’s and its peers’ role on inflating the patent/tech bubble.

    Myhrvold is an industry player with his own horse in the race. GigaOM has to rise above that.

    -GB

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  21. Well put.
    Reminds me of another outfit that is always going on about how much charity they are handing out in Africa but in reality they are only robbing Peter to pay Paul.

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  22. Nathan…IF (a big IF) you do some good vis-a-vis malaria, then you may well have done more good than GigaOm. Thanks (in advance) for that.

    However, what matters is your NET IMPACT. The tremendous drag you put on innovation, the tax on progress, the stifling of entrepreneurs, and the shackles on inventors (who you claim to champion) far outweighs your laser bug zapper.

    GigaOm has no such negative karma to absolve. IV is the parasite that we should be zapping with lasers.

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  23. The root cause of the problem is the broken IP system in the US. The broken system makes it more profitable to file patents and then try to extract tolls from companies that are trying to launch services – than it is to launch the services themselves. It is a rich irony that the proponents of the patent system talk about how it promotes innovation – when in practice it is the absolute opposite – the unpredicatability of the system scares companies away from innovating lest they be sued and subject to outrageous penalties – or forced to pay high licensing costs.

    A simple cure would be to impose a “commercial prsoecution” test on anyone wanting to sue for IP infringement. If a plaintiff could not demonstrate a bona fide attempt to commercialize a product or service embodying the patented concept then the suit would be thrown out.

    This would invalidate the patent troll model overnight – and serve the actual purpose of the patent system – to encourage innovation.

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  24. These folks are despicable. The fact that they’ve put money (other people’s money I might add) into worthwhile research is irrelevant.

    I can’t steal bread from a bunch of grocery stores and bakeries only to open my own discount shop to help poor people out…

    Again, their nobility in this one area says nothing to counter the claims that they are trolls who innovate nothing and drain the creativity out of others.

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