Blog Post

Apple declines to join Microsoft in funding patent troll Intellectual Ventures

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

Intellectual Ventures (IV) is seeking a major new investment to expand its controversial patent trolling operations but, unlike on past occasions, Apple(s aapl) is not coming along for the ride.

According to a Reuters report, Apple has turned down an invitation to join Microsoft(s msft) and Sony in backing a new IV patent acquisition fund that could be used as a vehicle to extract licensing fees and file lawsuits against companies.

The news comes at a time that Congress is working on a law, the Innovation Act, intended to curb abuse of the patent system through measures like fee shifting and new legal discovery rules that would make it harder for patent trolls to swamp their targets with litigation costs.

The rise of patent trolls, which are a target of the proposed law, can be traced in no small part to Intellectual Ventures, which has armed thousands of shell companies with old patents in recent years. While Apple invested in earlier IV funds, its reluctance to do so again may stem from the fact that it is being swamped by trolls itself; in February, the company complained that it has had to go to court with trolls 92 times in the last three years.

“Microsoft and Sony’s investments give IV a fresh war chest to buy new patents,” a patent analyst told Reuters in relation to the new IV fund.

Earlier this year, Intellectual Ventures launched a Political Action Committee to lobby for patent trolls in Washington, a development that is likely galling for the companies who have had to pay off IV, and now must watch it use some of their money to seek protection from Congress to continue its trolling operations.

31 Responses to “Apple declines to join Microsoft in funding patent troll Intellectual Ventures”

  1. Flame this comment if you please :) Patents are a form of “youre damned if you do and damned if you dont”. As a company, youre better off keeping your mouth shut and refusing to appear in court, continuing to make it happen. Simply ignore the trolls and they go away. Whats gonna happen? Police raid your complex? Nah, its all a farce (like much of the legal system is). If 100 small businesses were brought to civil court, not a single showed up, and simply ignored the “invoices and fees”, it would make quite an impact on the perceived efficiency of the arbitrary legal structure that the big dogs abuse. Its our junk yard too, and you know what? 99 small dogs > 1 big dog. Ever get scammed by a cell company and refuse to pay the bill? What happens….2 years later they settle for a quarter, and your credit score wasnt touched. Hmm mysterious eh? Works in the big realms too — IF we all pull out heads out of the sand.

    Stack it up. Let MS sue you for 3 trillion if they please, just ignore them. Its civil matter not a federal offense. Its all equivalent to bickering in a sandbox. As we tell our children, just share. Its time us adults stop being so stubborn and take a look at ourselves, in the big sandbox. If youre not making enough money from it, youre doing it wrong. If you cant keep up with a huge company marketing it better, youre doing it wrong. Basically no matter what, when competition is involved, youre doing it wrong, its part of the knowledge going into business in year 2014.

    Thats coming from someone who deals with all of this crap on a daily basis. Small biz are far too afraid to say “no, i dont think so” and just continue on against the bullyism.

  2. writeameer

    Objectivity and Fairness

    Objectivity means that when covering hard news, reporters don’t convey their own feelings, biases or prejudices in their stories.

    Just noticed a few sentence that may not conform:

    “The king of the patent trolls is raising new money to expand its trolling activities”
    “a development that is likely galling for the companies”

    …there’s much more in this article :).

  3. Because both Apple and Microsoft support patent trolls, and also exhibit patent trolling behavior (see here:, why isn’t this article titled

    “Patent troll Apple declines to join patent troll Microsoft in funding patent troll Intellectual Ventures”???

    I see the bias in this article that Mike mentions in his comment above. It seems like only one side of the story is being told here. Apple and Microsoft are both trolls too. A better question is how to stop the real problem: infringement by large corporations who muscle their financial power in the legal system, which obliviates small inventors, which is the very reason Intellectual Ventures came to be so they could protect inventors. If there is no infringement, then the trolls wouldn’t have a case to stand on. Then this problem wouldn’t exist.

    • Thanks for the comment, Cathy. Apple is certainly no saint when it comes to patents and, as you point out, helped to spawn the Rockstar troll from the carcass of Nortel.

      But Apple is still in a different league than Microsoft, which has come to treat trolling as one of its core competencies, and has made “privateering” a part of its strategy. In Apple’s case, I think the Rockstar situation was a one-off and, in any case, it’s still significant that they’ve chosen not to back IV.

      • Actions speak louder than words. Apple not only financially supported a troll, but they also currently act as a troll.

        So because they’ve decided to not to back IV, for the time being, is significant to you for what reason, exactly? For the purpose of giving you something write a story about, claiming it is significant? Because I don’t see it.

        In all fairness, then, IV is not the only troll you should be identifying in your article’s title.

    • Who believes for a moment that “Intellectual Ventures came to be so they could protect inventors”? Please. IV was founded and is guided to produce a revenue stream based on exercising questionable patents, most of which they don’t have serious interest in implementing themselves. The Robin Hood analogy is supremely silly here. Myhrvold and company are not doing this to protect small inventors from big, bad corporations.

      • Apple is no Robin Hood either. I think Mike’s comment above provides a great insight about IV, in that they are a response to what companies like Apple created by their infringement and by not playing nice in court. This situation provides the basis for inventors to turn to someone like IV to license/sell their patents, simply because a small inventor does not have the financial resources to defend himself in court when pursuing an infringer the size of Apple.

        I think people need to see how a large corporation responds in truth to a patent holder, once they realize they are indeed infringing on his patent. Then the true Robin Hoods and King Richards will be seen.

  4. jnffarrell1

    Too clever by half. Trolls are not arm-length subsidiaries acting independently. They are entities set up for the express purpose of inflicting harm on competitors. Because lawyers claim lawyer client immunity from testifying about their conspiracies they can threaten great harm while collecting payoffs for not causing harm. Just representing a troll should be grounds for disbarment.

  5. Here we go again with author Jeff John Roberts and his bais against the patent system that protects inventors, and his obvious assumptions he makes. Just search for all articles written by him here on GigaOm and you’ll clearly see the point.

    So here’s one:

    Roberts tries to suggest that Apple is “tired” of trolls/trolling behavior, as stated in the summary of the article, as provided by GigaOm/Roberts:

    “..but this time Apple, WHICH IS TIRED OF TROLLS, has declined to fund it.”
    (Emphasis added.)

    On the contrary, Roberts’ very referenced Reuters article states “Intellectual Ventures declined to discuss investments. Microsoft, Sony, Intel and Apple also would not comment. It is unclear whether Intel and Apple could still opt to invest in IV’s vehicle at a later time.”

    So, if Apple has not made any comment on the matter, and if Apple actually did invest in the past, and because it is unclear if Apple may opt to invest at a later time, and because Apple, at this very moment, is actually performing its own “patent trolling” with Apple-owned “RockStar” (link:, how can Roberts make the assumption that Apple is “tired of trolls”?

    Easy. It is because of Roberts’ bias. I personally would not take anything Roberts says regarding patents with a grain of salt. Does it get readership? Probably. Is it factual? Probably not.

    This article should go under the “Opinion” column on

    • Mike, I appreciate you taking the comment but please give my argument a fair shake. I am not “biased” against inventors and anti-patent. It’s not fair to conflate criticism of IV and patent trolls with a bias against inventors.

      I think you should supply a more measured position that takes account of whether the patent system is working as designed, rather than railing about my biases.

      In this debate, it’s easy to take the position that patents and innovation are one and the same. They’re not. Patents are a government monopoly handed as part of a larger industrial policy. Entities like IV attempt to arbitrage that system, and there’s no evidence that this is benefiting the overall economy, which is what the patent system is supposed to do. It is not supposed to be a source of corporate welfare for those looking to game the system.

      • Thanks for responding back, but you dodged the point made in my comment, namely, what say you about your assumptive claim that Apple is “tired of trolls”, when clearly they are not tired of trolls when they perform their own trolling? (Unless Apple is tired of itself.)

        Are you trying to simply gain readership by using a half-told story to do so? Or something else. Please enlighten us.

      • You said, “Entities like IV attempt to arbitrage that system, and there is no evidence that this is benefitting the overall economy, which is what the patent system is designed to do.”

        1) If there is no evidence that this is benefitting the overall economy, one cannot make the illogical jump that this is then hurting the overall economy.

        Here’s an analogy that shows the illogical jump you are making:
        Premise 1: There is no evidence that drinking a cup of wine during pregnancy hurts the fetus.
        Conclusion: Therefore, drinking a cup of wine during pregnancy hurts the fetus.

        Simply put, because there is no evidence, one cannot make such a conclusion. Drinking a cup of wine might be beneficial, might not be beneficial, or might be beneficial (or harmful) during certain conditions. And in order to make ANY determination at all, you would need evidence. Having no evidence that something is good does not mean that that something is bad. It simply means you have no evidence.

        2) “…benefitting the overall economy, which is what the patent system is designed to do.”

        Where is your supporting evidence for the claim that the patent system was designed to “benefit the overall economy”? I see THIS very assumption as the culprit of your bias in all of your articles.

        Article One, section 8, clause 8 of the U.S. Constitution established the basis for creating the U.S. patent system:

        “The Congress shall have power … To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;”

        I fail to see anything stated in this clause that the purpose of “securing for limited times to inventors the exclusive right to their discoveries” is to “benefit the overall economy”. Rather, the purpose is to “promote the progress of science and useful arts”. And this is to be accomplished how? By securing exclusive rights to inventors.

        The focus was on granting rights to individuals, because the framers of the Constitution saw that there was power in the freedom and creativity of the individual, as is evidenced in the theme of the vast majority of the very literature of the very authors of the Constitution.

        By saying that the purpose is to “benefit the overall economy”, it is clear that your view of the patent system is NOT to protect the rights of individuals, because you give the “overall economy” precedence over the “rights of inventors”.

        Again, you miss the entire spirit of the patent system, which was designed to do what? To do this:
        Secure inventors the exclusive right to their discoveries for the purpose of promoting the progress of science and useful arts.

        Now, benefitting the “overall economy” may result as a byproduct, but it was not the primary focus. If the “overall economy” becomes the primary focus, then what of the rights of individual innovators with respect to “overall society”. Preferring society over the individual leads toward socialism and Marxism, and we do have evidence of that harming innovation and the progress of science and useful arts when compared to the progress accomplished by a nation of individuals empowered with the freedom of and protection over creativity. And the patent system was designed for inventors. Not for society. Inventors comprise society, so we need to empower them. Society will then naturally balance itself out. But focusing on society first would lend itself to stripping rights away from inventors when deemed necessary, and this power would be totalitarian, and specifically ANTI-progress.

        I seriously think you should take another look at the purpose of the patent system, with the individual in mind. This is where true innovation lies.

        Look, I know you can’t teach an old dog knew tricks, but I highly encourage you to have an open mind and see both the logical fallacy in 1) and the truths mentioned in 2) above.

        • spixleatedlifeform

          Um, not to knit picks but you used two negatives (harm) to try to disprove an inferred negatively inferred positive. Does NOT equate similarly.
          When non-inventor owned monopoly restricts competition and innovation, the results conflict directly with the intent of the entire patent concept.
          Imagine if the inventor of the buggy whip used his patent (acceleration motivator) to bar the invention of engine speed control for transport purposes?
          Not that that may have been beneficial to the environment but…! Catch the drift?


          • Well I shall state it differently, with the same result:

            Premise 1: There is no evidence that drinking a cup of wine during pregnancy benefits the fetus.
            Conclusion: Therefore, drinking a cup of wine during pregnancy hurts the fetus.

            This is analogous to what Roberts is claiming, and, yet again, such a conclustion has no merit based on the premise.

            And yet you said “When non-inventor owned monopoly restricts competition and innovation, the results conflict directly with the intent of the entire patent concept.”

            Worded more clearly: When non-inventor owned monopolies restrict competition and innovation, the restriction of competition and restriction of innovation conflict directly with the intent of the entire patent concept.

            I find it very difficult to follow this logic. First, said “monopolies” are not perpetual. They are time-limited. Second, the intent of the entire patent concept is to secure inventors the exclusive right to their discoveries, and said securement is for said limited time.

            Here are just some of the benefits:
            1) for a limited time, an inventor’s discovery is restricted from being stolen or used by others
            2) because of such restriction, MONOPOLISTIC BEHAVIOR IS DISCOURAGED by entities having unfair advantages over the inventor
            3) the patent protection provides the inventor a limited time to market and/or produce his discovery, however the inventor best sees fit (he could desire to start a business, launch a product, or enhance/improve an existing business or product by selling/licensing his invention, or even compete in the market by provided a competitive advantage over said existing business or product)
            4) because the inventor has such protection, INNOVATION IS ENCOURAGED, simply because there is no fear of being trampled by larger, more financially able, entities.
            5) those with the gift of innovation can freely continue to use their gift of innovation (freely is used lightly here, as obtaining a patent is not free nor cheap)

            Remember, ingeniunity is not determined by the size of the entity, but by the individual mind of the inventor.

            • spixleatedlifeform

              For someone so versed in the intricacies of Patents you seem to have missed a recent development, that being the recent change in who gets a patent, regardless of who actually creates the concept. It now goes to whoever files first, even if it was stolen.
              Now, you are not alone in being familiar with the patent process. The USPTO makes no restrictions on who can create an account, have access to all their published information, even search their entire hold. And if you have the financial means, you can even apply–if you follow all their rules (took me several days just to find their blindspot glossary of terms on their website) once you locate their instructions (obviously designed by an engineer who made numerous assumptions, just like the SEC has done).
              Look, I’m not critical of patents, per se. (Crimony! If only the vast majority of patents owned by US corporations could be forced to utilize their patents by manufacturing them here instead of using foreign slave labor…!) I and most others only object to the trolls and patent syndicates (try MPEG-LA, for one instance) who act like those proverbial oil companies buying innovations that increase mileage and bury them to preserve their profits or using the stock markets to destructively manipulate a target company’s stock into oblivion. True or not, the metaphor applies.
              Take for instance someone who creates, designs or discovers and develops something on a PC running a specific (unnamed) Operating System yet what is invented has nothing to do with that Operating System. Does the corporation who owns the “rights” to that OS program have the right to demand royalties and license fees just because the inventor used a Home Edition instead of a “Pro” version or even a Commercial one?
              In this so entirely integrated world, you can’t even take a dump without owing someone something. Too bad they can’t be paid in fresh sphincter product.

              As to what the author said, he made it a point to note that apple has been targeted by numerous lawsuits by a bevy of patent trolls and may not like how it feels, even to the point of altering its behavior (not too likely, but one can always hope.) And make no mistake, the patent trolls are entirely different from inventors. They manufacture nothing. They create nothing. They only extort by virtue of the enormous expense of trials in the US court system and their lobbying efforts to continue without consequence for failing in court (assuming winner’s costs, etc.) is particularly galling in light of all the other consequences of the Economic Royalists’ activities.


            • I seemed to have missed a recent development of the “first to file” provision of the AIA? That’s quite an incorrect assumption. Anyone who follows patent law knows of the AIA, and that the US switched from a first to invent to a first to file, which went into effect in 2013.

              You said “patent trolls are entirely different than inventors. They manufacture nothing. They make nothing. They only extort by virtue of the enormous expense of trials in the US court system…”

              Wrong again. Apple is a patent troll. Apple creates products. Moreover, when Apple INFRINGES on other patents and end up in court, they use their financial power to take small inventors to the cleaners, so much so that, even if the small inventor has its legal leg to stand on with patent protection, it’s not even worth the legal battle. And it is for this reason (infringement by big bullies and long drawn out legal battles) that entities like IV exist. They fill a market need — providing inventors a way to defend their patents in the world of rich infringers, who, by their infringement, their non willingness to give credit where credit is due via patent licensing, and their unethical legal maneuvers, damage innovation. Entities like IV are a response to what they created, and the whole problem will disappear once infringers stop infringing on the rights of inventors. Then there is no legal basis for any suit in court. Q.E.D.

  6. Dave Van Allen

    Wasn’t it Google’s Eric Schmidt that was quoted as saying that incumbents don’t innovate? It sure seems like Microsoft and Sony, kings of their respective mountains, are using old patents to stunt innovation. Why can’t they just innovate along with the rest of the world?

  7. Michael W. Perry

    Bravo Apple! Now put some pressure on Congress to reform these trolls into oblivion. One obvious fix would be to treat patents like trademarks. Those who apply would have to quickly market and use their ideas. They couldn’t lurk under a bridge, waiting for someone else to bring an idea to market and then attack them.

    • musesum

      Trademark requirement is a good idea, similar to patent application under “Petition to make special”, which assumes that you need patent protection in order to make the product. The exception would be IP research organizations, such as SRI, that licenses new IP, but (as far I can tell) doesn’t troll 3rd party IP.

    • shparekh

      Exactly my point! Not familiar with the technical differences between a patent and trademark – but I completely submit to anything that says – a patent approval comes with a commitment to launch the invention as a product within a certain amount of time. There are so many patents that are out there preventing small businesses from starting a viable business because the big companies (Apple included) sit on patents that do not make a business sense for their business’s size. Thus preventing smaller niche businesses from creating products that will help a segment of people.

      • If you “completely submit to anything that says — patent approval comes with a commitment to launch the invention as a product within a certain amount of time,” then you truly don’t understand what a patent is. Please see my other comment posted on this page.

        My authority on the matter? I am an inventor and have patents.

    • Wrong. You do not understand what a patent is. Patents do not grant anyone the right to produce anything. Rather, patents are a form of protection, preventing others from using an inventor’s patented invention. A patent grants absolutely zero rights to an inventor to produce.

      Your suggestion that patent owners must quickly use and market their ideas misses the point entirely. For example, if I have a patent related to an implementation to provide a more secure NFC communication, must I then produce a product having this? What if, in my attempt to produce my product, I must use NFC, which might be patented by someone else? So how can I reasonably be required to produce when my product infringes on other inventions? So in what use case should I produce my product, because the use case scenarios could apply to phones, tablets, barcode scanners, etc, all of which have some form of patent protection of which I would infringe.

      Simply put, people who suggest “a requirement to produce should be a restriction placed on patents” simply do not understand what a patent is.

      My authority on the matter? I am an inventor and have patents.

      • To add to Mike’s point. If I as a single person in my garage come up with a patentable idea or product should I not be allowed to try and sell the patent. Starting a company big enough to produce and market a physical product may be to hard for me to accomplish but going around to companies already in the industry trying to sell or license my patent should be an option. I should not have to produce it myself.

        • Fred Fnord

          Atmosphere’s getting thick in here from all the FUD.

          Right now, the typical approach seems to be: person comes up with an idea. If he’s at a company that can exploit that idea, then they file a patent and proceed to do so.

          If he’s not, then he files a patent himself, and then goes to a company and sells his patent to them, at which point they carefully watch other companies to see when they start using the ideas in the patent, and then sue them for damages, preferably enough money to destroy the company because it just makes sense to squeeze every last cent out of the company that you can.

          Now, remind me exactly how this is beneficial to progress or society? And I’ll remind you that fewer than 1% of patents filed by individuals are ever licensed for use in a product. So apparently there aren’t quite as many lone inventors out there coming up with fabulous ideas and then selling them for millions of dollars as you think there are.