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Intellectual Ventures acquires hundreds of patents for new troll fund

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It’s been a good year for patent trolls, and now the biggest troll of them all wants to keep the party going: a report reveals that Intellectual Ventures has acquired more than 200 new patents, which will help IV extend its legal tentacles in fields like wireless infrastructure and cloud computing.

In case you’re unfamiliar, IV’s peculiar brand of innovation involves acquiring old patents and using them to arm thousands of shell companies, whose sole business is to extract licensing fees from productive businesses.

News of IV’s restocked war chest comes after earlier reports that initial investors, including Apple(s aapl), had declined to participate in IV’s newest trolling fund. According to the report, by law firm Richardson Oliver and spotted by IAM, the fund is on track since IV purchased 16 percent of all available patent packages in the first half of 2014. A chart by the firm suggests it paid $1-$2 million in most cases; here’s a partial look:

Source: Richardson Oliver.
Source: Richardson Oliver.

The chart shows six patents related to the cloud computing industry, which has so far escaped the rampant patent trolling that has plagued mobile phone and app developers, but could now be prime picking for IV in the coming year.

IV is well-positioned to exploit the patents thanks to Senate Democrats, who in May killed a bipartisan reform bill that would have undercut many of the economic incentives for patent trolling. IV has also been active on the lobbying front, filing to start a PAC this year and donating sums of money to Senator Dick Durbin (D-Il), who is closely allied to the trial lawyer lobby that reportedly helped to derail reform.

If there’s a dark cloud for IV, however, it may be the growing public skepticism towards patent trolls, who now account for 67 percent of all new lawsuits. The trolls have received harsh treatment from the likes of NPR and the New York Times, while the Supreme Court’s repeated criticism of slip-shod patents may finally be making it harder for companies to abuse them.

Meanwhile, respected tech figures like Marco Arment have lashed out at IV’s business model as “cowardly” while inventors like Tesla’s Elon Musk have questioned the value of patents to begin with.

9 Responses to “Intellectual Ventures acquires hundreds of patents for new troll fund”

  1. Thomas Krafft

    Are we ready yet to declare, once and for all, patents for software code and communications across established networks are invalid, null and void?

    • Are you ready to give up protection for inventors and allow large corporations to just take whatever they want with no recourse in monopolistic fashion?

  2. There’s a great write-up on IP Watchdog on how the real reason Musk is opening up his patents is to combat the growing hydrogen-powered vehicle segment –

    To me the irony is how Musk, Cuban, etc. all built their businesses and war chests off of patent protection but now want to destroy that same patent protection for potential disrupters or startups…

      • Pray tell me Jeff, what are the qualifications to be considered a “serious patent academic”? Are you in that category, because you cite yourself in all your articles, as if you are preaching truth, but really, all I see is your biased opinions.

      • And I’m still waiting for you to answer to my question above. It’s a simple “yes” or “no”.

        And just FYI: It’s OK to change your views, especially when new information has been introduced. To me it’s like people who hold on to Darwinism as the explanation for the first living cell, intentionally refusing to recognize the information processing system (DNA et al) necessary for the first living cell to exist, holding on to an old dogma, ignoring the fact that we have discovered more about the simple living cell over the course of the past few decades, much later and far more than Darwin would have ever imagined with his elementary and short-sighted “protoplasmic view” of the cell. And people who hold on to this view, intentionally ignoring the simple fact that we know of no other cause other than intelligence that has the capacity to produce that particular effect — namely, complex, sequence specific, encoded information that, when decoded by biological software, performs specific functions in the cell.

        I once believed Darwinism explained the origin of the first life, but as new information and arguments were presented, I changed views. So, it’s OK to see the light with respect to the patent system and inventors. So, answer the question whenever you’re ready, I guess.

      • Jeff that is a serious and absurd statement, and personal disparagement is unprofessional and unbecoming. If you are going to make such statements, please let us know who your sources are and what exactly they said.

        Your statement not only calls into question your professional judgement (unverifiable personal attacks), but your knowledge of this space as well. Gene is a respected author and practicing patent attorney, and his blog is one of the most well-read and influential IP blogs out there.

        Also, you are wrong in your article that IAM IV bought 16% of available portfolios in 2014 – that is not a credible statement to anyone who understands the patent market. The IAM article says they bought that percentage of publicly available, SOLD portfolios. Huge difference.

        • Good luck with getting Jeff to admit he’s wrong, unless it’s a typo. Not only does he cite himself the vast majority of the time by linking to his own articles (making it seem his prose is truer than it really is), his opinions are unverified. And when he does link to an outside source, he tends to misinterpret what it actually says, just like you pointed out here. It must be really difficult to see, interpret, and write about reality through dirty, biased glasses, and doing so is a great disservice to true journalism.

  3. Question: How many patents has patent troll Apple acquired? When are you going to write about them and their bullying?

    >> IV … whose sole business is to extract licensing fees from productive businesses.

    And if those “productive businesses” are productive due to the fact that they are using patents without seeking licenses — a legal term we call “infringement” — then such “extraction” is 100% justified.

    Jeff, you need to wake up to reality and stop trying to cut off a bad limb of a tree, when the problem is actually caused by an infection in the tree trunk. What you should be writing articles about is how large corporations abuse their deep pockets and force inventors to give up when trying to enforce their patent protection, which forces inventors to turn to trolls who do have deep pockets who can actually enforce the patent rights on behalf of the inventors. Because this is the root of the problem: infringement and bullying by large corporations.

    >> IV is well-positioned to exploit the patents thanks to Senate Democrats, who in May killed a bipartisan reform bill that would have undercut many of the economic incentives for patent trolling.

    Jeff, was this bipartisan reform bill (the Innovation Act) actually going to provide reform? Apparently the senate didn’t think so, and took it off the table. Moreover, you have yet still to answer this simple question, and this is the most important question in any patent “reform” blog article you write, because it get to the core of “reform” for what the patent system is designed to do and whom and what it is designed to protect:

    “Would the Innovation Act have hurt (or will any other future legislation hurt) small inventors and empowered large corporations in the small inventors pursuit against infringement from the large corporation?”

    Yes or no, Jeff. You continue to dodge this question in ALL of your answers to comments.

    >> while inventors like Tesla’s Elon Musk have questioned the value of patents to begin with.

    False. Elon Musk is not questioning the value of patents. He is trying to rescue his hurting Telsa business because he is realizing that innovation is not the same thing as market adoption. No one is buying his expensive cars because there is a much cheaper alternative, and he’s trying to get electric cars to be adopted into the marketplace with his little “our patents are open” stunt. He starkly contradicts himself by saying “… as long as you use them per our terms”.