Via Slashdot, “World’s Largest Patent Troll Fires First Salvo.”
Slashdot has linked to a WSJ article (“Big Patent Firm Sues Nine Tech Firms,” Don Clark and Dionne Searcey, December 9, 2010) reporting that Intellectual Ventures LLC has “raised $5 billion [USD] to amass thousands of patents” and is now suing for their infringement.
WST reports that until recent suits, Intellectual Ventures LLC had operated on a negotiation model with large companies.
Let’s make something crystal clear:
Intellectual Ventures LLC doesn’t make, invent, develop, create, or patent anything.
They acquire patents applied for and registered by others. Presumably, these others are closer to the actual inventors whose inventions are the subjects of those patents.
WSJ quotes Melissa Finocchio, Intellectual Ventures LLC’s chief litigation counsel, as referring to litigation as a tool for monetizing patents.
I quote two passages I believe to be relevant to and in conflict with this business model:
Ms. Finocchio is, I’m sure, familiar with the Constitution of the United States. The intellectual property regime of the U.S., was founded upon Article 1, Section 8, Clause 8 of the Constitution:
“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.”
That right is alienable through licensing and assignment. Twisting that alienability into the Patent Troll business model requires giant blinders not to be seen as foul.
They are not acquiring patents in order to monetize those patents through marketing and manufacturing, but rather only through enforcement by threat of legal action.
Intellectual Ventures LLC has gone further than retaining counsel to litigate on its behalf, or hiring in-house counsel to negotiate and draft on its behalf. They have in-house litigators, and have conflated business with law firm. The difference between a law firm that makes its money by suing on behalf of it clients and a patent trolling business is this: A law firm is an association of professionals who represent injured parties; a patent troll acquires the right to injury and injury damages without having been injured.
The second passage I will quote is from the oath I swore [or affirmed] to become a lawyer. I swore that I would not “promote suits upon frivolous pretences; that [I would] not pervert the law to favour or prejudice anyone…”
Advising patent trolling as a business model – perverting the alienability of intellectual property rights to favour a company that creates, invents, develops, and sells nothing – strikes me as exactly the sort of thing I’ve been sworn to avoid.
Even RIAA creates and develops things. RIAA has a mandate to further the aims of the recording industry, though I disagree with its litigious method of doing so. RIAA develops and promulgates recording and production standards, such as the frequency compression algorithm for the pressing and playback of vinyl records.
Would the American Medical Association idly stand by if doctors used medical knowledge to industrialize the training of killers and torturers?
This is not a lawyer suing to allow an inventor to profit, and this is not an isolated incident of a lawyer here or there helping a company litigate for profit. This is a $5 billion industrial juggernaut whose business model subsists entirely on legal intimidation using other people’s works.
When will the state bars and the ABA step up and censure this abuse of the power conferred upon lawyers?
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Most inventors can not commercialize their inventions, even if an angel gives them millions of dollars to get started. Infringers should view inventors as their R&D department and offer to pay royalties in advance of any lawsuit. Since most established businesses have given inventors short shrift over the past 15 years, it was foreseeable that VCs would eventually scoop up patents and go after infringers.
I’m going to play devils advocate here and say you’re being a little too harsh on Intellectual Ventures. They are a natural evolutionary by-product of a system that intentionally creates artificial monopoly rights so as “to promote the Progress of Science and useful Arts”. Now its hard to deny that in and of themselves monopolies are bad things for competitors, customers, and virtually everyone except the monopoly holder. But they are tolerated because the incentive to innovate that they provide is thought by policy makers to outweigh the negative aspects of monopolies. This is so because in the long run slightly higher rates of innovation benefit society immensely. Now if you all of a sudden say to inventors you can no longer sell your patent to a so-called troll firm because troll firms don’t do anything and are evil, then inventors have less incentive to invent because the market value of their patents has taken a major hit. And that shows what purpose troll firms serve : they bolster that paramount incentive to invent and disclose new, useful, and non-obvious technologies in the first place.