Microsoft And Sony Double Down On Patent Trolling; Dump More Cash Into Intellectual Ventures

from the because-innovation-is-for-suckers dept

Wed, Apr 16th 2014 9:25am — Mike Masnick

Last fall, we noted that the world's largest patent troll, Intellectual Ventures, was running out of cash, which is somewhat incredible, given that it had previously claimed to have raised $6 billion in investments (though many of its earliest deals with tech companies were categorized as "investments" when they were really promises not to sue, combined with access to the patent bank) and a further $3 billion in licenses. It should take a long time to spend $9 billion when your company produces nothing that has ever been brought to market, but that's IV for you. As we noted in that story last fall, many of the tech companies that initially "invested" in Intellectual Ventures had no interest at all in re-upping, as they felt that the whole thing had been a bait-and-switch. They were initially told it was a "patent defense fund," not a giant patent troll itself.

However, while many of the companies have indeed avoided giving IV any more money, it appears that Microsoft and Sony were quite happy to dump a lot more cash into IV, which has now ramped up its patent buying efforts again (as well as its lobbying and political contributions in an effort to kill off patent reform). Microsoft, of course, has always been close to IV, seeing as it was started by the company's former CTO, Nathan Myhrvold, who is also a close friend of Bill Gates (who has directly helped IV get some patents). Similarly, Microsoft has become one of the most aggressive patent abusers over the last decade, increasingly relying on its stock of patents to make money from other people's innovations, rather than innovating on its own.

It is similarly no wonder that the company somewhat famous for having nearly all of its major success based on copying the work of others, is now trying to stop anyone else from doing the same without paying a massive tax. There was a time when Bill Gates said:

"If people had understood how patents would be granted when most of today's ideas were invented and had taken out patents, the industry would be at a complete standstill today... A future start-up with no patents of its own will be forced to pay whatever price the giants choose to impose."

And, now, via Intellectual Ventures and its own patent holdings, Microsoft seems to be trying to make sure Gates' prediction is a reality. It all fits in to the same paradigm we've observed for years. When you're young, you innovate. When you're old, you litigate. Microsoft appears to have given up on innovation, but is ramping up on litigation, and re-investing in patent trolling via Intellectual Ventures is merely the latest step.

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Filed Under: innovation, patent trolling, patents
Companies: intellectual ventures, microsoft, sony

13 Comments

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Ninja (profile), 16 Apr 2014 @ 8:54am

Microshafting competition. Soon we'll see some scroogling along the way.

But Gates could be wrong, after all my computer has more than 640k and it isn't nearly enough ;)
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Anonymous Coward, 16 Apr 2014 @ 9:40am

Re:
Demerits for the misquote on Bill retarded Gates, but canceled by the word "Microshafting".

But that is why they have to thrust it so many times... ya know, so people can feel it!
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Anonymous Coward, 16 Apr 2014 @ 10:10am

And we have to finance that shit
It's very hard to find a decent laptop computer which does not have Microsoft Windows pre-installed. Your only options are a limited choice of Apple models (great laptops, but not always what you want), low-end brands like Positivo, or if you are willing to go the import route a few specialty Linux laptop companies. Major companies like Dell tease you by mentioning RHEL or Ubuntu as options in the specifications part of the page, but when you go to the buy option it's not available as an option on the operating system chooser. The Windows refund used to be an option, but has been changed so you also have to give back the laptop.

Some people say Microsoft has changed and there is no reason to hate them anymore. Yeah, right.

As for Sony, two words: Sony rootkit.
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Mike Shore (profile), 16 Apr 2014 @ 10:18am

They are playing within the rules. They want to make money. They follow what the laws allow. All fine and well. But don't expect the rest of us to have any respect for those laws.
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That One Guy (profile), 16 Apr 2014 @ 10:42am

'Why no your honor, /I/ did not rob that man...'
'... I paid someone else to do it for me.'

Funding patent trolls allows them to remain squeeky clean when asked in court whether or not they're going out shaking down their competition with 'dubious' patents, while allowing the troll to do the competition crushing for them.

Not to mention providing funding means the trolls aren't likely to go after them with their massive numbers of incredibly vague patents, so it's a win-win all around for big companies like that, they get to indirectly harass and attack any competition before it can get off the ground, and defend themselves from suffering the same fate.
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Ninja (profile), 16 Apr 2014 @ 11:09am

Re: Re:
Aw, come on, even if misquoted it fits perfectly! And that's probably the only thing people remember from what he said at the time!
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Anonymous Coward, 16 Apr 2014 @ 11:49am

Since patents are a measure of innovation I should get a patent on walking, talking, breathing, living, dying, and eating. That will make me the most innovative person on earth.
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SpaceLifeForm, 16 Apr 2014 @ 1:29pm

F**king Crazy
Along with people inside the NSA, DOJ, etc, etc.

Or maybe, they are really Cylons.
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Anonymous Coward, 16 Apr 2014 @ 3:08pm

Why would IV even think of keeping that money in the corporate bank?

I'm sure if you look at the books they have been busy funding all sorts of innovative research fronts.

Rule #1 when you are stealing money, you'd better not have it on you if you get stopped by the authorities.
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DB (profile), 16 Apr 2014 @ 4:20pm

To amplify on the "investment" aspect of the shake-down: it's a tax-advantaged way for the companies to pay, and it doesn't directly impact the P&L statements.
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BernardoVerda (profile), 17 Apr 2014 @ 1:12pm

But they *are* managing to make Apple look good (by comparison).
At least Apple -- for all it's "Intellectual Property" whining and bullying -- actually makes and sells an actual, useful product (and of generally good quality, even).
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Samir Shah, 20 Apr 2014 @ 2:17am

Patent Trolling
If Intellectual Ventures is really for patent defense. Microsoft should come out and say loudly in open that Microsoft supports Patent Troll bill.
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Samir Shah, 20 Apr 2014 @ 9:25am

Patent Trolling
Microsoft should clearly demarket her own patents and Intellectual Ventures patents. Microsoft should openly say that she will try to monetize her own patents and will use Intellectual Venture patents for defensive purpose only.
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