Patent Troll Intellectual Ventures Claims Its Layoffs Are Because It's Invented A New Way To Buy Patents

from the a-patent-in-spinning-the-press dept

Times are tough for a patent troll, apparently. A year ago, we noted that Intellectual Ventures -- the world's largest patent troll, who brought in billions of dollars by getting companies to pay up a shakedown fee to avoid lawsuits over its giant portfolio of patents (mostly cast off from universities who couldn't find any other buyers) -- was running out of cash. While IV did convince Microsoft and Sony to dump in some more cash, IV's litigation strategy is in shambles. Various lawsuits are dropping like flies without any of the big wins that IV promised.

Meanwhile, while its heavy lobbying may have helped to kill the latest attempts at patent reform, the Supreme Court's big ruling about software patents in Alice v. CLS Bank suggests that many of IV's patents just became worthless.

So it's little surprise at all that the company has just announced that it's laying off 20% of its staff -- likely about 140 employees. But, of course, IV's only real skill has been spinning the tech press into believing whatever bullshit story it's come up with to justify its innovation taxing operations. And thus, with these layoffs, it's right back into spin mode, presenting the most spectacularly ridiculous justification for the layoffs.

Does IV point to its litigation losses? Nope. Does it mention the Alice ruling? Hell no. How about the fact that many of its early backers have now turned into vicious opponents? Not at all. The fact that its in-house inventions have yet to lead to a single viable product on the market? Nope. The reason given? Apparently IV would like you to believe that it needed all those people to invent a new way to buy "ideas" in bulk and now that that's done, they're no longer needed. I'm honestly curious if IV's co-founder Edward Jung said the following out loud without laughing, or if it was just delivered to Bloomberg reporter Ashlee Vance in written form to avoid the risk of guffawing at the pure ridiculousness of it all:

Edward Jung, IV’s co-founder and chief technology officer, insists that the business is doing fine. It’s true, he says, that not as many companies bought into the patent funds as IV expected, but he says the company is happy with its returns.

The layoffs, according to Jung, represent part of the company’s evolution. IV was the first company to try to amass so many patents, and it had to hire hundreds of people to invent the processes for buying ideas in bulk. People were needed to sort through patents, acquire them covertly, think up complementary ideas, and deal with the associated paperwork. “We have more data than anybody and have analyzed it over the years,” Jung says. “Our analysis has allowed us to save a lot of needless paperwork and become more efficient. We don’t need as many people to sift through and sort information now.” Much of the work has been simplified and automated.

Nice story, but... it's rewriting history. As we've noted, IV just bought up giant patent portfolios in bulk from universities who had rushed to set up tech transfer offices in the wake of the Bayh-Dole Act in the 80s, expecting to get rich from "commercializing" all of the "inventions" that their faculty produced. The reality was that the vast majority of tech transfer offices lost money because none of the patents were worth anything by themselves, and no one wanted to buy them. IV stepped in at the perfect time, allowing tech transfer offices to save themselves the embarrassment of failing to make any money (and actually costing universities tons of money) by selling a boatload of useless patents in bulk, just so IV could run around claiming it held tens of thousands of patents, and demanding big tech companies pay up so that IV didn't have to sift through all those patents to find something (anything!) to sue over.

Filed Under: buying ideas, inventions, layoffs, patent troll
Companies: intellectual ventures