Intellectual Ventures Tries To Rewrite The Script, Pretends The Plan Was Always About Making Stuff, Not Trolling

from the that's-complete-bullshit dept

And, here we go again. Intellectual Ventures, the world's largest patent troll and a general tax on innovation, diverting over $6 billion away from actual innovators, has always been really stunningly good at getting the tech press to repeat questionable claims about its "real intentions" and how it's helping to "drive innovation." Every time the negative press catches up to IV's really nefarious practices, it comes up with a way to try to spin the story around again, like that time it tried to claim its real goal was to help everyone sort through good and bad patents.

But the true story has never changed. IV bought up tens of thousands of crappy patents from University tech transfer offices that were desperate to get those patents off their hands to show some kind of justification for having a tech transfer office in the first place (many universities set up tech transfer offices thinking they would make those universities rich off of licensing patents -- and the reality is that the vast majority of them have lost tons of money). We've even heard accusations that IV helped pioneer a really cheap tax scam, getting companies to "donate" patents to universities, claiming they were worth lots of money for the tax writeoff, and then IV would buy them up on the cheap.

But the only thing IV has really done is to bully lots of companies, getting some to pay hundreds of millions of dollars to avoid lawsuits, and then suing many more. The fact that it's lost a bunch of those lawsuits recently, and rulings like CLS Bank v. Alice, mean that the actual value of IV's patent portfolio is rapidly dwindling. And its power to force companies to pay up is dwindling as well. That's why it was recently desperate for new cash (hey, where did that $6 billion go?) and even had to lay off 20% of its staff. No one believes the spin IV gave for those layoffs: that they had learned how to be "more efficient" in evaluating patent quality.

But now IV appears to be testing out its new spin, claiming that it's really now going to focus on making things rather than suing and shaking down companies. The company claims that was always the plan, but it wasn't. I've spoken to people who got the early IV pitch. That was never a real part of the plan. But, IV now realizes that the trolling label has stuck to it, so it desperately wants to create some product (any product!) that it can point to, in order to drop the troll claim. Nathan Myhrvold's ridiculous story about stopping Malaria with lasers isn't fooling anyone anymore.

Here's Business Week on IV's "transformation":

Having earned billions in payouts from powerful technology companies, IV is setting out to build things on its own. Rather than keeping its IP under lock and key, the company is looking to see if its ideas can be turned into products and the basis for new companies. The first wave of products includes an ultra-efficient nuclear reactor, a waterless washing machine, self-healing concrete, and a giant squeegee for sucking up oil spills. One country has asked IV to help lower its temperature, and another wants it to create robots that can replace migrant workers.

As part of its transformation, IV fired 20 percent of its employees, about 140 people, most of whom were tied to its patent business, on Aug. 19. A new team busy turning ideas into products has raised millions of dollars to fund a flood of IV-backed startups. A network of 25,000 independent inventors submits ideas for review by IV and earns royalties when products based on their ideas reach market. Says Edward Jung, IV’s chief technology officer and co-founder, “We have built an engine that can solve big problems.”

And yet, there's no evidence that any "big problems" have been solved. None. IV has always had its labs, but those were basically just for show to convince gullible journalists that something was happening there. But the difference between an idea and a viable product is a huge gulf, and IV seems to pretend it's the same thing.

But, IV is pretending this has always been the plan. It's just spent the last decade plus not building products so that it could take the time to build an engine that could build products -- even if it hasn't yet.

As far as Jung is concerned, it’s Silicon Valley, not IV, that has lost the plot. A former child prodigy and chief architect at Microsoft, Jung argues that venture capitalists have become obsessed with trifles such as social and mobile apps, while large corporations have pared back their research and development budgets. “Everything has moved toward the short term,” he says. “The public markets have gotten so efficient, and they’re not pleased when a CEO says, ‘Hold on. Give me 10 years, and I’ll figure this out.’ ” IV, he says, has been taking the long-term view all along. First it had to amass a patent portfolio. Then it needed to learn how to mine it for great ideas. Now it’s time to put those ideas to the test. Critics who only saw IV as a giant IP collector misjudged the company, he says. It will soon be pumping out dozens of revolutionary products.

Except note, again, the overvaluation of ideas to execution. People who execute and build successful companies know that execution is the difficult part. The idea is important, but execution almost always changes the idea anyway. Ideas morph quite a bit when touched by reality. And the whole "long-term/short-term" story is a popular one. We hear people claim it every few months, but it's also bullshit. Anyone who's spent any time in Silicon Valley knows that there are tons of companies making huge long-term bets. Yes, there are short-term things as well, but the big world changing things quite frequently come out of those "trifles". And that's because real innovation comes from taking ideas and learning from the market and continuing to innovate.

It's only the myth of the "big idea changing the world" that leads to thinking like this. But that's not how innovation actually works.

Either way, Business Week seems to have been suckered in by the same "laboratory" that IV loves to show every visiting journalist:

It’s impossible to tell the story of Intellectual Ventures without a visit to its laboratory in Bellevue. Spread across five buildings in an industrial part of the Seattle suburb, the campus is the workplace for 170 scientists, 40 of them Ph.D.s. They have access to more than 8,000 pieces of scientific equipment, including mass spectrometers, lasers, particle sizers, and a hydraulic airplane wing bender. If the engineers need to weld metal or saw wood, they can do that in a giant machine shop. Scientists who work in the IV labs must come up with ideas, test them, and then either patent them or move on to the next thing. Soon the lab will relocate from this 50,000-square-foot setup to an 80,000-square-foot one.

Right, but what product have they made that is actually on the market? We'll wait. And wait.

Filed Under: nathan myhrvold, patent trolling, pr
Companies: intellectual ventures, iv

DailyDirt: Kill All The Mosquitoes

from the urls-we-dig-up dept

Mosquitoes are a serious pest. They spread terrible diseases like malaria and dengue fever, and they're just generally annoying to people. So it's no surprise that quite a few methods have been developed to kill them off in significant numbers, if not entirely. There are actually thousands of different kinds of mosquitoes, and some of them are completely harmless to humans. But if we could target just the ones that spread diseases, we could prevent an enormous amount of death and suffering. Is it really safe to drive mosquitoes to extinction? Here are just a few ways we're trying to do it (regardless of whether we should).

• Mosquito-borne diseases kill about a million people each year and have killed more people than war, cancer or heart disease. Releasing a genetically modified mosquito could push these insects to near extinction, and this appears to be a very effective way to kill off mosquitoes. [url]
• DDT was once the weapon of choice for killing mosquitoes, but these bugs have developed a resistance to DDT and other chemical pesticides. Researchers are learning more about how DDT resistance develops in mosquito populations, but spraying different chemicals might not be the best solution for controlling mosquitoes. [url]
• For a few years, Nathan Myhrvold has been promoting a laser system to shoot mosquitoes. So far, this Death Star for mosquitoes doesn't seem to be very practical, but zapping insects with lasers is an entertaining idea at least. [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post via StumbleUpon.

Filed Under: ddt, diseases, extinction, gmo, health, lasers, medicine, mosquitoes, nathan myhrvold, pesticides

7 Things You Missed If You Didn't Read Wired's Big Story On How The NSA Is Killing The Internet

from the it's-not-almost dept

Steven Levy, who specializes in massive articles looking into aspects of the tech industry, has a new one for Wired, called How the NSA Almost Killed the Internet. It basically looks at how the NSA legally coerced the tech companies into having to comply with certain court orders to hand over information, and how the tech companies have been gagged from explaining what's going on. And then... he gets the NSA's side of the story. Much of what's in there is stuff that you probably already know (especially if you read Techdirt regularly), but I wanted to call out a few tidbits that I hadn't seen or heard anywhere else before:

1. Google doesn't charge the government for requests for information:

   FISA requires the government to reimburse companies for the cost of retrieving information. Google says it doesn’t bother to charge the government. But one company says it uses that clause, hoping to limit the extent of the requests. “At first, we thought we shouldn’t charge for it,” says an executive of that company. “Then we realized, it’s good—it forces them to stop and think.”

   This is kind of a "damned if you do/damned if you don't" situation. I know plenty of folks in the civil liberties community go back and forth on it. When companies do charge, then you see articles about how companies are "making a profit" off of violating our privacy. If they don't charge, then you see arguments about how they're making it too easy for the government to get info. Either way, the standard has been to charge basic costs, so it's interesting to see that Google doesn't charge at all, probably betting on the fact that if they did, it would be misrepresented. Of course, the fact that they don't might be misrepresented as well.
2. The NSA has no response to fear of future abuse of programs beyond "we'd never do that." Seriously.

   Critics charge that while there is not yet any evidence of massive abuse of the NSA’s collected data, there is also no guarantee that a future regime won’t ignore these touted protections. These officials discounted that possibility, saying that the majority of NSA employees wouldn’t stand for such a policy. “If that happened, there would be lines at the Inspector General’s office here, and at Congress as well—longer than a Disneyland line,” Ledgett says. (The fates of several NSA employees-turned-whistleblowers indicate that anyone in that hypothetical queue would be in for a ride far wilder than anything in Anaheim.)

   Sure, except there's a very long history of the NSA and the FBI doing exactly the opposite (the claim of no evidence of massive abuse is not actually true). And, as Levy notes in that final parenthetical, the way whistleblowers are treated these days would probably shorten that line quite a bit.
3. Keith Alexander admits that companies were compelled to comply and admits that we should stand up for the companies not to be harmed by all of this:

   “This isn’t the companies’ fault. They were compelled to do it. As a nation, we have a responsibility to stand up for the companies, both domestically and internationally. That is our nation’s best interest. We don’t want our companies to lose their economic capability and advantage. It’s for the future of our country.”
   
   Those words could have come from a policy spokesperson for Google, Facebook, Microsoft, or Yahoo. Or one of the legislators criticizing the NSA’s tactics. Or even a civil liberties group opposing the NSA. But the source is US Army general Keith Alexander, director of the NSA. Still, even as he acknowledges that tech companies have been forced into a tough position, he insists that his programs are legal, necessary, and respectful of privacy.

   This is just bizarre. If he doesn't want the companies to lose their economic capability and advantage, maybe he shouldn't have undermined a large portion of it.
4. Companies were given about 90 minutes to respond to the (misleading) claims in the original PRISM article that they had given the NSA direct access to their servers.

   “We had 90 minutes to respond,” says Facebook’s head of security, Joe Sullivan. No one at the company had ever heard of a program called Prism. And the most damning implication—that Facebook and the other companies granted the NSA direct access to their servers in order to suck up vast quantities of information—seemed outright wrong. CEO Mark Zuckerberg was taken aback by the charge and asked his executives whether it was true. Their answer: no.
   
   Similar panicked conversations were taking place at Google, Apple, and Microsoft. “We asked around: Are there any surreptitious ways of getting information?” says Kent Walker, Google’s general counsel. “No.”

   This remains one of the most unfortunate bits about the Snowden leaks. While I think that Barton Gellman, Glenn Greenwald and Laura Poitras have done an incredible job with most of their reporting, the original PRISM stories that appeared in the Washington Post and Guardian both came out rushed and were misleading, which is still impacting how people are reporting on these things today. The PRISM program and Section 702 of the FISA Amendments Act have serious issues that need exploring, but it's all been distorted by the misleading initial claims, which implied things that just weren't true.
5. The NSA claims it uses the very same encryption that it tries to push everyone else to use. Yes, the same encryption that Snowden docs have revealed was compromised by the NSA.

   And the NSA insists that, despite the implications of those Snowden-leaked documents, it does not engage in weakening encryption standards. “The same standards we recommend are the standards we use,” Ledgett says. “We would not use standards we thought were vulnerable. That would be insane.”

   Sorry, but no one believes that one at all. The clear takeover by the NSA of NIST standards shows that's clearly not true.
6. The NSA still doesn't realize how serious all of this is. They still think it's just been blown out of proportion.

   They understand that journalism conferences routinely host sessions on protecting information from government snoops, as if we were living in some Soviet society. And they are aware that multiple security specialists in the nation’s top tech corporations now consider the US government their prime adversary.
   
   But they do not see any of those points as a reason to stop gathering data. They chalk all of that negativity up to monumental misunderstandings triggered by a lone leaker and a hostile press.

7. Patent troll Nathan Myhrvold is also completely clueless about national security:

   Former Microsoft research head Nathan Myhrvold recently wrote a hair-raising treatise arguing that, considering the threat of terrorists with biology degrees who could wipe out a good portion of humanity, tough surveillance measures might not be so bad. Myhrvold calls out the tech companies for hypocrisy. They argue that the NSA should stop exploiting information in the name of national security, he says, but they are more than happy to do the same thing in pursuit of their bottom lines. “The cost is going to be lower efficiency in finding terrorist plots—and that cost means blood,” he says.

   This is stupid on so many levels. First, the old argument that it's somehow equivalent of tech companies and the NSA to make use of information -- a claim that Levy ridiculously repeats multiple times in his article -- is a line that has been debunked so many times it's really beneath Levy to give it any life at all, let alone refuse to point out how stupid it is. Companies provide a direct service to users, and they make a decision: If I give this information, I get this service in return. It's a decision made by the consumer, and a trade-off where they decide if it's worth it. We can argue that people should have more information about the costs and benefits, but it's still a trade-off where the final decision is their own. The NSA, on the other hand, is not providing a choice or a trade-off. They're just taking everything in exchange for nothing. And, oh yeah, they have guns and can put you in jail -- something no company can do.
   
   Second, Myhrvold incorrectly buys completely the line that all this data collection has been helpful in stopping terrorists. There's just one problem: there is no evidence to support that. Besides, based on his idiotic reasoning, we might as well just do away with pretty much all our rights. For example, I'm pretty sure that we could all have protected Myhrvold more completely if there were video cameras streaming video of everything he did within the privacy of his own home, cars, office or just walking around, right? We could certainly make sure that no one was attacking him or, better yet, that he wasn't about to attack anyone. The cost of not spying on every moment of Nathan Myhrvold might mean "blood." So, based on his own logic, we should violate his privacy, right?

All in all there's a lot in the article that's worth reading, but those were a few key points that really stood out.

Filed Under: keith alexander, nathan myhrvold, nsa, rick ledgett, steven levy, surveillance, tech industry
Companies: google, yahoo

Patent Trolls Ramp Up Lobbying Efforts

from the good-luck-with-that dept

As it looks like the government might actually move towards real legislation to at least try to tackle the patent troll problem, the patent trolls are realizing that they need to ramp up their lobbying efforts with Congress. The article is kind of funny in a variety of ways, arguing that the patent maximalists haven't had the ear of Congress forever:

The attack on so-called trolls has obscured the complexity of patent-rights issues, said Adam Mossoff, a law professor at George Mason University School of Law. That’s in part because “patent companies weren’t active in lobbying or PR,” Mossoff said. “They let patent skeptics in the academy and in think tanks and firms that oppose them set the terms of the patent policy debate.”

No offense, but that sounds like someone who just joined the discussion here. From 2004 until 2011, there was a long, intense debate about patent reform, with early proposals having some aspects that might have curtailed at least some of the trolling problem. But they all got squeezed out because massive patent holders absolutely were extremely active in lobbying and PR. Yes, in many cases it came from the pharmaceutical side of the fence, as the pharma industry effectively killed patent bills every Congressional session, but the idea that patent maximalists haven't had their say is simply untrue.

Then there's this, from Intellectual Venture's new boss lobbyist, Russ Merbeth:

The current debate about patent trolls “seems to create uncertainty around patents generally,” said Russ Merbeth, chief policy counsel at Intellectual Ventures. “From our perspective, that’s going to have a long-term negative impact on American competitiveness.”

That's an up-is-down, day-is-night kind of statement. The uncertainty around patents has always been whether or not (and when) actual innovators were going to get sued for doing something obvious by patent trolls and hoarders like Intellectual Ventures. That's the uncertainty. The fact that innovative companies had to hire more lawyers than engineers? That creates uncertainty and has a long-term negative impact on American competitiveness. It's the companies that are actually innovating that are getting sued. Meanwhile, companies like Intellectual Ventures, who have never brought a product to market ever, sit back and collect billions of dollars from the actual innovators? That's a recipe for disaster. You're taking money out of the hands of innovators -- those who expand and grow the economy, improve our competitiveness and generally improve our lives -- and giving it to a bunch of lawyers who aren't doing that at all?

Last month, IV’s Myhrvold, the former chief technology officer of Microsoft, made a visit to the Hill to argue that his firm, with its thousands of patents, plays an important role in the tech industry ecoysystem by providing a secondary market for patents. The system is generally working, he said, and the industry should hold off on new changes and let the America Invents Act — the patent reform legislation passed in 2011 — take full effect.

“Fundamentally, the term patent troll gets thrown at anybody that is a plaintiff in a patent case,” he said during an event in D.C. “If you are in favor of invention, I think you have to be in favor of invention rights.”

By the way, remember the Mossoff quote above about how the patent folks weren't active -- does he know why the America Invents Act finally passed in 2011? Because it finally got watered down enough that Intellectual Ventures stopped its shady practices to block the bill. Intellectual Ventures was heavily involved in the patent reform debate last time around, contrary to Mossoff's historical revisionism.

As for Myhrvold's claims here, note his careful word choice. He talks about "invention" -- not innovation. The two are different, but the fact is that Myhrvold isn't even talking about invention. He's talking about patenting, which is the process of getting a monopoly on whatever you can get a monopoly on -- whether or not you've actually invented anything at all. Furthermore, even if you believe in invention, that has nothing to do with supporting patent reform that stops patent trolls like Intellectual Ventures. Patent trolls harm inventors, because they give a patent to whoever got their application through the patent office -- and that harms every other inventor who might be building something much better, and much more valuable to society, by putting a giant tollbooth in its way.

It's much, much better (and empirically more effective for the economy) to reward invention by letting inventors compete in the market. Let the market decide who builds the better product, and go from there.

Filed Under: adam mossoff, lobbying, nathan myhrvold, patent trolls, russ merbeth
Companies: intellectual ventures

Nathan Myhrvold: It's Ok To Kill Innovation If You're Also Killing Mosquitoes

from the that's-not-how-it-works dept

You may have seen the story last week about how Intellectual Ventures is trying to hire a "VP of Global Good" to take some of IV's ideas -- not a single one of which has ever been brought to market -- and see about bringing them to the developing world. Here's what this is about: every time people talk about Intellectual Ventures and the way it's put a massive, pointless and wasteful tax on innovation around the globe, IV and its founder Nathan Myhrvold point to their laser mosquito zapper. It's the go-to talking point. "We're zapping mosquitoes and stopping malaria." Except, of course, that the product is just a demo, not anything out in the market. So, the VP of "Global Good" is to try to actually get the product out there and used. Of course, some of us are skeptical as to how effective it really would be, but we'll reserve judgment there.

That said, Jeff Roberts, over at GigaOm, properly called out Intellectual Ventures for its hypocrisy in calling for "Global Good" when the company's entire business is focused on screwing over innovators by charging them an often substantial tax by bundling together tens of thousands of broad patents. Roberts notes that anyone taking the job is signing up for a "Faustian bargain."

The future “VP of Global Good” will be hard-pressed then to carry out enough good works to offset the colossal harm of his or her employer. Unless, of course, they choose to close the company and reform the patent system.

The ever-thin-skinned Myhrvold took exception to that and mocked GigaOm -- a company that actually produces something, unlike Myhrvold's company -- because Malaria!

I think we do a whole lot more good for the world than GigaOm does. How big is their malaria research project? How much effort do they put into polio? I’m quite curious! What on Earth have they done that is —

You know, I was at a conference recently where someone said, “Well, do you feel good about what you’re doing?” I turned to this person who is an entrepreneur at a prominent social networking website, and I said, “OK, fine. You’re about people sending little messages to each other and having fun on a social network. How big is your malaria project?”

It turns out it’s very easy if you have a technology-centric mindset to think, Ah yes, Zynga, they’re doing — I don’t mean to call Zynga out in a negative way, but is Zynga doing God’s work? Is Facebook doing God’s work? Even setting aside what God’s work means, I think it’s pretty easy to say, those companies are doing wonderful things, but they are for-profit ventures. It’s either tools or toys for the rich. There really is a role in taking great technological ideas and trying to harness them for the poorest people on Earth.

This is disingenuous to the point of being sickening. IV is very much a "for-profit venture" as well. In fact, if the leaks from the incredibly secretive company, concerning how much they charge companies are accurate, it's a massively profitable venture. And, if we're talking about "tools or toys for the rich," there's no better example of who Myhrvold is describing... than Myhrvold himself. Remember this is the guy who is selling a $600 cookbook about how to use modern technology to prepare your food.

But this claim -- that if you're not doing anything about malaria, you can't comment on how harmful Intellectual Ventures is for innovation, the economy and for society -- is ridiculous. Roberts, thankfully, hits back hard in a piece entitled, Malaria is no excuse for patent trolling, Mr. Myhrvold. Here's a snippet:

Well, the sentiment is certainly a noble one. The problem, though, is that Myhrvold is utterly unfit to espouse it. As we’ve stated before, no amount of philanthropy can undo the incredible ruin his company has unleashed on innovation through unfettered patent trolling. Lest you doubt, consider the following:

New research shows that Intellectual Ventures is tied to at least 1,300 shell companies whose sole purpose is to coerce real companies into buying patent license that they don’t want or need. Those who resist the “patent trolls” are dragged into nightmarish lawsuits.

Think what this means in practice. It means thousands of entrepreneurs must divert revenue from development and technology to pay Mr. Myhrvold’s licensing tax or else brace for millions in legal fees. Worse, Intellectual Ventures is targeting some of the most promising young start-ups in the country like hand-craft site Etsy. Now, instead of hiring workers and bolstering the economy, Etsy and others must put aside money to pay for Mr. Myhrvold instead.

And, of course, for all the talk of stopping malaria, the bug zapping demo is just that. It's a demo. He hasn't done anything to stop malaria either. He's produced a fancy demo that the slobbering press loves, so that he can pretend to be doing good for the world, while being the single largest force against innovation in our economy today. The companies Myhrvold is shaking down and suing are producing real products in the real world, not just demanding people pay them or get sued.

Myhrvold is proving himself not to just be a completely obnoxious patent troll with his efforts, but now one who hides behind ridiculous moral relativism to hit back at critics with very real gripes. It's sickening.

Filed Under: jeff roberts, malaria, mosquitoes, nathan myhrvold, patent trolling, patents
Companies: gigaom, intellectual ventures

Intellectual Ventures Loses Its Shine: Will Its Business Model Ever Work?

from the sad-troll dept

Techdirt has always been sceptical about Nathan Myhrvold's business plan for Intellectual Ventures (IV) -- build up a huge portfolio of patents, simply so that it can then license them to those that will, and sue those that won't. Others, however, have been dazzled by Myhrvold's pedigree as an extremely wealthy ex-Microsoft manager, and by the fact that patents have undeniably become a central concern for the tech industries in recent years, which suggests that there is plenty of money to be made from them.

But there are signs that the IV magic is fading. Here, for example, is a report of Myhrvold's appearance at D: All Things Digital this year, under the headline "Nathan Myhrvold on Being the Most Unpopular Guy at D10":

Myhrvold made the case to the crowd, though probably unsuccessfully, that his company serves a purpose similar to that of venture capital or private equity in the process of aiding innovation.

Myhrvold also quoted his own past statement at an earlier D conference, saying, "If people don’t find what you are doing threatening, then it is probably not very important."

More recently, the attacks have been less personal, but in some ways more damaging:

Around 2008 Nathan Myhrvold, Microsoft’s former chief technology officer, raised $2.9 billion in two separate funds to invest in patents and inventions. More than four years later, those funds have returned very little cash back to their investors and the returns look lousier than ever.

The article in Forbes quoted above goes on to describe one of Intellectual Venture's more recent patent-buying funds as "a complete disaster." It also notes IV's reply to these criticisms:

the firm points out the answer is that the life cycle of the firm’s funds is longer than the ten-year period usually associated with private equity-type investments. The funds are linked to the 20-year lives of the patents the funds acquire or develop.

But there's a larger issue than what the real internal rate of return is, and that's the underlying viability of Myhrvold's model. There is no evidence that IV encourages innovation in any way, despite the company's claims that it "creates a market place" for patents.

Instead, it really seems no different from your common-or-garden troll, hoping to hit the jackpot by picking up a patent that a successful company later finds it simply must license or risk going out of business. Leaving aside the morality of such an approach, it's inherently risky: IV has to hope that enough other companies come up with the actual valuable innovations that its patents can then parasitize.

The comments above could be the first straws in the wind that business opinion is starting to turn against Myhrvold. It will be interesting to see if IV starts suing companies more aggressively in an attempt to get the money rolling in -- and what it does if that fails to deliver the kind of returns investors are presumably hoping for. That could well happen if those being sued sense that IV is under pressure, and decide as a result to opt for a long, hard -- and expensive -- fight in the courts to exploit that fact.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Filed Under: all things digital, licensing, nathan myhrvold, patent troll
Companies: intellectual ventures

Nathan Myhrvold's Delusions: Patent Wars 'Vindicate' The Importance Of Patents

from the economically-clueless dept

Nathan Myhrvold, the founder of the world's largest patent troll, Intellectual Ventures, has been known to make ridiculous statements concerning patents in the past, but he's at it again. He's now claiming that the concerns and complaints about how patents hinder innovation are really just a vindication of his efforts. He was asked a question about all the criticism, including This American Life's brilliant expose on just how ridiculous patents are today -- which focused quite a bit on how Intellectual Ventures appears to be little more than a massively funded shakedown scheme -- and he responded by insisting that these criticisms were actually a good sign:

Not only do you have to be willing to fail, you have to be willing for people to ridicule you and call you names. And most great endeavors have exactly that.... When you change the status quo, people get upset, and there are very powerful vested interests that feel threatened by the idea of people who will just go an invent a lot of new stuff, and ask you to pay for it. Here’s the interesting thing: When we started Intellectual Ventures, it was even more true that there was all of this, and big technology companies were publicly saying, patents are terrible... If you look today, some of the most active litigants are big tech companies. Apple is out there very actively trying to protect the iPhone.... Intellectual property is actually more important to big companies every day, and I think that actually is vindication.

Let's unpack that a bit. Intellectual Ventures isn't "changing the status quo." It's doing the opposite, it's taking the "status quo" -- a completely broken law that gets lawyers and investors rich but massively hinders actual innovation -- and scaling it up to massively harmful proportions. Intellectual Ventures has done nothing to help drive innovation forward. It has only taken money out of the innovation economy. No one is threatened by inventors inventing new stuff. They're threatened by companies wielding a virtual nuclear weapon allowing them to demand money for doing the obvious. Patents that are broadly worded, having little to do with actual inventions, are wielded against the companies that actually innovate.

The fact that big companies are involved in patent battles doesn't vindicate Myhrvold. They've always been involved in patent battles. The only reason patents are important in the tech industry is because everyone else has them and you need them to avoid a bogus lawsuit from a competitor. Or, as Joel Grus insightfully paraphrased in the comments to the Geekwire article linked above:

"All those big companies that said patents were terrible? Now they’re trying to destroy each other with patents. Which somehow demonstrates that patents aren’t terrible!"

Using patents in lawsuits and patents being "useful" are two totally different things. Myhrvold must understand this. Either he doesn't care because scamming the system is making him filthy rich, or he's completely out of touch with how patents impact the tech industry.

Filed Under: nathan myhrvold, patent troll, shakedown
Companies: intellectual ventures

When Patents Attack: How Patents Are Destroying Innovation In Silicon Valley

from the can-we-be-done-with-this? dept

This week's episode of This American Life is absolutely worth listening to. The TAL team has been doing more and more amazing investigative reporting work in the past year or so, and this week's episode is called, "When Patents Attack!" which was apparently a last minute change from the much more bland and misleading "Invention Peddlers." The episode was done by Planet Money's Alex Blumberg and NPR's Laura Sydell and there's a written version of the story on the Planet Money blog, which covers most, but not all, of what's on the audio version (and, yes, it's nice that the story refers to Techdirt as an "influential blog," though it looks like they may have only done that in order to have someone they could "quote" calling Intellectual Ventures a "patent troll").

The episode does a nice job showing how much Silicon Valley hates patents -- and highlights how it's got nothing to do with people wanting to "steal" ideas, as patent system defenders will claim, but because ridiculous, broad, meaningless patents get approved all the time. The story quotes patent holders themselves who say they have no clue what their own patents mean and that they're "embarrassed" to have their name on such things.

Most of the story is focused on Intellectual Ventures, of course. And it does a wonderful job basically debunking all of IV's usual talking points (though, honestly, they could have gone farther on a few of the debunkings). IV does its usual song and dance. As it does any time a reporter wants to write about it, IV shows off its "lab," which is where lesser reporters start to swoon. The TAL team quickly points out that absolutely nothing from the lab has ever come to market. Instead, it points out that IV seems to make all of its money from shaking down companies. IV tries to push back and uses the story of "Chris Crawford" as proof that IV is really about supporting inventors.

So, the TAL team digs into the story of Chris Crawford and his patent. And it basically disproves everything that IV claims, and shows, yet again, that IV is nothing but a giant patent troll shaking down companies for cash. First, they look at the patent in question, 5,771,354, for an "Internet online backup system provides remote storage for customers using IDS & passwords which were interactively established when signing up for backup services." Yeah. Online storage. Patented. But not just by Mr. Crawford. TAL talks to David Martin, who analyzed Crawford's patent, and notes that there were over 5,000 patents that were issued for the exact same thing. Not slightly different. The same thing. This is a massive failure of the patent system and the USPTO (which doesn't appear in the story, which is fine, because they would have just given the usual meaningless statements). Another person looked at Crawford's patent, and points to a ton of prior art.

And this is IV's go-to patent in proving it supports innovation.

The piece discussed trying to track down Crawford and the patent. Crawford cannot be found, but it doesn't matter, because he's got nothing to do with the patent. He sold it to one of Intellectual Ventures' 1,300+ shell companies, who transferred it to another shell company, who transferred it to another shell company (still owned by IV), who then "sold" it to "Oasis Research." Oasis Research, like many patent trolls, is a shell company for its owners, who are hidden away. There's simply no way to officially know who owns Oasis Research. And that's because the entire point of Oasis Research is to act as a shell and a shield for its real owners (almost certainly a few patent attorneys). TAL goes to the fake, totally empty, "offices" of Oasis Research, in Marshall Texas. They're in a building with a bunch of other such "companies." They all have empty offices with no employees and certainly aren't doing a damn thing for innovation. They have offices so they can sue in every patent troll's favorite court system: the one in East Texas.

Of course, it turns out that Intellectual Ventures still has an economic interest in the patent -- which is pretty typical. For years, IV wouldn't sue directly, but instead handed off its patents to these kinds of shell companies (the ones it used to claim its mission was to eradicate) and then collect a cut of any of the money made.

One of the more amusing (though, depressing) scenes in the episode (which isn't in the written version) is when the TAL team starts asking some very basic (you would think) questions about the lineage of ownership in Crawford's patent. They talk to Peter Detkin, the former Intel patent attorney who coined the term "patent troll" in talking about Ray Niro (not mentioned in the episode)... but who went over to the dark side in a big, bad way by co-founding Intellectual Ventures. Detkin appears to suffer from a massive bout of cognitive dissonance in trying to pretend that IV is not doing the exact same thing that he claims he hates. The TAL team shows him the USPTO's standard page showing the changing patent assignments, and Detkin basically starts to stutter that he's "unfamiliar" with this particular thing. He literally states:

Detkin: I won't be able to tell you, probably, from looking at this. I mean I'd have to talk to... I'm not even an expert in... You're looking at the USPTO website? I haven't looked at this particular website in a while. I don't know how it's organized....

Alex Blumberg, from TAL: Wait... are you telling me that you're the... (long pause)... you run a patent company and you were the head counsel at Intel in the patent department, and you don't know what the Patent Office website is... you don't know how to read this...?

Detkin: (Frustrated) Look, I can look at this if you want, but I haven't looked at this particular website and I don't now how it's organized, and I'm not exactly sure what it is you're trying to get at... and I'm happy to answer questions, but if you're going to cross-examine me on the record about a patent website, I don't quite think that's fair...

Soon after that you hear IV's PR person jump in and try to stop the interview. Yeah. Detkin claiming he can't understand the USPTO website is just classic.

Anyway, the whole thing is worth a listen. I'm hopeful, but doubtful, that something useful might come of this. When the Planet Money team recently exposed the massive government waste in the form of the dollar coin minting laws, it actually resulted in a bunch of politicians springing into action. I doubt that will happen here, because we just went through about seven years of battles concerning patent reform, and what came out of it was watered down nothingness. Of note: Intellectual Ventures fought hard (and potentially dirty) against patent reform... until it suddenly switched camps, once the reform was watered down so much as to be useless.

The key takeaway, though, is just how incredibly damaging the entire patent system is to actual innovation today, and how pretty much everyone in Silicon Valley recognizes it -- but many are afraid to speak out about it, because they fear getting targeted by flat out bullies like Intellectual Ventures. Our government keeps talking up the importance of innovation and job creation... and then leaves us saddled us with a patent system that does everything possible to hinder innovation and destroy companies. I'm glad that mainstream outlets like This American Life are covering the story. I just wish I were more optimistic that it would actually result in some kind of change.

Filed Under: innovation, nathan myhrvold, patents, shell companies
Companies: intellectual ventures, oasis research

Patent Troll Nathan Myhrvold Declares Patent Trolling To Be A Good Thing

from the i'm-here-to-justify-my-existence dept

In what is a hugely unsurprising move, Nathan Myhrvold of Intellectual Ventures has written a column touting the pros of the patent system as a way to keep tech companies "honest." And why shouldn't he? After all, Intellectual Ventures does nearly all of its business via settlement letters or courtroom appearances.

So, while Myhrvold's intentions are pure (as in, self-interestedly portraying patents as an "attempt to level the playing field"), his piece is a catastrophe of revisionist history and patent-troll whitewashing from word one:

Patents rarely make headlines, but they did this month when Nortel auctioned off its patent portfolio and drew an astonishing winning bid of $4.5 billion from a group of companies that includes both Apple and Microsoft.

Really? "Rarely make headlines?" I'm not sure what sort of rock (or cavern) Myhrvold has been living under/in, but recently patents have been making headlines left and right. Of course, they're usually the kind of headlines that Myhrvold would hate to publicly extol, what with the general gist of the stories being that non-practicing entities are very busy attempting to extract payments from actual innovators. (See also: Lodsys, Kootol, etc.)

From that point on, it goes from bad to worse to ridiculous to hilarious. First off, Myhrvold praises the Nortel auction as "a watershed in the maturity of intellectual property markets." He's right as far as a strict definition of "watershed" goes, but most appearances of this word are linked with positive steps forward, rather than an indication of the moment where things took a turn for the worse.

He takes a little time to offer up some backhanded praise for the innovators that often find themselves staring down the barrel of the troll-gun:

Most big tech companies inhabit winner-take-most markets, in which any company that gets out in front can develop an enormous lead... As a result, the tech world has seen a series of mad scrambles by companies wanting to be king of the hill. In the late 1980s, the battle was for dominance of spreadsheet and word-processing software. In the late 1990s, it was about e- commerce on the emerging Internet. The latest whatever-it-takes struggle has been over social networks, with enough drama to script a Hollywood movie.

In each case, the recipe for success was to bring to market, at a furious pace, products that incorporate new features. Along the way, inconvenient intellectual property rights were ignored.

In his haste to paint these innovators as the beneficiaries of the intellectual property of others, Myhrvold inadvertently throws himself (and other non-practicing entities) under the bus, as Glyn Moody points out:

I think he's absolutely spot on. In the 1980s and 1990s, companies successively carved out dominant shares in emerging markets, often becoming vastly profitable in the process. And how did they do that? Well, as Myhrvold says, "the recipe for success was to bring to market, at a furious pace, products that incorporate new features." Their rise and huge success was almost entirely down to the fact that they innovated at a "furious pace", which led to market success.

They did not, that is, innovate in order to gain patents, but in order to succeed. They did not even bother taking out patents, so busy were they innovating and succeeding. Indeed, Myhrvold himself says: "Along the way, inconvenient intellectual property rights were ignored." They were ignored by everyone, and the most innovative companies thrived as a direct result, because only innovation mattered.

But Nathan's not done being wrong yet. He also spends a little time bashing the innovators for their treatment of intellectual property, while inexplicably dragging copyright into the argument for all of two sentences:

Yes, copyright was almost religiously enforced. Copyrights are trivial to obtain (just type the "c" in a circle symbol), and software companies see them as essential to restraining piracy, which hurts revenue. Patents are a different story, however. It takes time for engineers to apply for patents and even more time if they diligently respect other people's patents. So technology companies typically did neither.

In fact, many tech companies forbid their engineers from checking whether their products incorporate others' patents. The practice amounts to an intellectual property version of "don't ask, don't tell." As tech giants commercialized ideas that had been pioneered by small companies and merged once-separate technologies into new products, they infringed other people's patents.

Yes, a copyright is easily obtained. (However, that "little c in a circle" hasn't been required for over three decades -- keep up, Nathan.) But for Myhrvold to pretend that enforcing it is somehow trivial compared to the patent "protection" process is completely ignorant. (And we'll just let the "piracy hurts revenue" line drift on by. Myhrvold is only using it as a bridge to what he really wants to talk about, rather than actually expressing concern for software companies.) Patent trolls, much like copyright trolls, exist only because the system has made it very easy for them to file massive lawsuits (often in friendly locations) and turn a settlement letter mass-mailing campaign into a viable business plan.

Not only that, but to insinuate that these patents (supposedly "pioneered by small companies") are being ignored by large tech companies is completely disingenuous. If there's a lack of due diligence on the part of tech companies, it's because the approved patents that tangle up tech innovators are rarely actual innovations. They often tend to be fairly obvious machinations that should never have been approved in the first place.

There's more:

The biggest companies, which have always touted their brilliant innovations to justify the billions of dollars in stock options they pay their executives, have been in the odd position of attacking the patent system and publicly deprecating the innovations of others. Patents attempt to create a level playing field, but the last thing an 800-pound gorilla of a company wants is a fair fight. After succeeding in part by stealing other people's inventions, they decry any inventors who have the temerity to ask for a share of the returns.

Myhrvold, you flatter yourself. Non-practicing entities aren't "inventors". They're like speed traps in the middle of a 20-degree downgrade. They don't make anything better and, quite often, make things incredibly worse.

And for all his concerns about "innovators" getting paid, there's little attention paid to the fact that all this patent activity (most of it taking place via lawsuits) does nothing to stimulate innovation. In fact, what has happened is that former innovators like Microsoft and Apple now seem to be equally as happy dispatching lawyers from place to place and eliminating competitors through legal attrition rather than through product innovation.

Apple, flush with the iPhone's success but understandably worried that it might wind up becoming the R&D outfit that prototyped ideas that made others rich, has recently sued HTC Corp., Samsung and others. Just last week, the company won a preliminary ruling from the International Trade Commission, which if upheld will prevent HTC from importing smart phones into the U.S., essentially wiping out its business here.

Wiping out a competitor through a lawsuit is "innovation?" How does that stimulate any sort of progress? What about all the "small companies" (like app developers) that saw the level playing field get yanked out from beneath them by Lodsys and Kootol? Who's protecting them?

And now that all this "watershedding" is done in regard to the Nortel patents, where do we, as the customers of these "tech giants" stand? Have things improved?

The result effectively retains the status quo. Google still has no strategic weapon to compensate for the patent liability inherent in Android, so the lawsuits will continue.

Wonderful. Status is still quo and "lawsuits will continue." I'm not sure how much more good news I can handle. Do go on:

More importantly, this sale validates the notion that patents will be a fundamental tool in the tech industry. They had been moving toward that position for years, but the magnitude of Nortel's sale shows that they have arrived.

Patents have been a tool for tech industries for years, Nathan. It's only recently that patent trolling has been a tool for tech industries, which is very disappointing.

Myhrvold has one final thought before he signs off:

What's next? The history of mergers and acquisitions suggests one possibility. Once upon a time in the clubby atmosphere of corporate America, hostile takeovers were rare; gentlemen just didn't do such things. Then, in the 1960s, the hostile takeovers came to be accepted as a legitimate business tool. Similarly, the strategic use of patents now appears to be accepted in the technology industry. If that's true, then Nortel is just the beginning.

And that's the sad truth. Formerly unacceptable business practices should never be welcomed this warmly. If the best business analogy you have for patent trolling is hostile takeovers, then your "business" is already the lowest common denominator. "Strategic use." What a laugh. What you're positing resembles a chess game where nearly every piece is a pawn and no one's allowed to move until the king ok's it.

Filed Under: innovation, nathan myhrvold, patents
Companies: intellectual ventures

DailyDirt: Ancient Food & Modern Food

from the urls-we-dig-up dept

Food has changed a lot over the last few decades. There's a lot more stuff like high fructose corn syrup in the food we eat, and formerly obscure techniques like sous-vide cooking are becoming more well-known. Here are a few quick links on some modern foods.

• A recent study suggests that Neanderthals gathered plants and cooked their food -- making their diet more similar to ours than previously thought. Unless you're comparing microwaved frozen dinners to Neanderthal meals... [url]
• A "Molecular Cuisine Starter Kit" sells for about $70 and includes ingredients such as calcium lactate, sodium alginate, soy lecithin and xanthan gum. And remember not to eat the little packets of silica gel in the packing material. [url]
• Here are two great tastes that taste great together: beer and marshmallows. Chocolate and peanut butter will always be the classic combination. [url]
• The first printing of Nathan Myhrvold's $625 cookbook has sold out -- so 25,000 more sets are being printed. When will the lawsuits over "stolen recipes" start? [url]
• To discover more food-related links, check out what's floating around in StumbleUpon. [url]  

By the way, StumbleUpon can also recommend some good Techdirt articles, too.

Filed Under: cookbook, food, modern cuisine, nathan myhrvold, neanderthals