The Delusions Of Nathan Myhrvold

from the misrepresenting-the-truth dept

Nathan Myhrvold may not have done much of note yet with Intellectual Ventures, but he sure is good at getting press attention. It seems to come in waves, too, with multiple stories popping up all around the same time. So, after last week's Malcolm Gladwell-penned story on Myrhvold that accidentally made the case for why Intellectual Ventures isn't needed, PC World is running an unintentionally hilarious interview with Myrhvold, where he says some of the most ridiculous things, and the interviewer doesn't call him on a single one. When asked whether or not there's a patent litigation "crisis" Myrhvold notes:

"If I compare the number of lawsuits to the number of patents that exist, it's down. If I compare it to the number of patent holders, it's down. Patent litigation has grown, but it's actually grown less fast than lots of other things have grown."

That's misleading in many different ways. He basically is trying to hide the massive growth in patent lawsuits (and monetary awards) by claiming that if you look at the ratio of lawsuits to patents, that's down. But that's misleading, because the sheer number of patents and patent applications has exploded due to some changes to patent laws, as well as court decisions that widely expanded the scope of patents. Add to that some ridiculous lawsuit outcomes, rewarding insane amounts of money for questionable patents, and the patent office gets overwhelmed with more applications. That the percentage of lawsuits to patents has gone down is fairly meaningless, when the absolute numbers are pretty clear.

"Lots of technology companies that are gigantic today weren't gigantic five or 10 years ago. They were little startups that grew like weeds. Or they were a company that acquired little startups. Many of these companies took whatever it took to become successful. Along the way, they probably copied lots of other people's ideas. And the reason they complain about patent litigation and claim that there's a problem is, they know they stole lots of stuff. And they're afraid someone's going to ask them for the money, and they'd prefer not to pay."

Notice that he doesn't provide a single example. Notice that he conflates "theft" with "infringement." Notice that he doesn't even consider the idea that there was likely independent invention. Notice that he doesn't admit that it was competition, not patents, that drove much of this innovation. Notice that he doesn't seem to mind the idea that someone who lost in the marketplace deserves money from those who won.

"It's very hard to come and say, "Look, I've become a billionaire personally, and my company has got a $100 million market capitalization, and we did this by copying lots of ideas from universities and small companies we never paid. But we'd like a free pass." So instead, you say, "Oh my God, there's this catastrophe, patent litigation is threatening to stop all innovation." What evidence is there of it? There's none."

And here Myhrvold is either outright lying or he's ignorant (he can let us know which one). First of all no one has ever said that patent litigation is threatening to stop all innovation. They've just said that it is slowing the pace of innovation. And there's plenty of evidence to support that, despite Myhrvold's claim that there's none. James Bessen and Michael Meurer just came out with a whole book detailing much of the evidence, and David Levine and Michele Boldrin also have a book with even more evidence. Did Myhrvold simply not know about these? Or is he lying to PC World?

Then he's asked about whether or not it's okay for someone to get a patent and then not do anything with it, to which he responds:

I would say, yes, there's nothing wrong with that. And the analogy I would use is, it'd be like saying, "Is it OK for someone to buy a chunk of the business and never show up there?" And the answer is, yes. We call them venture capitalists or shareholders. To have a system of taking risk and building valuable companies, you have to have people that are financiers or have other specialized roles.

That sounds nice, but that analogy doesn't work in the slightest. Patent hoarding isn't like an investor or a shareholder. It's about someone holding onto a patent and then popping up and suing when someone else does something. A shareholder or an investor is a win-win relationship based on a fair transaction. A company gets some money, and the shareholder gets some equity. Patent hoarding is quite different. It's about holding onto a patent and then using it to legally threaten someone else or prevent them from doing work and then demanding money out of them after the fact. To equate that with an investor is simply incorrect.

I'm sure Myhrvold is a smart guy -- and he may truly believe that he's helping inventors and changing the world -- but he's either being purposely misleading or he's ignorant when it comes to patents and how they interact with the economy.

Filed Under: nathan myhrvold, patent litigation, patents
Companies: intellectual ventures

Looking Back On Another Year Of Patent Insanity

from the by-the-numbers dept

The Patent Troll Tracker is doing what he does best (well, other than pissing off patent hoarders and their lawyers): tracking patent litigation. As we approach the end of the year, he's got a nice rundown on some numbers concerning patent litigation. For those who think that pointless and wasteful patent litigation is on the decline, think again. Even in just the last three months, the pace has been accelerating -- perhaps as patent hoarders rush to get cases in before any patent reform makes progress in Congress -- or before the Supreme Court (thankfully) quashes another abuse of the patent system. The Troll Tracker looks at the Fortune 100 to see who got sued the most for patent infringement, and found that the top 35 companies were sued a combined 500 times for patent infringement in the last two years alone. That's an awful lot of money wasted on lawyers that could be going towards actual innovation. Of the lawsuits over the past two years, approximately 50% came from companies who didn't actually make any products themselves. However, in the last 3 months, that number shoots up to 70% from companies that don't make products. And if you limit the list to tech companies, 80% of the lawsuits came from companies that don't make products. Shouldn't this be ringing some alarm bells?

Filed Under: patent litigation, patent tracker, patent trolls, patents