Intellectual Ventures of Bellevue, Washington, has been accused of being a patent troll, before. Now Planet Money and NPR’s This American Life provide an in-depth look at the enterprise, formed by Nathan Myhrvold, boy genius.
Myhrvold worked at Microsoft for 13 years, where he founded Microsoft Research in 1991. Intellectual Ventures, it is alleged, accumulates patents not in order to develop products and reward inventors, but with the goal acquiring licensing fees, often using shell companies.
Technology companies pay Intellectual Ventures fees ranging “from tens of thousands to the millions and millions of dollars … to buy themselves insurance that protects them from being sued by any harmful, malevolent outsiders,” says venture capitalist Chris Sacca.
There’s an implication in IV’s pitch, Sacca says: If you don’t join us, who knows what’ll happen? He says it reminds him of “a mafia-style shakedown, where someone comes in the front door of your building and says, ‘It would be a shame if this place burnt down. I know the neighborhood really well and I can make sure that doesn’t happen.’ “
A group including Apple, Research In Motion, Microsoft, Ericsson and Sony paid $4.5 billion this month to snatch Nortel Networks’ patents from under the noses of Google and Intel. The winning bid was five times larger than the initial “stalking horse” offer of $900 million made in April by Google. The winning consortium members are expected to share the patents to maximize their scope to pursue patent litigation.
Myhrvold can whip up a mean hamburger, but Intellectual Ventures has produced few results and lots of questions for its investors, says Forbes.