We doctor your patents, so be patent!

We've been watching Intellectual Ventures for some time, what with Broadsight's Paul Lancefield being an expert on patent search systems, never mind the critical position patents having in driving technology value and viability of our clients, and the "interesting" trends in the US patent world.

The WSJ today implies that Intellectual Ventures have crossed that fine line from patent aggregator to patent troll (via ZDNet):

Unlike most other pure licensing companies, Intellectual Ventures hasn’t filed patent-infringement lawsuits to help force settlements. But the group lobbying on behalf of tech companies in Washington, the Coalition for Patent Fairness — which includes several companies that have been approached for licensing deals by Intellectual Ventures — says it is only a matter of time. “Since these thousands of patents only give [Intellectual Ventures] the right to stop others from making products, through lawsuits, it is obvious what they intend to do,” the group said in a statement.

In an interview at his Bellevue, Wash., headquarters, Mr. Myhrvold acknowledged facing resistance from companies he targets for licenses. But his patent inventory gives him leverage to extract settlements without litigation. “I say, ‘I can’t afford to sue you on all of these, and you can’t afford to defend on all these,’” Mr. Myhrvold said.

As Paul noted, Patent Trolls, like Short Sellers, sometimes get a bad rap:

Many of the the so called "Patent Trolls" are in fact companies which, through a licensing arrangement, aggregate and protect patents owned by the likes of you and I and independent programmers. Defence costs are a fact of patent ownership, and these so called "Trolls" actually provide a legitimate and useful service much like the services which provide for the refactoring of debt for small businesses. What is more, the very presence of these companies demonstrates patent ownership is viable for the small-guy. Its more the large corporations interest to vilify them.

As with short sellers, large companies don't like plays that can shake them up and expose their inadequacies, and will spend large amounts to PR / lobby / legislate them away - and as any small player who has tried to enforce patent abuse by large companies knows, it's virtually impossible to win and ruinously expensive to fight. So in that respect, aggregation is a good thing. Its hard to tell from this article if its just part of the PR war or whether there has been a real step up in the shakedown. Time will tell.....(so be patent )

But there is also a rise in pure trolling, ie attempting to shake down perfectly legitimate companies via the threat of this expensive legislation, as patents seldom exist in a vacuum - geeks think of the same things at roughly the same time, old ideas easily can be poured into new bottles etc.

The desired endgame, one assumes, must be to tax the large and successful companies that are abusing others' patents, while at the same time allowing fledgling companies to get off the ground without strangling them with pending patent litigation. Innovation Ventures was initially featured in the book Open Business Models, where the argument was made that this was its key role, rather than just buying up patents on the cheap and then shaking down companies who had money. Lets hope that this continues, as a taxing innovation is the last thing the patent market should be doing - but clearly the rewards of a good old shakedown are hard to ignore.