Thursday, June 14, 2012

Intellectual Ventures (or Vultures?)

Intellectual Ventures (IV) is a venture that mostly buys up an ever-growing collection of patents. It invites others to pay a membership fee and get “membership” of this collection for a heavy one-time fee, sometimes in hundreds of millions of dollars, which gives them:
  • the right to license or purchase any patent from its collection to use as defense in battles against its rivals
  • the right to not have the venture use its patents against the member
  • the right to get a share of membership fees paid by every future member. Thus, there is an automatic incentive to join early, as in any multi-level pyramid scheme.
Nowadays, it is observed that IV has taken to selling some patents from their huge collection. This means that if they want to start a battle, they make sure that they never fight in their own name. This fact is shrouded behind a byzantine maze of shell companies so that, invariably, the entity that fights is an unknown entity that has incidentally come to own the patents required to fight. This arrangement with the shell company is suspected to have a “back end” so that at least some of the benefits that may accrue from any battle using the patents sold by IV to the remote entity, flows back to IV.
Intellectual Ventures's modus operandi includes putting on a front where they offer the public through overawed or otherwise unskeptical press reporters, a glimpse of its huge collection of patents. They take reporters around its innovation laboratories where they spend millions to “encourage innovation”. IV keeps drilling home the message that they do not want to fight; indeed, they strive to avoid battles. They only help their membership fee paying members to use its collection of patents for offense in battles against their business rivals. Thus, this venture gives out patents on hire to its members who have insufficient or no patents in their own personal collection. They also put in a friendly word with their members' business rivals, when they think it might help, to help out their members. They do not like to talk about their members, but large corporations like Microsoft and Verizon are known to be early members of this collection. Their members also include tiny startups like Vlingo who need (and hence bought) patents from IV's collection to use to fight their business rivals. Verizon also is known to have bought some patents in its battle against TiVo.

Now there are some who have a completely different view of Intellectual Ventures. Their view can be easily be understood with a few words being replaced by words that differ slightly in meaning. They suggest the following search-and-replace commands be run on the paragraphs above:

Search for Replace with
membership protection
member protectee
patent weapon
license borrow
defense offense
membership fee protection money
collection arsenal
battles lawsuits
fight sue

Of course, there are still others who recommend another search-and-replace that is suggested in the title of this post. What do you think? Comments welcome.