Microsoft alums amass thousands of patents

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Microsoft, Intel and others, according to sources, and those investors have licenses to all of Intellectual Ventures' intellectual property.

Intel has agreed in the past two years to pay a total of $975 million to two companies--Intergraph and MicroUnity--to settle patent claims. Intel is also defending itself against patent claims filed by firms that have only a handful of employees.

Similarly, Microsoft has been hit with large patent infringement verdicts. The Redmond, Wash.-based software giant has also begun to increase its patent portfolio, in part to offset royalty payments to others.

Buy versus build
Intellectual Ventures is, in fact, coming up with its own inventions and patents. The company has filed hundreds of patent applications, according to a spokesperson. So far, the U.S. Patent and Trademark office has published 22 of these applications. (Publication is the first stage that outsiders can examine to see what the application involves.) Soon, Intellectual Ventures expects to get its first patent granted.

Its original patent applications are far fewer than those acquired, in part because getting a patent can take 18 months or longer and cost thousands in legal fees. Acquiring patents, by contrast, is somewhat easier. The dot-com collapse prompted several companies to sell their intellectual property.

Companies also often abandon patents, discovering that their hard-won invention has little apparent market value. A U.S. patent grants a monopoly over the idea embodied in the patent for 20 years from the date the patent was filed. But more than half of all patents granted are abandoned by the 11th year by owners unwilling to pay renewal fees, according to statistics from the U.S. Patent and Trademark Office.

"There's a lot of IP floating around out there without a home," Paul Ryan, CEO of Acacia, said earlier this year.

Like other firms, Intellectual Ventures itself doesn't technically buy the patents. It sets up a shell organization for each group of patents it buys, and then controls the shells. Two of its shells are CORPS of Discovery and Ben Franklin Patent Holding, which in January acquired a patent from four California inventors for better managing their contacts.

The only officer listed for those two Delaware limited liability shell companies is Zeon Corp., another Delaware shell.

While shell corporations give IP firms a whiff of skullduggery, it's generally not considered insidious. IP firms and established companies do it all the time.

"When Nathan (Myhrvold) or Peter (Detkin) come knocking, you're going to know who they are," said Jerry Klein of the Chatham Group, which provides patent consulting to law firms.

Legislators in Washington and the European Union are touting reforms to balance the rights of patent holders and potential defendants. Striking that balance, however, is proving difficult, said Klein.

"The industry is trying to figure out how to manage intellectual property," said Klein. "The system isn't perfect by any means, but it's the best in the world."

[JoeCrow]

Plague

Software patents are a plague on the industry. It's only a matter of time before the system implodes under the weight of all the lawsuits. Patents might be fine for other industries but serve no purpose besides lining the pockets of lawyers in the software world. They are only slowing down the innovation in the U.S. and those coutries foolish enough to follow us. This company is an example of everything that is wrong with the system.

Software patents only good for blackmail

The saddest part of this is that for 95% of companies which are being demanded royalties from it is cheaper to pay up the demanded fee and be done with it than take the matter to the courts and have the patent found invalid or your software found non-infringeing. The complex nature of software and the fuzzy language of many patent applications make it both extremely expensive to fight this stuff in court and extremely hard to be sure of the outcome. When will this madness end.

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Software patents are anti innovation

The US patent office and patent process are completely broken down now.
US patent office is issuing patents not because you have created something, but just because you have best (most paid) lawyers. This is true: you can in fact get a patent on an idea, not an invention. It is like Edison getting patent on the idea behind light bulb, without actually making and selling it. Anyone who has invented something real knows that ideas are "dime a dozen, what matters is to manufacture those ideas into reality.

Thanks God for European Union which has at least for now resisted to give value to the Hoax patents that are issued by the US patent office.