Patent firm woos big-name inventors

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Until recently, Intellectual Ventures has been somewhat secretive about its roster of inventors. Last year, Myhrvold said that it was working with genetics pioneer Leroy Hood, but provided no other names at that time.

Under the company's structure, inventors gather for brainstorming sessions. Subsequently, lawyers and patent experts perform the white-collar grunt work involved in transforming the more promising ideas into patents and prototypes that can be licensed to manufacturers.

"Our goal is to try to invent things. We try to do things about five years out. The reason is that almost every engineer at every company is working zero to three years out. It might slip to three to five years, but the plan is zero to three years," Myhrvold said. "We're not going to try to make products, so in order to make money we have to convince someone else to make it."

Still a mystery
A substantial portion of the angst about the company seems to derive from the fact that Intellectual Ventures continues to remain a mystery in many respects. The company is filing about 300 patent applications a year, but so far has only been granted one patent. Typically, the company will not seek royalties until the patent is granted. Lawsuits have also not been filed. Some deals may be announced in a few months.

Lawyers and executives that were asked by CNET News.com to comment on the company have largely asserted that Intellectual Ventures would likely generate its revenue from the legal system, but also admitted they didn't have direct or exact insight into the business plan. (These sources have also requested anonymity.)

While patent suits aren't the goal, Myhrvold acknowledges that lawsuits are a chronic factor of life when it comes to the IT industry. Historically, IT companies have taken a damn-the-torpedoes approach toward patents, brushing off patent holders and requests for royalties.

As a result, licensing deals that might cost a company a few million dollars can lead to multimillion dollar verdicts. EBay, for instance, could have licensed patents for its "Buy it Now" feature from MercExchange for a few million dollars years ago, but decided to risk the lawsuits, said Myhrvold. A court eventually awarded MercExchange $25 million.

Many in the tech industry disagree with the court's decision and have filed briefs on behalf of eBay in the case. On the other hand, several pharmaceutical companies and chemical companies have sided with MercExchange.

Individuals asserting patent rights, he adds, aren't just lawyers looking for a quick payoff. Intellectual Ventures is one of the largest sources of royalties for the University of California. The pool of potential licensees for many patents is also small.

Myhrvold asserts that these complex patents are a hard sell. "We do a lot of solid-state physics patents. Even if you put a sweater on me, I don't think I am going to be able to sell them on QVC," he said.

[DraconumPB]

That's a relief

It's good to see a patent firm doing things like actually researching concepts... as opposed to coming with patents such as, "method of turning on a computer" and charging royalties for using the 'on' button.

[Pop4]

Some say life begins at 40yrs. and less working intel, property denotes $$

Moreover, technology education is an applied science with little regard; and lowells for advancement. Ever brilliant mind eventually finds their way and these were excecutors shed great value for the human elements.

Smackers or Skittles?