The Open Road

Dave Rosenberg and I recorded Episode 3 of Open Sources. Zack Urlocker was on the call, but couldn't get the microphone on his headset working, so let's just say you never hear him on the podcast.

That doesn't stop us, however, from talking about Sun and, most interestingly, Intellectual Ventures. Dave provides some real insight into how it operates, and the positive things that can come from an all-consuming patent troll. Well worth a listen for that reason alone.

We also smack around those in the open-source community that contribute bile, not code, and argue that support-based business models simply aren't enough.

Correction: The article inadvertently states that RPX has raised $40 million in venture capital funds. This is incorrect. A spokesperson contacted the author to note that a correct reading of the website would be that "The company has acquired more than $40 million in patent rights since its founding."

Patent trolls are the bane of existence for technology companies. Patent trolls buy up patents so that they can extort money from companies that actually build and sell products. The world's largest patent troll is arguably Intellectual Ventures, which holds billions of dollars worth of patents.

It is therefore surprising to hear that the former general manager of Strategic Acquisitions and vice president of Licensing at Intellectual Ventures, John Amster, along with former vice president of Licensing at Intellectual Ventures, Geoffrey Barker, have banded together to create RPX, a "defensive patent aggregator. Is Intellectual Ventures spawning its own defense mechanisms?

This sounds a bit like the radar gun/detector industry, wherein the same manufacturers that help police nab speeding motorists also build the radar detectors to help avoid getting caught. Can RPX be trusted?

Probably. This is no ordinary patent aggregator. For one thing, as The Wall Street Journal reports, RPX is funded by venture firms Kleiner Perkins and Charles River Ventures: it has to turn a profit. The company raised $40 million, according to its website, and has already acquired more than 150 U.S. patents and has filed more than 60 U.S. applications. Other patent aggregators like Linux's Open Invention Network operate as non-profits, with all the benefits (and downsides) that come with that status.

Cisco and IBM have joined as early members of RPX, and the Journal reports rumors that Hewlett-Packard, Verizon, and Google have also joined.

But the big question may well be how RPX deals with Intellectual Ventures, which is much bigger and much more complex than a typical patent troll. Intellectual Ventures uses patents as an offensive strategy, while RPX uses patents as a defensive mechanism. I would assume the two will work together in some way, and indeed, I presume that the founders' credentials and ties to Intellectual Ventures must have been a primary selling point to the venture capitalists.

What this means in practice could well determine RPX's success as a defensive patent aggregator. Is RPX prepared to kill its father, Oedipus style? (We won't inquire into its mother.)

I read OStatic's review of a stripped-down, speedy version of OpenOffice on Tuesday - Go-oo - with considerable interest.

Go-oo is a fork of OpenOffice version 2.4, for Windows and Linux. It doesn't include some of the features found in OpenOffice 3.0 but it is much faster, and includes some compatibility features that can be handy to have around even if you primarily use the OpenOffice suite...[T]here are several ways to run both, which makes a lot of sense.

I was just about to download and try it out, as it sounds like a useful fork to OpenOffice, when I happened across comments like this below the post:

Maybe I'm off-base, but it looks to me like MS-infected OOo. It's coming from Novell (which I refuse to use), and is paid for by MS-license fees.

From this and other commentators, I gather that Go-oo is being positioned by some as a devious plot from Microsoft to undermine OpenOffice.org. (Cue wicked laughter.) It's not the first time that Novell and Microsoft have been cast as the villains in the OpenOffice debate, but it just seems a bit silly to me.

Of more concern was the TechFlash's news that Bill Gates, Craig Mundie, and other top current and past Microsoft officials make a regular pilgrimage to the patent troll, Intellectual Ventures, to feed it ideas which it turns into patents. Regardless of what one thinks about patents, shouldn't Microsoft be feeding itself with patents, not another company? In other words, shouldn't it be the patent troll?

The commentary on Slashdot is sharp and at times highly insightful. Could Microsoft be feeding Intellectual Ventures ideas that it, in turn, can bludgeon Microsoft's competitors with? It's a stretch, but perhaps not as much of one as would first appear. Intellectual Ventures can pick fights - perhaps with open source? - that are politically nettlesome for Microsoft.

I don't believe that Microsoft is the source of all evil in the software world. Even if it were, it could find more efficient ways to wreak havoc than through OpenOffice (which has its own issues) and Intellectual Ventures.

Techdirt goes into depth on ex-Microsoft executive Nathan Myhrvold's Intellectual Ventures, adding a slew of new reasons to consider the patent-hoarding company the ultimate in creepiness. Intellectual Ventures is out on the fund-raising trail (again - it just raised $1 billion in late 2007), despite the fact that it appears to have demonstrated little ability to generate cash for anyone other than Myhrvold, even despite his amassed 20,000 patents.

I'm not a fan of any patent troll, but the manner in which Intellectual Ventures spends and raises money takes the practice to new lows. Indeed, the Seattle Post-Intelligencer says it's not unreasonable to label Intellectual Ventures as a "giant pyramid scheme and a protection racket". Techdirt explains:

Another oddity is the vast amount of secrecy surrounding Intellectual Ventures. Anyone who sells a patent to the company or who licenses patents from the company are required to sign extensive non-disclosure agreements. When asked why, Myhrvold skirts the question by claiming many companies don't want to reveal what they're doing with IV. If that's true, though, why do they need NDAs in the first place? The company also uses an array of secret shell companies to go around buying patents, again raising questions about what it's doing. If the company is really so proud of its business model and doesn't think it's shameful, why is it hiding behind shell companies like garden variety patent hoarders. But, as we've learned, patent hoarders very much rely on secrecy to convince others to pay up.

Cisco and others have coughed up hundreds of millions of dollars to Intellectual Ventures, and have taken some steps to try to combat the company and its ilk. It's a nice gesture, but Myhrvold and his investors apparently bring too much cash to the table, earning Intellectual Ventures the dubious distinction of being the world's largest patent troll.

Myhrvold, of course, begs to differ, claiming that he's all about getting a fair return on innovation. Whatever. Most companies that innovate sell products. Intellectual Ventures sells the fear that one's home-grown products may earn a lawsuit.

Myhrvold? Well, according to the Wall Street Journal, his primary argument seems to be "everyone is doing it." I don't find this argument persuasive when my kids use it. I'd find it even less so if I discovered they were organizing protection rackets on the playground. It's shameful.

The Wall Street Journal is reporting that Google, Cisco, Hewlett-Packard, Ericsson, Verizon, and others are joining together to buy up patents to prevent the patents being used against them by patent trolls. The group, called the Allied Security Trust, is a bit like the open-source friendly Open Invention Network, but appears to have more cash at its disposal.

The new Allied Security Trust aims to buy patents that others might use to bring infringement claims against its members. Companies will pay roughly $250,000 to join the group and will each put about $5 million into escrow with the organization, to go toward future patent purchases, the people familiar with the initiative said....[C]ompanies in the new group will sell the patents they acquire after they have granted themselves a nonexclusive license to the underlying technology.

Allied Security Trust isn't intended to be a revenue generator for the companies involved, but rather a protective shield against patent trolls big (Intellectual Ventures, which was recently torched in The New Yorker) and small (Acacia).

Will it succeed? Who knows? But any efforts intended to bring some sanity to the patent-litigation racket are very welcome.

In two consecutive days, The Wall Street Journal presented two different answers. The first is not surprising: Intellectual Ventures, the brainchild of ex-Microsoft executive Nathan Myhrvold. It's now out "to raise as much as $1 billion to help develop and patent inventions, many of them from universities in Asia." I know I will sleep so much more comfortably knowing that IVL will be out plundering Asia so that it can turn around and plunder the rest of the planet.

The second might surprise you: the University of California. The University of California may be especially pernicious because it can sue for patent infringement but has sovereign immunity: