
Intellectual Ventures cuts 140 employees from its patent-buying workforce - aaronbrethorst
http://www.geekwire.com/2014/nathan-myhrvolds-intellectual-ventures-cuts-fifth-patent-buying-workforce/
======
TheMagicHorsey
IV is a garbage company trying to portray itself as a bastion of innovation.

There are certain severe "bugs" in the way our intellectual property laws work
in the US. IV exploits these bugs to make Billions of dollars.

IV is not concerned with whether something is good or not. They exist to make
hay while the intellectual property laws remain broken.

I had no idea they had 500 people working for them. That means that there are
at least 500 people that are severely deluded, or morally repugnant.

If you are an engineer or a lawyer familiar with the patent laws in this
country, you can't read the claims asserted by IV and say that they are
boosting "innovation" with a straight face. What they do is a dead weight loss
on our economy.

I feel sorry for the people that work at IV. They have whored themselves out
for a little bit more money, instead of just working productively in this
economy.

I don't know how you can show your face in front of your kids and family
knowing you go to work every day in an extortion racket.

I would rather make a modest living and look at myself in the mirror with no
shame.

~~~
programmarchy
I think dogpiling Intellectual Ventures is striking at the branches, and not
at the root. The problem isn’t “patent trolls.” The problem is patents:

> Even if patents actually accomplished their advertised purpose — “securing
> for limited Times to … Inventors the exclusive Right to their …
> Discoveries,” as the US Constitution puts it — they’d be a very bad idea.
> The claim that one can own an idea is silly on its face, and not a claim
> that anyone would pay the slightest mind to were it not enforced at gunpoint
> by the state.

> But the advertised purpose of patents is not their actual purpose.

> Their actual purpose is to restrain competition and limit innovation so as
> to provide economic advantage — monopoly pricing power, in fact — to
> established firms who, by virtue of their ability to pay off (pardon my
> indelicate language; I believe the word I’m looking for is “lobby”)
> politicians, bureaucrats and judges, can thereby indulge their desire avoid
> market competition on price or quality. [1]

[1] [http://c4ss.org/content/24371](http://c4ss.org/content/24371)

~~~
zak_mc_kracken
> The problem is patents:

No, patents are fine. The problem is that current patent laws enable patent
trolls. If we could find a way to eradicate patent trolls while preserving
patents, their intent would be served much better.

For example, you should only be able to acquire patents if you can prove you
have a business pertinent to those patents. This kind of measure would
instantly kill all patent trolls.

~~~
chongli
_This kind of measure would instantly kill all patent trolls._

And anyone else who files for a patent but is unable to bring their idea to
market in the form of a product or service. This includes (but is not limited
to) private inventors, universities, research institutions and even large
companies such as ARM Holdings plc.

~~~
bjt
Couldn't agree more. The focus on non-practicing entities is misplaced.
There's no reason we shouldn't incentivize inventors who come up with great
ideas so they can sell them to others who have the skills to bring them to
market.

I think the more appropriate distinctions between good patents and bad are in
the subject matter of the claims themselves (e.g. the novelty and non-
obviousness requirements). Thankfully, the Supreme Court is tightening this up
lately.

~~~
chongli
_Thankfully, the Supreme Court is tightening this up lately._

I'm not so sure about this. The Supreme Court is attempting to define and
apply standards that some experts consider arbitrary and highly subjective.
One example is the attempt to make a distinction between a mathematical
function and a novel software algorithm. It almost seems like the distinction
is made based upon whether or not the particular justice writing the opinion
is able to understand it. Some might even go so far as to say that only
_magic_ is patentable (recalling the oft-repeated Arthur C. Clarke quote).

------
bkruse
I was part of a "partnership" with IV and MagicJack.

[http://www.intellectualventures.com/news/press-
releases/magi...](http://www.intellectualventures.com/news/press-
releases/magicjack-vocaltec-completes-patent-deal-with-intellectual-ventures/)

Even though the PR seems to say that MJ is joining the force - you can clearly
see that none of the original Vocaltec/Magicjack VoIP patents have been
asserted against anyone else/used as defense in any patent lawsuit. By playing
ball, we were able to use their patent portfolio to defend against the MANY
patent lawsuits brought against MJ. It did help in a few cases when we were
sued over a number of different VoIP and USB-related patents. From what I
remember, though, it was expensive to be in their alliance and you had to
contribute your own patents as well. The idea itself is interesting. I think a
non-profit could better fill the need for everyone sharing a big patent
blanket.

~~~
bpdenimy
The lawsuits that IV helped you defend against, were those from trolls or from
practicing entities that had patents?

I'm asking because I would think that having a bunch of patents would only
protect you against practicing entities that are in violation of random other
patents just by being alive, it wouldn't really stop trolls from trolling. Do
I have that right?

(Possibly an ignorant question, sorry.)

~~~
bkruse
Not an ignorant question at all!

All were from trolls/non-practicing entities except for one (which we
settled). As soon as we went public, we became a target.

It would come in the form of:

"Hello, we are XYZ company are you are infringing on 1,324 of our patents
related to computing and to communicating over USB - we would be happy to not
move forward with our lawsuit for the sum of $500,000"

We called it the reverse nigerian prince.

It protected us from the vast majority of trolls - and it really came down to
the "thump" test. The thump test is when company A asserts patents against
company B. Company A comes storming in the court room (or via plain ole email)
and drops it's stack of patents on top of the table. We now have to invalidate
each and every claim which puts the vast majority of the burden on us. We
would then turn around and drop our borrowed patent portfolio on the desk and
it would thump pretty loud as well. That stopped 95% of the major patent
lawsuits from moving forward, as stupid as it was. We took an aggressive
stance to counter-sue for patent infringement and ALSO to invalidate via
prior-art. Instead of sharks smelling blood in the water, we stopped getting
the lawsuits because we aggressive sought to not only stop a lawsuit, but to
invalidate the patent from ever being asserted again due to prior art which
could be applied in any future patent lawsuit case (and in some instances,
would invalidate the patent or have it "re-examined")

Unfortunately, I feel there is still a very vulnerable phase of small business
between profitable and not profitable enough to employ these strategies. As
the MJs of the world (~$200M market cap) start to adapt - the trolls simply
get change their nigerian email to $100,000 instead of $500,000 and start
working their way down to smaller companies.

~~~
beambot
Were any of the trolls that brought lawsuits (before MJ joined the fold)
actually one of IV's 2000 shell companies?

[1]
[https://www.techdirt.com/articles/20121220/02365821447/intel...](https://www.techdirt.com/articles/20121220/02365821447/intellectual-
ventures-dont-mind-our-2000-shell-companies-thats-totally-normal.shtml)

~~~
serf
that's an interesting perspective, even if it turns out to be un-true. That's
probably a good strategy.

~~~
bkruse
I think that is the issue - it's a mafia-style "join us or be sued". The
relationship was semi-forced

------
aswanson
I dont get Myhrvold. He was wealthy beyond all get-out and, judging by his
educational background, was probably intellectually curious at one point in
his existence. Why would he direct the fall/winter of his life energy into
this bullshit?

~~~
adventured
It's entirely plausible - perhaps very likely - Myhrvold believes in what he's
doing, believes in patents, believes patents help innovation, and so on.

The world is filled with billions of people that believe truly crazy things,
plenty of those people are smart and successful.

~~~
shmerl
_> Myhrvold believes in what he's doing, believes in patents, believes patents
help innovation, and so on._

I strongly doubt that. It's more likely that believes in filling his pockets
using crooked means.

------
lotsofmangos
_" Bloomberg BusinessWeek reports that IV kept asking the same companies to
reinvest, and if they didn’t, the threat was that the company could always
find something to sue one of the entities over."_

Say, nice corporation you got there. Shame if anything were to happen to it.

------
asaddhamani
This is that patent troll organization right?

"the company has fallen on hard times as some of its bigger investors become
less interested in buying into its funds."

Good.

~~~
ianlevesque
I imagine giving patents from your portfolio to patent trolling companies
(Lodsys), who then sue your client's (Apple) partners, doesn't help.

------
impendia
> The main issue debated is whether or not companies like IV hurt or help
> innovation with its business practices.

This is an interesting point. Has anyone (without a direct financial interest
to do so) made a credible argument that IV is anything other than harmful to
innovation?

~~~
chris_va
Good question, unclear answer.

IV is not a typical patent troll, so the standard patent troll argument is
hard to apply. They do not file large numbers of small lawsuits, but rather a
small number of very large lawsuits (e.g. against the Intel/Ford/AIG types).
They generally do loser pays, and a few other things that make them hard to
bucket as a normal patent troll.

IV spends a large amount of money (billions [1]) on purchasing patents. One
might reasonably expect that to encourage innovation. As I understand it, most
of those patents are not software patents, though (again I am not 100% sure) a
large fraction of their lawsuits are based on software patents [citation
needed]. One might reasonable expect that to discourage innovation.

An interesting anecdote: Nest bought IV licenses to defend itself from
Honeywell [2]. I would argue that Nest is a relatively decent innovation, so
in this (very specific) case, one could argue that IV encouraged innovation.

As I said, hard to balance.

[1] [http://www.reuters.com/article/2014/04/11/us-microsoft-
apple...](http://www.reuters.com/article/2014/04/11/us-microsoft-apple-
patents-idUSBREA3A0R020140411) [2] [http://techcrunch.com/2013/09/11/nest-
buys-protection-licens...](http://techcrunch.com/2013/09/11/nest-buys-
protection-licenses-patents-from-intellectual-ventures-to-fight-honeywell-
others/)

~~~
shmerl
_> IV spends a large amount of money (billions [1]) on purchasing patents. One
might reasonably expect that to encourage innovation._

I don't see how purchasing any kind of patents can encourage innovation.
Innovation is encouraged by returns from the innovation, not by returns from
sold patents. Recycling patents for profit is a completely parasitic business
which has nothing to do with innovation.

~~~
seanflyon
If you give money to people in exchange for innovation that encourages
innovation. That said, purchasing patents only encourages innovation if those
patents are the product of innovation.

~~~
SilasX
Very true. You have to be careful to distinguish between

1) buying patents harms innovation, vs

2) That patent should not have been granted at all.

In my experience, most people arguing 1) either have a very confused argument,
or turn out to actually be concerned with 2).

~~~
shmerl
#1 can be a concern if #2 is too common. I.e. if it's too easy to make junk
patents, trading them can become a lucrative parasite business. So some will
file tons of junk patents just to sell them to trolls. In such scenario the
fact that some are ready to pay for such junk encourages more patent pollution
which only harms innovation.

------
MattyRad
Kind of eerie when you realize you're looking into the portrait of someone
without any conscious or ethics.

I have little sympathy for the employees that got laid off, and am reassured
that IV is finding it harder to operate. However, it's a bit disconcerting
that they've claimed to "automate" their process.

------
shmerl
I hope this whole racketeering workshop will be cut for good sooner than
later.

------
zak_mc_kracken
> Companies could buy into the fund, and in exchange, it potentially received
> legal protection from the patent portfolio.

This is like a gun company asking you to invest in them and in exchange, they
guarantee their guns won't be used to attack you.

There's a word for this kind of practice: extortion.

If anything, I'm sad that the 140 people being laid off only represent 20% of
that scum company.

------
anactofgod
I'd be curious to know what returns have IV realized for it's investors to
date?

Also, "Bloomberg BusinessWeek reports that IV kept asking the same companies
to reinvest, and if they didn’t, the threat was that the company could always
find something to sue one of the entities over."? Sounds like an extortion
racket.

------
thinkcomp
Here's a list of their shell companies:

[http://www.plainsite.org/tags/intellectual-ventures-shell-
co...](http://www.plainsite.org/tags/intellectual-ventures-shell-companies/)

~~~
lawnchair_larry
How did you miss LodSys?

------
shmerl
_> Bloomberg BusinessWeek reports that IV kept asking the same companies to
reinvest, and if they didn’t, the threat was that the company could always
find something to sue one of the entities over._

This is such a brazen shakedown, it's not even funny. Are there any laws which
can be applied to prevent this?

------
kelukelugames
One of the IV execs lived in my building. He was a self-obsessed douche.

~~~
judk
One the IV lawyers gave my kid a stuffed toy. I felt dirty accepting it, once
I learned the provenance.

------
inthewoods
Wow - I don't think I've ever seen a company discussed on HN that didn't have
a single defender. IV may be the most hated company ever!

------
51Cards
Intellectual Vultures would be a more apt name.

------
lostcolony
540 left to go.

------
ww520
20% for 140 people. That's 700 people. Do they really need that many people to
buy patents?

------
higherpurpose
Alice effect?

