Software Patent Law Sucks: I Hate Companies Like Intellectual Ventures

Day 2 of 30 of Writing Challenge

I finished listening to NPR’s This American Life episode about patent trolling today. You would think it’d be boring, but This American Life always manages to draw me into what you’d think be boring shows. The premise of this episode was the examination of how software patents and the litigation that often follows affect innovation.

The story starts out with the reporters interviewing an entrepreneur who started and currently runs a photo sharing website. He received a letter from a company claiming that his company was infringing on their patent. A patent that was filed a few years after he had already started the company. The patent itself was broad and covered something to the affect of anyone creating a service to distribute photos on the internet. The lawsuit named not just his company but 116 other companies. In order to fight the lawsuit the entrepreneur was told it would cost upwards of 5 million dollars. In the end he and the other companies settled.

The rest of the story examines the shadiness of a company called Intellectual Ventures. Intellectual Ventures  is a relatively new company headed by Nathan Myhrvold, the former CTO of Microsoft. The company raised billions of dollars from VC’s and other institutional investors with the intention of amassing a large portfolio of patents so other companies could license the patents from them. IV claims that what what they do gives inventors a way to make money from their inventions and allows other companies a way to license those technologies. Win-win for everyone!

However, all that glitters is not gold. When the reporters pressed representatives what examples they could give of Intellectual Ventures helping inventors they were only able to give them one example, an inventor name Chris Crawford. But as they investigated further they found that Chris Crawford wouldn’t talk to them and that later that IV had sold his patent to another company called Oasis Technology (don’t remember the exact name) and they were currently suing someone for infringing this patent. When they went to track down Oasis to learn about the patent it turned out it was just a shell company; one of many shell companies in the small town of Marshall, TX, in an office building filled with empty office suites.

What they discovered later was that Intellectual Ventures had ties to the Oasis company as well as upwards of 1300 other shell companies. They opened these companies as a way to sue individuals without making it seem like IV was the responsible party (since they protect the little guy). The reporters discovered this since IV was listed as one of the beneficiaries of any settlement or damages on court documents. To date IV has made 2 billion dollars but aside from the lawsuits has very little else to show from making that money.

Listening to the whole report made me extremely angry and illustrated several problems. The first problem being the patent office granting software patents. I didn’t know that it wasn’t until the mid to late 90′s where software patents weren’t granted. You couldn’t do it. Over time though through different cases they were able to get that over turned after they allowed it  people started patenting everything they could think of. One of the guys they interviewed in the story shared how 30% of the patents granted are patents for the same thing. The worst part of these patents is they are too broad and non-specific. People are patenting crap like “a system to share messages in a social way on the internet.” Because of this patents are now being used as weapons as opposed to spurring innovations which was why they were created in the first place. The thinking being the more sharing of ideas the better inventions that could come from it. However, people don’t like to share if they think there idea could be stolen. This idea of patents for physical inventions makes sense.

In the case of software patents, though, people are patenting ideas and not actual software code. The reporters highlighted the fact that copyrighting code like how authors copyright books made more sense than patents.

The other problem I have with this whole story  is the law system. It made me loathe lawyers and the system even more than I already do (apologies to my lawyer friends). 5 million dollars to defend yourself in court? Why does a case like this have to be so complicated? Here’s how it should be. Plaintiff  gets 5 pages to say why and how the defendant violated his patent. Defendant gets his 5 pages. They go to court, give the judge their evidence, make their arguments and then the judge rules. Case closed. All cases should be like Judge Judy or the People’s Court. No lawyers. It should cost $20 not $5 million.

My biggest issue with the system is it incentivizes people who have money to bully people who don’t have money. Because they know even if they are completely wrong that you don’t have the money to defend yourself so you have no choice but to settle. If we followed the Judge Judy patent law system I just made up there’s no doubt they would think twice about threatening people.

That’s my rant. And now Day 2 is finished!

Post a Comment

Your email is never published nor shared. Required fields are marked *