back to article Patent troll Intellectual Ventures is more like a HYDRA

Stanford University researchers have compiled the most extensive set of documentation to date of the activities of patent troll Intellectual Ventures – and their work reveals a behemoth of truly epic scale. The study, The Giant Among Us, turned up an impressive 1,276 shell companies operated by Intellectual Ventures, at least …

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Anonymous Coward

Patent trolls should be taken care of as it they were termites.

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Unhappy

Termites fulfill an important role in the ecosystem!

Patent trolls, however, do not fulfill any role in the economic system except one similar to a tax collector or protection money extractor.

And what do universities think they are doing allying with the cancer?

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Re: Termites fulfill an important role in the ecosystem!

If this entity works through such a large network of shell companies, it's entirely possible that the universities aren't aware that they're working with a patent troll.

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Simple Solution

There is a way to stop the hydra, in the event one of these subsidiaries goes under force the patent to go on a public auction rather then allowing the bankrupt sub-entity to sell it back to it's parent.

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Mushroom

Re: Simple Solution

No the Greeks taught me that you have the cut the heads off the hydra and set fire to them and Dungeon and Dragons taught me that fire also stops trolls from regenerating so whatever the solution is to patent trolls I'm confident that it involves a flamethrower (and possibly a sword).

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Anonymous Coward

Better solution.

Destroy the patent system.

I'm not kidding. It may have had a purpose once, but it now causes more harm than good. Intellectual Vultures have sod all to do with protecting inventors, and neither do many other patent holders.

It's time to take Old Yeller out back and perform a concussive reset. Whatever follows.. don't include software or methods, and don't allow the protection to be sold around like a product. Software and method patents are responsible for overloading the existing system, and being able to buy and sell patents like products is what gives rise to trolls. You either protect the inventor, or nobody, and bollocks to "having the freedom" to sell your rights to protection. That, as shown, has turned into "must sell your protection to make anything at all".

You can't sell your right to a fair trial, you can't sell your right to be protected from cruel and unusual punishment, so why can you sell your right to recompense for a popular invention?

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Re: Better solution.

> so why can you sell your right to recompense for a popular invention?

As long as the inventor can license the use of the patent to manufacturers. Otherwise exploitation of new products would be unduly hampered.

We need a means of making it more rewarding for the cadre of patent lawyers to hunt down and repudiate bad patents rather than to engaging in the present flim-flam and obfuscation practices that promote dubious "patents" and cause so much harm to real invention.

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Re: Better solution.

"We need a means of making it more rewarding for the cadre of patent lawyers to hunt down and repudiate bad patents rather than to engaging in the present flim-flam and obfuscation practices that promote dubious "patents" and cause so much harm to real invention."

Well said.

Know you of such a means?

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Bronze badge

Re: Better solution.

> Know you of such a means?

Perhaps punitive damages for misleading, or false statements, or failure to disclose in the applications for patents that are overthrown. Permit any competent party to contest any patent. The contestant deposits a bond, that limits the amount of costs that can be claimed by either side. If successful the contestant gets a large proportion of the punitive damages. The court can make an award to the patentee against the contestant in the case of a n overtly frivolous, unfounded or malicious action.

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Anonymous Coward

Re: Better solution.

"Destroy the patent system."

Sadly, it has already been destroyed by the lawyers, judges and officials who administer it. They are all quite happy as things are right now; lawyers get megabucks for their work, judges get a lot of court time (and are all ex-lawyers anyway), and the officials are happy to have a lot of work to do (as you pointed out, largely because of software patents) handing them out in the first place. Fixing the patent system will mean all of those people losing out somehow.

The courts and judges in particular are beginning to look ridiculous, and I think it's time that their actions are questioned. An awful lot of court time is being wasted on matters as trivial as rectangles. I'm sure there's far more important cases that matter a lot more than whether Apple are being done out of a few million dollars or not. The only people who can examine the courts are the politicians; but of course a lot of them are rather partial to some high calibre lobbying on the part of the lawyers...

What it will take is a significant piece of academic research to make it unarguably and blatantly clear that the national economic cost (hence jobs) is high. Then it will truly become a political point that politicians can't ignore. That'll be difficult though - it would probably have to be in terms jobs that never came into being because of the current system, rather than jobs lost.

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Anonymous Coward

Re: Better solution.

"Sadly, it has already been destroyed by the lawyers, judges and officials who administer it."

Really? Because to me, Bayliss' judgement read "Stop wasting my goddamn time with this petty crud".

So I'm guessing not all the judges are loving it.

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Unhappy

Re: Better solution.

I 'll note that in the US they don't seem to do much "examining" of a patent before dishing them out. They seem to just take the money. I'm not sure if that's only for software patents. but they seem to think the courts should decide.

Sounds like a system that's been "improved" by lawyers to me.

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Mushroom

Re: Better solution.

One person suggests fire. Another suggests destroying the patent system.

I would argue that said solutions are not mutually exclusive. :)

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Anonymous Coward

What taxes are they evading?

Complicated business structures cost money to run so there is usually a reason for doing so. And usually that reason is tax evasion. Perhaps some of our US readers could write to their Congressman and ask for an investigation?

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At a guess

The structure provides a firewall through limited liability. Losing a patent case has the potential to generate substantial costs in damages. Trolls don't want to risk being wiped out by a couple of losses.

Others may have better suggestions.

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Vic
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Re: What taxes are they evading?

> And usually that reason is tax evasion

Not in this case.

With a patent troll, a loss in court could imply a significant loss of assets - both IP[1] and money.

But by doing business[2] by way of these shell companies, a loss in court just means that the shell company goes bankrupt. The prevailing defendant gets *nothing*.

The effect is of litigation without risk; a win means mucho wonga, which is siphoned back to the parent. A loss means that the shell is discarded at minimal cost. There ought to be a law against it...

Vic.

[1] Ha!

[2] See [1]

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WTF?

Re: What taxes are they evading?

Wouldn't a structure of companies like that which operate in the manner outlined in the article fall under the RICO act (IIRC), as that sounds a lot like racketeering/extortion.

Step 1. Ohhh that's a nice product you have there, we have a patent, you know. "Sod off, troll"

Step 2. Ohhh that's a nice business you have there, shame if something were to happen to it. "Hey I told you sod off"

Step 3. OK, Tony, break his legs. "Ow, take my business"

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Re: At a guess

"The structure provides a firewall through limited liability. Losing a patent case has the potential to generate substantial costs in damages. Trolls don't want to risk being wiped out by a couple of losses."

Problem is patent trolls don't want court cases cause that costs everyone money and nobody wins. All they want is a sweet licencing deal which they obtain under the threat of legal action.

If it's going to cost you $2M to take it to court and no guarenteed outcome or $1.5M to licence it from the troll what do you pick? This is how the trolls make their money.

The simple solutions is that patents cannot be owned by entities that don't use the patent. Trolls make nothing and therefore cannot own patents

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Stop

Ban Hidden Patents

We should go back to the system of requiring that products have a label that disclosed any pertinent patent numbers. No label, or the withdrawal of associated products from the market means that the patent is deemed to have lapsed. The labels show whether the the patents are provisional (applied for) or approved (granted). It is only relatively recently that we have been burdened with legal artefacts fo(i)stering the award of patents for unimplemented ideas, algorithms (including programs), etc. and the ensuing rise of the patent trolls.

National patent offices should also either to revert to being public offices, funded out of corporation taxes, rather than being treated as independent profit centre agencies. Or else if they continue to abrogate their responsibilities as patent examiners to the courts, the patent offices should bear the costs of successful appeals against improperly awarded patents.

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Happy

Re: Ban Hidden Patents

A small but complex widget like a smartphone often would not have enough surface area for engraving all the patent numbers...

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Re: not have enough surface area

Patent numbers were often printed on the packaging, or an enclosed leaflet.

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Happy

Re: Ban Hidden Patents

Web address and design ref # can list unlimited number of patents.

Not feasible for *really* small widgets but certainly on their packaging or paperwork. And aerospace widgets usually come with *lots* of paperwork.

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Re: Ban Hidden Patents

Why not just a QR code. Tiny amount of space and you could store a fair few patent numbers in there.

As for the whole patent arguement going on here. I approve of hardware patents, if you find a new way of doing something n hardware that normally takes some kind of creative thinknig. Ancient example the combustion engine, nobody had really thought of that before, it was made, and thus deserved protection.

Something the company I work for makes, every company used method A, this company invented method B and sold it with their own product, they deserve protection because they actually created something functional.

Any patent should take into consideration at least the following things

1: Is it functional (as in, does it perform an action of some kind)

2: Is it original (not derivative of other works in the same field)

3: Is it operational (do they have a working prototype, you should patent inventions, not ideas)

If the answer to any of those is no, it shouldn't warrent protection.

I agree 100% that software patents are bull, because unlike hardware patents, you can't see the underbelly. A combustion engine you can make in several ways, you've got a W, V, Wankle X all the same output, but the functionality is different. Software you'd just have the external appearance factored in. All of those engines cause forward momentum (okay the engines don't but go with it) a software patent would protect forward motion, am I making any sense here?

Software patents should be reserved for the code complexities beneath. Example peer2peer. For ages we had P2P such as Kazaa or emule, they got supersceded by a new standard, Torrent. Torrents are being swapped out for magnet links. Magnets will soon be replaced with something else. Kazaa and Torrents are fundamentally the same, and different. Both are p2p systems, but operate on the code level in very different ways.

We should also stop the stupid "blah blah Existing PC patent, for mobile devices"

Lets face it, a mobile device is a PC. Definition of a PC from wiktionary

A microcomputer designed for use by one person at a time.

That sounds a lot like a mobile phone if you ask me. Under that logic, any mobile patent that is a derivative of a PC patent should be invalidated because the patent already exists.

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Anonymous Coward

Re: Ban Hidden Patents

Another issue is you could literally have thousands and thousands of patents on a "simple" thing as a desktop pc. That's why many large companies, such as Apple, Intel, AMD, MS all have licence pools. They simply say, buy all our licences relating to X for Y amount.

However, I do not believe in non-disclosure. If MS (or anyone) say "This product has infringed out patents", they must be legally bound to say what those patents are. Not allowing a competitor to work around your patents by not disclosing what they are should be an offence in itself

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Re: Ban Hidden Patents

You missed something out -

4: True Innovation

A patent should only be granted for something that would make peers of the inventor or those in the same field think "Wow" that is a great product/invention/solution.

The patent system already has a clause for obviousness but it doesn't seem to be applied properly (at all?)

Maybe it should be more like a peer reviewed journal where patents are first published. The editor has the first say as a broad overview of that industry and then peers debate how obvious the patent. Maybe it starts with the problem being solved being published first and a list of responses from peers are then submitted - if the solution really turns out to be a unique one (and not just an obfuscation of a solution someone else would likely come up with) before finally having the patent itself presented with a final check of obviousness.

I'm guessing the problem is resources, however some like-minded people with, hopefully a big reduction in applications, could make it work. If Wikipedia can reach a bazillion user generated articles I'm sure this Patent review system could.

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Go

Re: Ban Hidden Patents

AC said: Not allowing a competitor to work around your patents by not disclosing what they are should be an offence in itself.

Maybe not an offence, but a defence for the competitor if the patent holder later tries to assert the patent in litigation. This would restore some of the value to the State of having a patent system at all, viz. that it is intended to drive the progress of technology. Some of that progress must consist of ingenious, different and quite possibly better ways of doing something. If you don't even know what patent you're supposed to be working around, that can't possibly happen.

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Re: Ban Hidden Patents

But it's got room for the manufacturer's name, country of origin and a model number. From which, a URL for an information page can easily be inferred.

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Re: Ban Hidden Patents

"A patent should only be granted for something that would make peers of the inventor or those in the same field think "Wow" that is a great product/invention/solution."

I think you'll find the phrase "Not obvious to a skilled practitioner in the art" which comes up fairly frequently in the "claims" sections of patents.

How often it is applied (and in what countries) is another matter.

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Apart from the shell companies

They've been taking lessons from IBM

Being US patents, there's the issue of "design patents" vs actual patents. The rest of the world uses registered designs.

As for rebooting the patent system - it's been done before due to widespread abuse, but it was a long time ago.

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Anonymous Coward

"HAIL HYDRA!"

"Cut off one head and two more will take its place!"

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Devil

"a more aggressive third party"

"Nice product you've inveted here, Squire. Be a shame if anything happened to it, know what I mean..."

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Anonymous Coward

Gates doesn't change his spots

Same trolling shit learnt at MS gets ported to Intellectual Vultures.

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Must implement clause

Patent law should be amended to include a "must implement" clause on all transferred patents.

In other words it would be illegal (and render the patent invalid) to buy a patent with no intention to implement it. It would be a valid defence against a infringement claim that the plaintiff is not the originator of the patent (i.e. they bought it) and have made no attempt to implement it.

This would protect original patent authors and those who purchase patents in order to implement them, but would block patent trolls from buying up patents to sit on them as a sort of innovation bear-trap.

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Headmaster

A more aggressive third party

"if its target appears reluctant to play ball on a first approach, Intellectual Ventures then licenses its patents to a more aggressive third party"

I suggest that such an entity taking cases from a patent troll should be termed a patent trollop.

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Terminator

It has begun

These are merely the intial stages of Economics 2.0. Prepare to be rendered obsolete, humans.

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Thumbs up...

...for the Accelerando reference.

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Mushroom

Check this out:

http://www.thisamericanlife.org/radio-archives/episode/441/when-patents-attack (approx. 1 hour)

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This post has been deleted by its author

I remember the original Freakonomics book had a glowing eulogy on Intellectual Ventures

They were going to save the world through science and stop hurricanes from forming, among other things.

I wonder if that was a paid-for PR puff-piece. I guess that passing that off an advertorial you've been paid to print as fact to readers who pay to buy your book would be a stellar piece of economics work.

I agree with whoever above said that patent rights shouldn't travel. I don't know how to enforce it in practice, and I know any system is open to gaming and abuse, but instinctively a system which protects the original innovator without creating an unseemly and innovation-destroying land-grab from the world's largest corporations is something the western world sorely needs if we're not to decline faster than a dead parrot.

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Pint

At some future date, someone who is being aggressively attacked by a patent troll will counter-sue citing RICO or similar. Eventually patent trolling will come to be recognized as a form of racketeering and laws will change. But the it could be a very long wait in the mean time.

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