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When Patents Attack

by:QY Precision      2019-09-22
Update, July 26: This weekend, Alex Bloomberg of money planet and NPR\'s Laura Seder aired the story on American life. (
Check out TAL\'s \"How to Listen\" page to see how you can hear the story. )
A shorter version of the work is also aired today on everything considered.
This is the story.
Nathan Myhrvold is a genius and a math expert.
As Microsoft\'s CTO, he made hundreds of millions of dollars, found dinosaur fossils, and recently worked with Microsoft. authored a six-
Volume recipes for revealing science
Inspired Techniques for cooking food.
\"Myhrvold has more than 100 patents for his name, and he has shaped himself into a person who is determined to give his fellow inventors the rights they deserve.
In 2000, he started a company called \"intellectual enterprise\", which he called \"the company that invested in inventions \".
\"But among many Silicon Valley insiders, mywald\'s company has a different image.
Techdirt, an influential blog, often refers to intellectual adventure as a patent troll.
IP Watchdog is known as \"the number one public enemy of patent trolls \".
\"These blogs are about how knowledge firms have accumulated one of the largest patent portfolios available and are asking for help from technology companies that ask for funding to license these patents.
At present, patents are a big deal in the software industry.
Litigation surged.
To protect themselves, big tech companies are spending billions of dollars on a huge patent portfolio.
Computer programmers say patents hinder innovation.
But people in companies that knowledge firms have come into contact with don\'t want to talk about it publicly.
\"There\'s a lot of fear of intellectual adventure,\" says Chris Sacca, an early investor in Twitter and other companies.
\"You don\'t want to make yourself a goal.
\"Sacca will not say whether an intellectual business is connected to any company he invests in.
\"I\'m trying to get you in touch with the rest of the community and talk to you about it, and they\'re pretty much in agreement that they can\'t talk to you,\" Sacca told us . \".
\"They were scared.
\"IV has the ability to\" completely eliminate startups \", Sacca said \".
Nathan Myhrvold (pictured above)
There is a very different story about intellectual adventure.
He laughed when we asked him if IV was a patent troll.
\"This is a term used by people to refer to people who don\'t like to have patents,\" he said . \".
\"I think you will find that almost all the people who defend their patent rights are called patent trolls.
The Intellectual Adventure is the opposite, says Myhrvold.
It stands on the side of the inventor.
It pays the inventor a patent fee.
It brings together patents into a huge warehouse of inventions that companies can use if they want.
It\'s a bit like a patented Department Store: No matter what technology you\'re looking for, there\'s IV.
The company even has its own large lab where people walk around in white lab coats, mix chemicals with a beaker, and observe things with a microscope.
There is a machine shop.
Part of nanotechnology.
It\'s like a playground for scientists and engineers.
IV says it has invented a nuclear technology that is safer and greener than existing technologies.
A cooler that can keep the vaccine for several months without electricity.
The highest in the world
Technical mosquitoes.
But the lab is just a small part of the IV.
The company has received about 1,000 patents on what it has filed in the laboratory;
It bought about 30,000 patents from others.
In fact, there\'s nothing in this lab.
Not mosquito traps, not nuclear technology.
Has been put into commercial use.
For its part, IV says its job is to encourage invention, not to bring products to market.
Imagine an inventor.
A person with good ideas, a breakthrough.
The inventor has a patent, but the company is stealing his ideas.
The inventor has no money and no legal mind to stop them.
That\'s the source of intravenous injection.
It buys the patent of this inventor and ensures that the company that uses this idea pays for it.
When we asked for an example of an inventor in this case, a person with a breakthrough, he was not paid, and two different people from IV pointed us to a name called Chris Crawford.
Joe in cut Ness-based
The president of the Knowledge Enterprise said: So we went to talk to Chris Crawford.
But it turns out it\'s harder than we thought.
It led us on a five-month journey in which the story told by the knowledge business was not appropriate.
* When we followed up with IV to get contact information for Chris Crawford, the company told us that it no longer has a patent for Chris Crawford.
The company says Crawford may not want to talk now because he is in litigation.
We started digging around and found Chris Crawford in Clearwater, Florida.
As predicted, he has never responded to many of our emails and calls.
You can never hear him in this story.
But we found Chris\'s patent.
number 5771354.
He got it in 1998.
IV the way to explain the patent to us is that Chris Crawford invented what we have been doing now: he came up with a way to upgrade home computer software over the Internet.
In other words, when you open the computer, a small box pops up with the words \"Click here to upgrade to the latest version of iTunes\", which is Chris Crawford\'s idea.
But when we look at the patent, it seems to claim more than that.
The name of the actual invention is \"online back-up system.
\"The patent says the invention makes it possible to connect online service providers to do a bunch of things --
Software procurement, online leasing, data backup, information storage.
This patent makes it seem that Chris Crawford invented many of the most common things we do on the Internet.
We don\'t know what\'s going on with all this, so we went to see David Martin, who runs a company called M-Cam.
It is hired by the government, banks and businesses to evaluate the quality of patents, and the company uses a fine piece of software to evaluate the quality of patents.
We asked Martin to evaluate Chris Crawford\'s patent.
Martin said that while Crawford\'s patent was sued, more than 5,000 other patents were issued for \"the same thing.
Crawford\'s patent is \"online backup system \".
Another patent at the same time is \"efficient backup of files using multiple computer systems \".
The other is \"mirroring data in a remote data storage system \".
\"Then there are three different patents, three different patent numbers, but all have the same title:\" Systems and methods for backing up computer files through a wide-area computer network.
Martin says there are about 30% in the United States. S.
Patents are essentially something that has been invented.
For example, on 2000, the patent office approved a patent on making toast.
Patent No. 6080436 \"bread refreshing law \".
\"We also asked patent attorneys, former software engineer Rick Mc Leod, to evaluate Chris Crawford\'s patents.
\"These are not new,\" he told us . \"
Mc Leod wanted to see if others in the field were already doing what Chris Crawford claimed to have invented when he first filed a patent in 1993.
Here\'s what he found: McLeod says he doesn\'t think patents should be released in the first place.
For a long time, the patent office has agreed with Rick Mc Leod.
For a long time, the patent office was not willing to grant a software patent at all.
For decades, the patent office has always believed that software is like language.
Software is more like a book or an article.
You can copyright the code, but you can\'t patent the whole idea.
In the 1990 s, the Federal Court stepped in and began to weaken that interpretation.
There were several major decisions, one in 1994 and the other in 1998, which completely overturned the patent office.
A large number of software patents follow.
Many in Silicon Valley hope this has never happened, including a very surprising group of computer programmers.
\"Over the years, I \'ve worked on a bunch of patents in my career, and I have to say that every patent is just junk,\" said programmer Stephan Brunner . \".
Brunner says the software patents he works for himself don\'t even make sense to him. (
For the record, Stephan Brunner has a patent for \"configuring the user interface using structures and rules. \")
One afternoon, we stumbled across Stephen at a park South Park in San Francisco, where a lot of tech people were having lunch.
On the same afternoon, we talked with six different software engineers.
They all hate the patent system, and half of them have patents in their names that they don\'t think should be granted.
As many as 80% of software engineers say the patent system actually hinders innovation.
This does not encourage them to come up with new ideas and create new products.
It actually got in the way of them.
Many patents are so extensive that everyone has an infringement, engineers say.
This brings huge problems to almost everyone trying to start a business or develop a business on the Internet.
\"We are in a state of intellectual property, and existing patents may cover every behavior that happens on the internet or mobile phones today,\" said venture capitalist Chris Sacca . \". \"[T]
Average starting point in Silicon Valley
Whether it\'s a mid-sized company or a mid-sized company, no matter how innovative they are, I have no doubt that every aspect of what they do violates a patent.
That\'s why the system is now fundamentally broken.
\"** This brings us back to Chris Crawford\'s patent, where patent knowledge firms are cited as examples of how they can encourage innovation by ensuring that inventors are paid.
As we said, the patent also seems to cover a large part of what happens on the Internet: upgrading software, buying things online, and what is called cloud storage.
If you have a patent on all of this, you can sue a lot of people.
In fact, that\'s the case with Chris Crawford\'s patent.
Intellectual Venures sold to a study called Oasis in June 2010.
Less than a month later, Oasis Research used the patent to sue a dozen different technology companies, including Rackspace, GoDaddy and AT&T.
We called Oasis several times but no one answered.
For some time, the company\'s voice mail directed all the questions to John de Malas, a lawyer in New York.
He didn\'t call us back, but we found him at an intellectual property conference in San Francisco.
He quoted a lawyer.
Customer privileges, nothing to tell us
Not even the owner of Oasis research. (
He said he was a big fan of NPR. )
There is little public information about Oasis research.
There is no way to know who owns it or how many employees it has.
One of the few details available is the address: 104 E.
Suite 190 Houston street Marshall, Texas.
So we went to Marshall.
The door of the Oasis office is locked and through the door seam we can see that there is no light inside.
Knocking on the door of the office is a bit old.
But we flew a long way. So we knocked.
No one answered.
The office is in a hallway and all the other doors look exactly the same ---
Locked, nameplate on the door, no lights out.
This is a corridor of silent, empty offices with names such as \"software rights Archives\" and \"bullet proof technology in Texas.
\"It turns out that a lot of companies in the corridor, maybe every company, are doing what Oasis research is doing.
They don\'t seem to have employees.
There will be no new invention.
The companies are located in the City of Marshall, Texas, where they filed a lawsuit for patent infringement.
In Marshall, East Texas, patent litigation is a big deal.
Many say Marshall\'s jury is friendly to the patent owners who are trying to get a big verdict.
A local lawyer who has debated both sides of numerous patent cases said that this is actually because in Marshall, the case is heard faster than elsewhere.
In any case, thousands of lawsuits have been filed there claiming that an inventor\'s invention was used without permission.
But Marshall had no inventor, only an empty office corridor.
We did find a key detail of Oasis research.
This is in a legal document called \"certification of interested parties\" which lists all entities with economic interests in the oasis.
Tom Ewing, an intellectual property lawyer engaged in tracking the IV business, brought it to our attention.
The Oasis file lists the usual parties
Plaintiff, defendant, lawyer involved.
But it also includes another name: intellectual adventure.
Peter dettkin, a lawyer.
Start an intellectual business with Nathan Myhrvold and tell us that IV may have a \"back office\"
\"End arrangement\" with Oasis \".
In other words, dettkin said, \"We sold some money in advance and we got a certain percentage of royalties from these assets.
\"This means that intellectual adventure is likely to get any money from the Oasis lawsuit.
Oasis is a company that has no operations, no products, no employees as far as we know, and since 1998 it has used a very extensive patent to sue a dozen companies.
As it happens, detekin is the one who created the term \"patent troll.
\"When he worked for Intel in 1999, he came up with this approach.
We asked him what it feels like to make money from an entity that acts much like the patent trolls he once condemned.
In other words, he said, we are trying to license these patents in a friendly way.
But sometimes you have to sue.
Then detekin repeated the company line we heard from many people at IV: The mission of intellectual adventure is to help inventors bring great ideas into the world.
We asked him if he could point us to a patent that was in recession, but then got permission and got it.
\"Two transactions have been completed,\" he said . \".
One is from the toy company. The other was. . .
I don\'t remember the technology last Christmas, but I don\'t know how it did it.
He went on to say: \'This is a good thing, \'said dettkin, because it means the inventor --
The person holding the patent-get paid.
This in turn creates momentum for people to invent new inventions.
But four don\'t buy inventions.
It\'s buying a patent.
Most software engineers will tell you that patents and inventions are different, at least in terms of software.
Many patents cover things that people who live on software don\'t even think about inventions.
All the big tech companies are starting to accumulate a lot of software patents.
It\'s not about what to make, it\'s about protecting yourself.
If the patent tribe of a company is large enough, it can basically say to the world, \"If you try to sue me with your patent, I will sue you with my patent.
\"This is a mutually assured destruction.
However, it is not an arsenal of nuclear weapons, but an arsenal of patents.
This is a problem that Nathan Myhrvold, founder of intellectual adventure, said that when he first started the company, he was trying to solve.
He and the rest of his company talked about a problem at investor meetings across Silicon Valley.
Chris Sacca attended one of the meetings a few years ago.
Basically, what he hears is intellectual adventure, which helps to defend against litigation.
Knowledge Enterprises have 35,000 patents
The patents that companies can use to defend themselves in price terms.
The Intellectual Venture capital costs paid by technology companies range from tens of thousands to millions or even millions of dollars. . .
Buy insurance for themselves to protect them from any harmful, malicious outsider, \"Sacca said.
Sacca says there is a hint on the field at IV: If you don\'t join us, who knows what will happen?
He said it reminded him of the Mafia\"
Style adjustment, someone came to the front door of your building and said it would be a shame if the place was burned.
I know the block very well and I can make sure this doesn\'t happen.
Sacca continued: in an email to us, Peter dettkin called the comparison with the mafia \"absurd and offensive \".
Dettkin wrote: True enough.
But you can see why a lot of people feel a lot of meat shops are burning.
As we report the story, more and more intellectual enterprise patents are beginning to appear in the hands of Oasis companies, companies that do not have employees or operations, which were founded to file a lawsuit.
They are called non.
Practice entity or NPEs.
NPE used a former IV patent to sue 19 different companies, including Dell, Abercrombie & Fitch, Visa and UPS.
These companies all have websites that pop up when you scroll the mouse in certain partsThe up box appears.
\"We have patents on this,\" said NPE.
\"This will cause patent infringement to be committed on almost the entire Internet.
Another set of former IV patents is currently being used in the most controversial case in Silicon Valley.
A NPE called Lodsys is suing about 30 companies that develop apps for iPhones and Android phones.
Lodsys says it has the patent to buy goods in a smartphone app.
An interesting question about this case is: the address of Lodsys is 104 E.
Suite 190 Houston Street, Marshall, Texas.
Same exact address as Oasis Research until suite number.
* For this story, we call the person who has a license arrangement for IV, we call the person who was accused in the lawsuit involving the IV patent, we call the person who was sued by Oasis Research
No one will talk to us.
Part of the reason may be fear.
Part of the reason is that agreements with intellectual enterprises include
It is rumored to be the most stringent disclosure agreement in Silicon Valley.
The Oasis research case is still in progress, but many of the original defendants appear to have been reconciled.
Michael Smith, a lawyer for Marshall, Texas, represents one of the defendants.
He is sure that they will win the case if they are tried.
But his client has solved it.
He said sometimes it makes more sense to settle and pay licensing fees than to spend $2 million to $5 million on court cases.
Tom Ewing, a lawyer who tracks intellectual adventures, said that we may see more such cases in the future.
To buy its 35,000 patents, knowledge firms raised $5 billion from investors.
Since its inception in 2000, intellectual enterprises have generated $2 billion in revenue.
But uain says it has to do better to keep investors happy for the next 10 years: \"intellectual adventure seems to have signed some agreements, uain said.
\"If there is no significant increase in the flow of transactions they sign, I think they will be forced to file more lawsuits to achieve their revenue targets.
Eain\'s forecast seems to have come true.
Earlier this month, knowledge firms themselves filed a lawsuit in federal court alleging that several of their alleged companies had violated some of their semiconductor patents.
* In early July, Nortel, a bankrupt technology company, auctioned 6,000 of its patents as part of the liquidation.
A bidding war broke out among the big Silicon Valley giants.
Google says it hopes the patents are purely designed to defend against lawsuits and is willing to spend $3 billion on them.
This is not enough, though.
The product was eventually sold to Apple and other technology companies, including Microsoft and Ericsson.
Price tag: $4.
$5 billion.
Five times the bid opening.
Most of the people involved expect more than twice as much.
The biggest patent auction in historyThat\'s $4.
With 5 billion patents, these companies almost certainly don\'t want their technology secrets. That $4.
5 billion will not build anything new, will not put new products on shelves, will not open new factories to hire people who need work. That\'s $4.
The price of each product sold to you by these companies has increased by $5 billion. That\'s $4.
Buy $5 billion for ongoing patent wars.
Big company-
Google, Apple, Microsoft
May survive.
The possible casualty is that no one has heard of replacing their company one day.
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