Seven years ago, Intellectual Ventures paid $750,000 for a patent. They are now suing Symantec and Trend Micro for infringing the patent for about $310 million.
The two companies are asking a federal judge to bar IV from seeking such large licensing fees on the grounds that a patent acquired for so little couldn’t possibly be worth so much. That’s on top of more traditional arguments that Symantec and Trend Micro do not violate IV’s patents in the first place.
In court filings and at a hearing in August, Symantec and Trend Micro lawyers argued that the law prohibits IV from calculating such a high royalty. A patent license is, by definition, less valuable than outright ownership of a patent, Symantec and Trend Micro lawyers said.
If this argument succeeds, this will change the game for patent trolls, especially if the Supreme Court allows defendants in patent battles to recover attorney fees.
Intellectual Ventures is a modern version of the mafia, using the same shakedown methods. “That’s a pretty little business you have there, it’d be a shame if something happened to it. But if you invest in us, we’ll help protect it.”
It would be hard for this argument to succeed, as there doesn’t seem to be any previous decision to base it on and it seems counter intuitive to the concept of patents, as related to the inventor. A patent is supposed to give the inventor time to profit from their invention, either through developing their products or license their ideas, therefore, it’s hard to determine the value of a patent from an inventor point of view.
Of course, that being said, how does the above apply to a third party acquiring the patent? That’s the grey area we are in. One could argue that the third party acquires the same rights as the inventor.
And then there’s the question of software and business process patents which most of these lawsuits seem to be based on.
In another note, I’m surprised IV actually pursued this case, they usually farm them out to non-practicing entities that are all based out of a single, dusty office in East Texas.
What a silly theory.
A patent is worth exactly the paper it’s printed on if it’s not enforced. The license fee is proportional to the value derived from using the patented invention and not related to the cost of creating the invention.
Hopefully the lawsuit will also prevent them from using the word “Intellectual” in their name in favor of a more accurate adjective such as “Devious” or “Disgusting.”
regardless of how one feels about IV or patent law in this country, this is a dumb argument. one should not advance dumb arguments to further a smart or noble cause, as you just end up hurting your own credibility, and perhaps the credibility of your cause through that.
Imagine you see a piece of property for sale, and the own doesn’t know what it’s worth. Should you be allowed to strike the best deal you can for the land? Our system says, “Of course!”
1) Imagine you then immediately have the opportunity to flip it, and make a ton money selling to someone else who realizes the potential in the property. That shouldn’t be illegal, should it? There shouldn’t be cap on how much money you can make that way, right?
2) Imagine that the land is so valuable because it has a deposit of precious stone in it. Should you be able to lease mining rights for more than you paid for the property? In our system, of course you can.
3) Imagine that there’s a largely vacant hotel on the property, but because of someone outside your control (natural disaster? urban planning? best selling novel set in a nearby town?), suddenly traffic will be greatly increased on the road in front of the property, and there is suddenly huge demand for the hotel. Should you be allowed to charge whatever you want for the rooms? In our system, of course you are.
Are any of these analogies JUST EXACTLY LIKE this patent case? Of course not. There are no perfect analogies. Depending on your precise objections to patent law, you will pick on these analogies differently.
But objections to patent law are essentially based in a objections to a) what can be patented and b) treating patents l like other property. They are objections to what the law IS, and this court cannot change the law.
So, it is dumb argument. Heck, I think it’s a dumb argument regardless. It presumes that our economic and legal system does not allow someone to rip off someone else who doesn’t understand the value of what they own. But yard sales, flea markets and ebay are built upon the idea that such a thing is possible.