Fortune takes a look at 'patent trolls'
A Fortune article posted on CNN Money reveals some interesting tidbits about one of the stranger artifacts of modern patent law: patent trolls. The article defines a patent troll as follows:
Patent troll (n., derogatory): An entity that neither invents nor makes
products but instead acquires patents and uses them to extort money from
legitimate businesses by suing or threatening to sue.
The article takes a look at Intellectual Ventures (IV), a company
founded by ex-Microsoft CTO Nathan Myhrvold that specializes in
purchasing and creating patents and then licensing them to other
companies. While companies like Creative also accumulate masses of
patents and are free to sue
competitors infringe upon them, they are also vulnerable to countersuits
if their own products tread
on patented ground. Intellectual Ventures, on the other hand, is immune
to retribution because it makes no products of its own—it merely
licenses its patents companies that do.
As tech companies lobby the U.S. government to change patent
legislation, IV has raked in "3,000 to 5,000" patents, and its investors
include companies like Apple, Google, Intel, Microsoft, and Sony.
Microsoft, who paid up a whopping $40 million for rights to IV's
inventions, even claims IV is a "perfect example of a market
efficiency," and that it actually reduces lawsuits by "providing a venue
to buy and sell patents."