I enjoyed Levitt & Dubner’s “Freakonomics”, and picked up the followup “Superfreakonomis” recently at an airport. The last chapter, however, was astonishing. The entire chapter was devoted to a glowing advertisement for Intellectual Ventures, pointing out that they own 20,000 patents “more than all but a few dozen companies in the world”, but of course “there is little hard evidence” that they are patent trolls.
But this bunch of wacky genius billionaires have solved global warming (much of which they dispute anyway) and can control malaria and prevent hurricanes from forming. Unlike the rest of the book which covers analysis of well-known facts and disputes them with insightful economic research, this chapter is so breathless and gushy that it makes me question the rest of the author’s work.
I first came across Intellectual Ventures when The Economist reversed their 100-year opposition to patents, and the only reason I could find was a similarly cheerleading piece about this company. (I had naively expected new research revealing some net positive of patents, or some such revelation).
Side note: when a respected information source covers something where you have on-the-ground experience, the result is often to make you wonder how much fecal matter you’ve swallowed in areas outside your own expertise.
So, what is IV actually doing? Buying up loads of patents and licensing them to companies who calculate it’s not worth the fight is patent trolling 101. Yet the scale they’re operating on puts them on new ground, and opens new opportunities. It seems obvious to get corporate investors on board by promising them immunity from patent claims. With enough patents you stop trying to license them one-by-one and just tax each industry at some non-negotiable rate. No doubt they have more tricks I haven’t even thought of, but these potential devices really do make them a new breed of Super Trolls.
Their efforts to actually attain their own patents could simply be more of the same, but it’s also a relatively cheap but clever PR exercise (as shown by their media treatment). This will help them when (legislative?) efforts are made to shut down patent trolls. I’m fairly confident that they’ll simply license rather than implement anything themselves; actually producing things requires much more work, and simply exposes you to others’ patents.
Without diving deeply into this, they seem to understand two things clearly:
- They learnt from Microsoft that government-enforced monopolies are worth billions. Microsoft had copyright on software, this is patents.
- Development is getting much cheaper, while patents are getting more valuable. Cheaper development is shown clearly by free software, open hardware and hackerspaces. Patent value increases as more of the world becomes a more profitable and enforceable patent target.
Now, I don’t really care if one company leeches off the others. But if they want to tax software, they have to attack free software otherwise people will switch to avoid their patent licensing costs. And if you don’t believe some useful pieces of free software could be effectively banned due to patent violations, you don’t think on the same scale as these guys.