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The Patent Shakedown

by on July 26, 2011

From Jeff Tucker. About Intellectual Ventures and other patent trolls.

This American Life talks about the amazing scam of patent enforcement – it is a perfect illustration of how this legal shakedown racket works.

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441:

When Patents Attack!

Originally aired 07.22.2011
Why would a company rent an office in a tiny town in East Texas, put a nameplate on the door, and leave it completely empty for a year? The answer involves a controversial billionaire physicist in Seattle, a 40 pound cookbook, and a war waging right now, all across the software and tech industries. (Transcript)
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We take you inside this war, and tell the fascinating story of how an idea enshrined in the US constitution to promote progress and innovation, is now being used to do the opposite.

Prologue.

There’s a derogatory term in Silicon Valley for companies that amass huge troves of patents and make money by threatening lawsuits: “patent trolls.” When Jeff Kelling’s Internet company Fototime was sued – along with more than 130 other companies – for violating someone’s patent, he wondered if it was a troll (which the company denies), and then settled out of court. (8 minutes)

Act One.

NPR reporter Laura Sydell and This American Life producer/Planet Money co-host Alex Blumberg tell the story of Intellectual Ventures, which is accused of being the largest of the patent trolls. The investigation takes them to a small town in Texas, where they find a hallway full of empty companies with no employees. (29 minutes)

Act Two.

Laura and Alex continue their story about Intellectual Ventures and the practice of patent trolling. They learn why the buying and selling of patents is likely to continue being a huge, controversial business that affects the entire tech industry. (23 minutes)Correction: The broadcast version of this story misidentified one of the winning bidders of Nortel’s patents as Nokia instead of Ericsson.

Song: “Modern Inventions”, The Submarines

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The Center for the Study of Innovative Freedom (C4SIF) is dedicated to building public awareness of the manner in which so-called “intellectual property” (IP) laws and policies impede innovation, creativity, communication, learning, knowledge, emulation, and information sharing. We are for property rights, free markets, competition, commerce, cooperation, and the voluntary sharing of knowledge, and oppose IP laws, which systematically impede or hamper innovation. IP law should be completely and immediately abolished.

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