Ever had a leaky ceiling? You can place a bucket under it and delay the inevitable, but ultimately the steady dripping is going to take its toll and that bucket is going to overflow. Eventually, the ceiling may even collapse.

The latest drip in the unraveling of secretive Intellectual Ventures came last week in the form of a Wall Street Journal article. Writer Don Clark pokes holes in Nathan Myhrvold’s claims that his “invention company” makes no profits from patent infringement lawsuits:

“[IV VP of Licensing Don] Merino says some such deals have a ‘back end.’ In other words, his firm can receive some revenue generated by the company that buys its patents, whether through a lawsuit or some other means. But IV does not control what the buyer does with them.”

IV has long bragged of its record of never having filed a patent infringement lawsuit. However, these WSJ revelations suggest that they are achieving the same end product – revenue – by licensing patents to NPEs more than willing to sue. They are simply going through the back door.

Indeed, this is not the first article to note IV’s propensity to sell patents to litigious NPEs. A recent Dow Jones article revealed that several IV shell companies licensed eight patents to two firms that happened to be headquartered in Marshall, TX—a place known for its high number of patent lawsuits.

A September Recorder article titled “Intellectual Ventures Takes Indirect Route to Court” opened the lid on IV having sold patents to a firm that used them to sue Kodak for infringement:

“With its new practice of selling off patents to third parties, litigation is much more likely. It’s similar to the ‘catch and release’ model used for some time by other patent-holding companies. That’s a friendly sounding name for a threat that goes like this: Take a license because we’re going to sell the patent on the open market—and you never know what unscrupulous and lawsuit-prone troll is going to buy it.”

As the steady drip continues, one can only wonder how long the infamous IV machine can sustain its image of benevolence.

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