How Valuable Is Your Patent, Really?
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Factory of the Future?
Factory of the Future? Microsoft alum Nathan Myhrvold runs a firm that doesn't make anything, but it's hoarding the key to a new business age: intellectual property By Brad Stone Newsweek Nov. 22, 2004 issue - The offices of the highly secretive Seattle-area start-up, Intellectual Ventures, are filled with evidence of the multiple hobbies of its polymath founder, Nathan Myhrvold. The multimillionaire former chief technologist at Microsoft is a scientist, so there's a collection of antique microscopes in his office. He is a photographer, so striking pictures of nature adorn all the walls. He is an avid writer, so antique typewriters line the hallway. And since he is also a paleontologist, the full-scale head of a T. rex lords it over the lobby. It's actually a replica of the model used in the second "Jurassic Park" Robbie McClaran for Newsweek film. 'Wild and crazy' guy: Myhrvold The dino's ferociously bared teeth hint at elements of Intellectual Ventures' bold business plan. Myhrvold and his partner, former Microsoft chief software architect Edward Jung, have created the quintessential company for the 21st century. It doesn't actually make anything: it outsources, offshores and offloads nearly every task performed by regular corporations. It has no factories, machine shops or marketing teams. Only patent attorneys populate the quiet hallways. The five-year-old firm's plan is to create or buy new ideas, accumulate patents—exclusive rights to use the inventions—and rent those ideas to companies that need them to do the gritty work of producing real products. -
Some Facts of High-Tech Patenting
Some Facts of High-Tech Patenting Michael Webb Nick Short Nicholas Bloom Josh Lerner Working Paper 19-014 Some Facts of High-Tech Patenting Michael Webb Nick Short Stanford University Harvard Kennedy School Nicholas Bloom Josh Lerner Stanford University Harvard Business School Working Paper 19-014 Copyright © 2018 by Michael Webb, Nick Short, Nicholas Bloom, and Josh Lerner Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author. Some Facts of High-Tech Patenting Michael Webb, Nick Short, Nicholas Bloom, and Josh Lerner NBER Working Paper No. 24793 July 2018 JEL No. L86,O34 ABSTRACT Patenting in software, cloud computing, and artificial intelligence has grown rapidly in recent years. Such patents are acquired primarily by large US technology firms such as IBM, Microsoft, Google, and HP, as well as by Japanese multinationals such as Sony, Canon, and Fujitsu. Chinese patenting in the US is small but growing rapidly, and world-leading for drone technology. Patenting in machine learning has seen exponential growth since 2010, although patenting in neural networks saw a strong burst of activity in the 1990s that has only recently been surpassed. In all technological fields, the number of patents per inventor has declined near-monotonically, except for large increases in inventor productivity in software and semiconductors in the late 1990s. In most high-tech fields, Japan is the only country outside the US with significant US patenting activity; however, whereas Japan played an important role in the burst of neural network patenting in the 1990s, it has not been involved in the current acceleration. -
THE DEFENSIVE PATENT PLAYBOOK James M
THE DEFENSIVE PATENT PLAYBOOK James M. Rice† Billionaire entrepreneur Naveen Jain wrote that “[s]uccess doesn’t necessarily come from breakthrough innovation but from flawless execution. A great strategy alone won’t win a game or a battle; the win comes from basic blocking and tackling.”1 Companies with innovative ideas must execute patent strategies effectively to navigate the current patent landscape. But in order to develop a defensive strategy, practitioners must appreciate the development of the defensive patent playbook. Article 1, Section 8, Clause 8 of the U.S. Constitution grants Congress the power to “promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”2 Congress attempts to promote technological progress by granting patent rights to inventors. Under the utilitarian theory of patent law, patent rights create economic incentives for inventors by providing exclusivity in exchange for public disclosure of technology.3 The exclusive right to make, use, import, and sell a technology incentivizes innovation by enabling inventors to recoup the costs of development and secure profits in the market.4 Despite the conventional theory, in the 1980s and early 1990s, numerous technology companies viewed patents as unnecessary and chose not to file for patents.5 In 1990, Microsoft had seven utility patents.6 Cisco © 2015 James M. Rice. † J.D. Candidate, 2016, University of California, Berkeley, School of Law. 1. Naveen Jain, 10 Secrets of Becoming a Successful Entrepreneur, INC. (Aug. 13, 2012), http://www.inc.com/naveen-jain/10-secrets-of-becoming-a-successful- entrepreneur.html. -
P106 - Word Count: 2,818
Brian Schnack ([email protected]) Garrett Thompson ([email protected]) Group: P106 - Word Count: 2,818 Patents and Technology The patent system was designed to promote intellectual innovation and to protect inventions from being stolen, allowing small companies to thrive if their ideas are new and innovative. The founding fathers thought it was so important to “promote the Progress of Science and useful Arts” that they wrote it directly into the U.S. Constitution (US Constitution, 8). However in recent years, with patents on programming algorithms and different electronic components, the patent system has started to inhibit innovation. The current methodology of the US patent system does not promote intellectual inventions in software and technology, but instead allows companies to abuse the patent system. Companies misuse the patent system to make money through lawsuits rather than innovation, hurting businesses and ultimately the consumer. Slowly, through the judicial court, things are beginning to shape up but the United States is still a long way away from a patent system that actually does promote intellectual innovation. One large company that uses the broken patent system to their advantage is Intellectual Ventures, a company that attempts to help small time inventors protect their intellectual property by buying their patents, a move they call investing in their inventions. Unfortunately, this is not how it usually plays out, and Intellectual Ventures ends up selling patents to companies who attempt to make money purely by suing other companies who are infringing on the patents that they just bought. Many companies that Intellectual Ventures sells patents to are not even companies, but individuals pretending to be a company who will then use those patents to sue actual companies to make quick and easy money. -
Patents & Legal Expenditures
Patents & Legal Expenditures Christopher J. Ryan, Jr. & Brian L. Frye* I. INTRODUCTION ................................................................................................ 577 A. A Brief History of University Patents ................................................. 578 B. The Origin of University Patents ........................................................ 578 C. University Patenting as a Function of Patent Policy Incentives ........ 580 D. The Business of University Patenting and Technology Transfer ....... 581 E. Trends in Patent Litigation ................................................................. 584 II. DATA AND ANALYSIS .................................................................................... 588 III. CONCLUSION ................................................................................................. 591 I. INTRODUCTION Universities are engines of innovation. To encourage further innovation, the federal government and charitable foundations give universities grants in order to enable university researchers to produce the inventions and discoveries that will continue to fuel our knowledge economy. Among other things, the Bayh-Dole Act of 1980 was supposed to encourage additional innovation by enabling universities to patent inventions and discoveries produced using federal funds and to license those patents to private companies, rather than turning their patent rights over to the government. The Bayh-Dole Act unquestionably encouraged universities to patent inventions and license their patents. -
Managing Intellectual Property Using Patent Pools: LESSONS from THREE GENERATIONS of POOLS in the OPTICAL DISC INDUSTRY
Managing Intellectual Property Using Patent Pools: LESSONS FROM THREE GENERATIONS OF POOLS IN THE OPTICAL DISC INDUSTRY Simon den Uijl Rudi Bekkers Henk J. de Vries For modern technologies, access to intellectual property rights (IPR) is complex because it is fragmented among many owners. The required licensing agreements invoke considerable transaction costs and royalty stacking. Often, it is in the interest of the technology sponsor to ease access to the required IPR. Patent pools have proven useful to achieve this goal. This article examines the experiences with three generations of patent pools in the optical disc industry. Technology platforms are becoming increasingly complex, which leads to a fragmentation of IPR among many pools and causes new issues. A novel “pool-of-pools” can address these. (Keywords: Patents, Intellectual Property, Licensing, Standardization, Technological Innovation, New Product Management, Disruptive Technology) he development of consumer electronics, telecommunications, com- puters, and related high-tech industries is defined by a myriad of tech- nologies. Increasingly, these technologies involve numerous blocking patents owned by multiple patent owners. A recent example is the competitionT between three prominent smartphone operating systems: iOS, Android, and Windows Mobile.1 The companies that developed these operating systems use patents to make the other platforms more expensive and spread uncertainty among app developers. When a technological field develops through the contributions of many entities, negotiating the number of requisite patent licenses may become inefficient and too costly for users. To solve this issue, which is inevitable for any area where many parties invest in research and development, companies increasingly employ a patent pool licensing model. -
Intellectual Ventures Comments
INTELLECTUAL VENTURES" July 3, 2018 By Mail & Email ([email protected]) The Honorable Andrew lancu Under Secretary of Commerce for Intellectual Property Director of the United States Patent and Trademark Office United States Patent & Trademark Office Mail Stop Patent Board P.O. Box 1450 Alexandria, VA 22313-1450 Attention Vice Chief Administrative Patent Judges Michael Tierney or Jacqueline Wright Bonilla, PTAB Notice of Proposed Rulemaking 2018. Dear Under Secretary lancu: Intellectual Ventures Management LLC ("Intellectual Ventures") thanks the Director for the opportunity to present its views on the United States Patent & Trademark Office ("Office") Notice of Proposed Rulemak ing entitled "Changes to the Claim Construction Standard for Interpreting Claims in Trial Proceedings Be fore the Patent Trial and Appeal Board" as published in the May 9, 2018 issue of the Federal Register, 83 Fed. Reg. 21,221 ("Notice"). Intellectual Ventures urges the Office to adopt the rules proposed in the Notice. About Intellectual Ventures Intellectual Ventures fosters conception, development, and investment in inventions. It was co-founded by Dr. Nathan Myhrvold, who is also its Chief Executive Officer. Dr. Myhrvold was previously the Chief Tech nology Officer of Microsoft, and he holds a doctorate in theoretical and mathematical physics and a mas ter's degree in mathematical economics from Princeton University, as well as a master's degree in geo physics and space physics and a bachelor's degree in mathematics from the University of California at Los Angeles. He was a postdoctoral fellow in the quantum physics laboratory of Dr. Stephen Hawking at Cambridge University. And he is a named inventor on hundreds of issued patents. -
Patent Pools and Innovation in the Optical Disk Drive Industry
A Tale of Two Standards: Patent Pools and Innovation in the Optical Disk Drive Industry Preliminary Draft Comments Only Please Kenneth Flamm University of Texas at Austin at Austin [email protected] December 2011 First Revision, January 2012 Patent pools—arrangements to issue single common licenses to a portfolio of patents owned by multiple distinct owners—became increasingly common in high tech industry in the final decade of the last century.1 The patent system enabling these pools sits at the intersection of two sometimes conflicting objectives of economic policy. On the one hand, societies typically encourage innovation by granting temporary monopolies (i.e., patents) on new technologies, as a dynamic incentive to induce investment in R&D, the outcome of which would otherwise be difficult to appropriate by an inventor. On the other hand, once technology has been created, it is statically optimal to make it available as widely as possible at its marginal cost of transfer, which is often close to zero, a price that would offer no return to an inventor and discourage new investment in innovation. There is a fundamental tension between these two divergent goals. Patent pools further complicate this tradeoff: while antitrust policy is generally focused on discouraging coordination among producers intended to improve the exercise of their collective monopoly power, patent pools explicitly encourage such coordinated action. Conceptual Issues With complex technological systems, which frequently are associated with formal or informal industry standards, it is common for patents owned by different firms to cover distinct elements used in building the high tech system or technology platform. -
The Effect of Patent Pools on Patenting and Innovation-Evidence
The Effect of Patent Pools on Patenting and Innovation - Evidence from Contemporary Technology Standards Justus Baron Northwestern University Searle Center on Law, Regulation and Economic Growth Tim Pohlmann Mines ParisTech Cerna - Center for Industrial Economics February 2, 2015 Abstract We analyze the effect of patent pools on the incentives to file patents related to a comprehensive sample of Information and Communication Technology (ICT) stan- dards. We measure a positive effect of the announcement of a pool on the filing rates for standard-related patents. We identify an exogenous policy change between 1997 and 1999, when antitrust authorities adopted a more permissive stance towards pooling of patents. An important number of pools were created in the wake or in response to this policy change. Studying these pools, we find a significant increase in patenting rates after pool announcement. This increase in patenting is primarily attributable to future members of the pool, as confirmed by Instrumental Variable regressions using firm-level characteristics associated with a higher likelihood of joining a patent pool. Pool creations taking place in later years could be more easily anticipated. Indeed, we find that the announcements of later pools is preceded by unusually high levels of patenting. Furthermore, we show that pool announcements with a higher likelihood of successful pool creation are followed by a stronger increase in patenting. We find no significant effect of patent pool announcements on the number of citation-weighted patent files. JEL-Classification: L24, O34 Kewords: Patent Pools, Technology Standards, Patent Licensing, Innovation incen- tives 1 Introduction Complex Information and Communication Technologies (ICT), and in particular technology standards, are often protected by a large number of complementary patents. -
The Opinion in Support of the Decision Being Entered Today Was
[email protected] Paper No. 18 571-272-7822 Entered: July 23, 2018 UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ EBAY INC. and PAYPAL, INC., Petitioner, v. XPRT VENTURES, LLC, Patent Owner. ____________ Case CBM2017-00027 Patent 7,483,856 B2 ____________ Before JAMESON LEE, KEVIN F. TURNER, and MICHAEL R. ZECHER, Administrative Patent Judges. ZECHER, Administrative Patent Judge. FINAL WRITTEN DECISION Covered Business Method Patent Review 35 U.S.C. § 328(a) and 37 C.F.R. § 42.73 CBM2017-00027 Patent 7,483,856 B2 I. INTRODUCTION eBay Inc. and PayPal, Inc. (collectively, “Petitioner”), filed a Petition requesting a review under the transitional program for covered business method patents of claims 1, 5, 6, 8, 34, 35, 45, and 48 (“challenged claims”) of U.S. Patent No. 7,483,856 B2 (Ex. 1001, “’856 patent”). Paper 1 (“Pet.”). Patent Owner, XPRT Ventures, LLC (“Patent Owner”), did not file a Preliminary Response. We preliminarily determined that the information presented in the Petition established that the ’856 patent qualifies as a covered business method patent that is eligible for review, and that it was more likely than not that the challenged claims are unpatentable under 35 U.S.C. § 101. Paper 8. Pursuant to 35 U.S.C. § 324 and § 18(a) of the Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125 Stat. 284, 329–31 (2011), we instituted a covered business method patent review as to all of the challenged claims. Id. Patent Owner filed a Response to the Petition (Paper 13 (“PO Resp.”)), and Petitioner filed a Reply (Paper 14 (“Pet. -
CPI Antitrust Chronicle January 2015 (2)
CPI Antitrust Chronicle January 2015 (2) Intellectual Ventures v. Capital One: Can Antitrust Law and Economics Get Us Past the Trolls? Michelle D. Miller (WilmerHale) & Janusz A. Ordover (New York University) www.competitionpolicyinternational.com Competition Policy International, Inc. 2015© Copying, reprinting, or distributing this article is forbidden by anyone other than the publisher or author. CPI Antitrust Chronicle January 2015 (2) Intellectual Ventures v. Capital One: Can Antitrust Law and Economics Get Us Past the Trolls? Michelle D. Miller & Janusz A. Ordover1 I. INTRODUCTION Patent trolls are currently under intense scrutiny by lawmakers, regulators, academics, and industry players. The term “patent troll” generally refers to patent owners that do not make or sell products, and instead focus on licensing and litigation to monetize their acquired patents. These entities are also known as “patent assertion entities” (PAEs)2, and in this paper, we use the terms interchangeably. Infringement suits brought by trolls have exploded over the last few years—in 2012 patent trolls accounted for 62 percent of all patent infringement suits,3 and recent studies estimate that trolls imposed direct costs of $29 billion in 2011.4 And these costs appear to be deterring investment in new businesses and technologies—one study estimated that venture capital funding was $8.1 billion lower over a five-year period than it would have been without PAE enforcement.5 Although most commentators have concluded that many patent troll business models lead to market inefficiencies, it is not clear what can be done in the short term to address the wide variety of concerns that troll activities raise.6 Various legislative solutions have been suggested 1 Michelle Miller is a partner in the Antitrust and Competition Group of WilmerHale. -
Survey of Patent Pools Demonstrates Variety of Purposes and Management Structures
Survey of Patent Pools Demonstrates Variety of Purposes and Management Structures KEI Research Note 2007:6 David Serafino1 Knowledge Ecology International 4 June 2007 Table of Contents Introduction ........................................................................................................................................... 2 Early pools associated with monopolies and cartels (1856-1919)..................................................... 3 Sewing Machine Combination – 1856 ............................................................................................ 3 National Harrow Company - 1890 .................................................................................................. 4 United Shoe Machinery Company - 1899....................................................................................... 5 Motion Picture Patents Company (MPPC) - 1908 ......................................................................... 5 Association of Sanitary Enameled Ware Manufacturers (Standard Sanitary) - 1909.................. 6 Standard Oil Cracking Pool - 1911 ................................................................................................. 7 Association of Licensed Automobile Manufacturers (ALAM) - 1903 ......................................... 8 Davenport folding beds - 1916 ........................................................................................................ 9 Glass Container Association of America (Hartford-Empire) – 1919............................................ 9 National