Intellectual Ventures

Definition

Intellectual Ventures is a private company that acquires and manages a large portfolio of patents, with the goal of monetizing those patents through licensing and other commercial activities. It operates as a patent assertion entity, leveraging its patent portfolio to generate revenue from companies that are accused of infringing on its patents.

5 Must Know Facts For Your Next Test

1. Intellectual Ventures was founded in 2000 by former Microsoft executives Nathan Myhrvold and Edward Jung, with the goal of creating a new model for patent monetization.
2. The company has acquired a vast portfolio of patents, estimated to be over 70,000, covering a wide range of technologies, including software, electronics, and biotechnology.
3. Intellectual Ventures has been criticized by some as a patent troll, as it has been known to aggressively assert its patents against companies, often targeting smaller businesses that may not have the resources to defend themselves.
4. The company's business model has been described as a 'patent tax' on innovation, as it generates revenue by licensing its patents to companies that may not have been involved in the original invention process.
5. Intellectual Ventures has been involved in numerous legal disputes over its patent assertions, with some companies accusing the company of extortion and anti-competitive behavior.

Review Questions

• Explain how Intellectual Ventures' business model relates to the decision to enforce a patent.
  • Intellectual Ventures' business model is centered around acquiring a vast portfolio of patents and then asserting those patents against companies that are alleged to be infringing on them. This model directly relates to the decision to enforce a patent, as Intellectual Ventures is highly incentivized to actively enforce its patents in order to generate licensing fees and settlements. The company's aggressive patent assertion tactics have led to criticism that it is engaging in abusive or anti-competitive behavior, which is an important consideration when deciding whether and how to enforce a patent.
• Analyze how Intellectual Ventures' status as a patent assertion entity (PAE) might influence the decision to enforce a patent.
  • As a patent assertion entity, Intellectual Ventures' primary goal is to monetize its patent portfolio through licensing and legal action, rather than to actively develop or commercialize the patented technologies. This focus on patent monetization can lead to a more aggressive approach to patent enforcement, as Intellectual Ventures may be more willing to pursue legal action against alleged infringers in order to extract licensing fees or settlements. Additionally, the company's large patent portfolio and significant financial resources can give it an advantage in patent enforcement battles, potentially influencing a patent holder's decision to enforce their patents against alleged infringers.
• Evaluate the potential impact of Intellectual Ventures' patent assertion activities on innovation and competition within the industries in which it operates.
  • Intellectual Ventures' patent assertion activities have been criticized for potentially stifling innovation and competition. By aggressively asserting its patents against companies, Intellectual Ventures may be creating a 'patent tax' on innovation, as companies are forced to divert resources towards licensing fees or legal battles, rather than investing in research and development. This can make it more difficult for smaller companies or new entrants to compete, as they may not have the resources to defend against patent assertions. Additionally, Intellectual Ventures' focus on patent monetization, rather than the commercialization of new technologies, may limit the overall pace of innovation within the industries it operates in. This raises important considerations about the balance between patent enforcement and the promotion of a healthy, competitive marketplace.

Related terms

Patent Assertion Entity (PAE): A company that acquires patents, often from inventors or other patent holders, with the primary goal of asserting those patents against alleged infringers in order to generate revenue through licensing fees or legal settlements.

Patent Licensing:

The process of granting permission to use a patented invention in exchange for a fee or royalty payment, often as a way for patent holders to monetize their intellectual property.

Patent Troll:

A derogatory term used to describe a patent assertion entity that is perceived as using aggressive or abusive tactics to extract licensing fees or settlements from companies, often targeting small businesses or end-users.