Article by: Amol Sharma and Don Clark
Rick TabarBrandy WilsonBJ WolfgangNate Yenne
OverviewNathan Myhrvold
Founder of Intellectual Ventures
Intellectual Ventures controls patents
Patent- obtain the exclusive rights to (an invention, process, etc.) by a patent.
Overview cont.Companies pay fees to use these patents
Verizon is paying $350 million
Companies affected include: Intel, Google, eBay, VZW
Two outlooks: Myhrvold is a “troll” for controlling these
patentsMyhrvold’s business is necessary for balance
Nathan Myhrhold Founder of Intellectual Ventures
49yr old Ph.D. in mathematical physics
Paleontologist and extraterrestrial interest
Nathan Myhrhold cont.Former Chief Technology Officer for
Microsoft Top confidante to Bill Gates during his tenure
Studied under Steven Hawking
Acquired 20,000 patents
Has nearly 50 patents in his name
Intellectual VenturesCompany objective: to acquire patents for the
sole purpose of licensing them to others, without ever manufacturing a product
Founded in 2001, with initial business generated from early investments from major technology companies
Companies must pay a patent fee in order to continue producing their products
Intellectual Ventures“I can’t afford to sue you on all of these and
you can’t afford to defend on all of these.” –Mr. Myhrhold
Has never had to sue anyone for patent infringement
Patents obtained from universities, bankrupt companies and individual investors
ProsFavors small companies
“Early Bird Special”- companies that invested earlier paid less, on a per patent basis,
compared to other investors
Some “Early Birds” were Sony, Nokia, and Microsoft
ConsCompanies have to go through a third party
to use patents
“Implicit Threat” that if companies don’t agree to a licensing deal with Intellectual Ventures, they could face costly patent-infringement lawsuits
So You Think This Is Unethical?IBM and Texas Instruments are also buying
patents and selling them like he is
He is starting to feel pressure to produce profits
Google is pushing into new fields
Why So Secret?Mr. Myhrhold uses names like Quasimodo
Tolling LCC and Gigaloo LCC to disguise his patent-buying activities
For competitive reasons
Some of his investors are going to fight in Washington to curb his business model
ClosingLaunching new patent investment fund to
reach goal of $2.5 billion
Plans on signing up thousands of smaller companies as patent licensees for smaller amounts of money$5 to $10 million
Questions?