The Prior Art

Is Intellectual Ventures revving up its lawsuit machine? Will we know when it does?

Today's Recorder has a story revealing that patent-holding giant Intellectual Ventures appears to be connected to a patent lawsuit recently filed in Chicago against Kodak and CDW Corp. Picture Frame Innovations, LLC v. Eastman Kodak Company et al., 09-cv-04888, N.D. Illinois. Intellectual Ventures was founded by former Microsoft CTO Nathan Myhrvold (pictured at right).

The Recorder reports that patent number 7,107,605, covering a digital picture frame, was originally filed by a small software company, but ended up being asserted by a small patent-holding company, Ez4media.

Since then, the patent has been moved through a holding company affiliated with Intellectual Ventures and then into Picture Frame Innovations, a shell company owned by James Beauregard Parker. Parker's company filed suit against Kodak and CDW on August 10. TPA readers may know Parker as someone who owns other holding companies, including some—such as BarTex Research and Illinois Computer Research—that have asserted Scott Harris patents.

An earlier Ez4media lawsuit against Apple, now settled, was briefly noted by TPA in January. (See bullet point midway down that post.) Both Ez4media and Picture Frame Innovations are represented by the Niro Scavone law firm.

Ray Niro says "IV is not involved in any way, shape, or form" in the Picture Frame Innovations lawsuit, but neither he nor IV will answer the key question: whether the patent-holding company has any financial interest in the litigation.

Intellectual Ventures Still Buying Patents: Q&A with the Purchaser-in-Chief

As The Prior Art recently reported, Ocean Tomo’s last San Francisco patent auction was a bust. Still, as was true last year, there was plenty of scuttlebutt about what role giant patent-holding company Intellectual Ventures (IV) might play at the event. TPA reported on some of that speculation, which prompted a note from Kevin Barhydt, director of IV's acquisition program.

Intellectual Ventures does not publicly talk about specific patent purchases or its licensing activity—a policy that was in full effect when TPA spoke with Barhydt last week. Despite the lack of specifics, Barhydt did have some interesting things to say about IV's acquisition program. Over the past several years, the company has acquired more than 20,000 patents. About 15 percent were purchased at auction, 20 percent were bought when sellers approached IV directly, and the rest were acquired via brokers representing sellers or agents representing IV.

Another note: in this interview, Barhydt uses the term 'asset' synonymously with patent, which might be confusing to some. The interview was edited and condensed.

Data from Stanford shows 2007 spike in patent defendants

Stanford Law School has unveiled its IP Litigation Clearinghouse, which includes data on 78,000  copyright, patent, trademark, and trade secret lawsuits. That includes 23,000 patent suits, and the patent data has just been made public. I can already tell this will be a great tool that I'll use a great deal, and I look forward to seeing what others come up with.

My colleague Zusha Elinson at the Recorder attended Stanford's event unveiling the IPLC. His article about the IPLC, published yesterday, is worth reading. Initial statistics show that there was indeed a real spike in the number of defendants sued in 2007; that spike may not be repeated in 2008. See graph below. This data generally confirms the estimate calculated by Rick Frenkel earlier this year. It also confirms the anecdotal evidence I reported in the IPLB 2008 Patent Litigation survey. Lemley attributes this spike to a rush by holding companies to file suit before any patent reform legislation took effect.

Stanford Law Professor Mark Lemley (pictured), who was a driving force behind the IPLC, also said he's teaming up with Intellectual Ventures founder Nathan Myhrvold in order to classify exactly who is filing all the patent infringement lawsuits. I'll be watching that project, which sounds like it could be like a Troll Tracker blog on steroids. Lemley and Myhrvold, it should be noted, have very different views about the patent-holding companies some deride as "patent trolls." Stanford's IPLC announcement has much more information about the project.

Polaris IP, suing Google, argues for wide-ranging discovery

On Friday, I wrote about how lawyers working for Polaris IP (Erich Spangenberg) want to use the discovery process in Polaris IP v. Google to learn more about Google's patent reform efforts. Google asked for a protective order; now Spangenberg's response is available. [PDF via Justia]

What's the relevance? Polaris lawyers want to know "Google’s views and efforts relative to the Accused Instrumentalities being able to use the patented technology of others without providing damages adequate to compensate for the infringement." The "Accused Instrumentalities" are the Google products Spangenberg believes he should be paid a royalty on: Google Search, AdWords, and AdSense.

If I hadn't recently watched a patent trial (almost) in its entirety, I think I'd have a hard time understanding what Polaris might be after. But now I can imagine the deposition clips that a skilled lawyer could get from this: "Do you really expect this jury to believe that Google respects patent rights? Isn't it true that Google doesn't want to pay when it uses other people's intellectual property? Didn't Google spend millions lobbying Congress to get the penalties for using other people's intellectual property reduced?" ... and so on.

"Patent Trolls" — with them or against them?

Folks are choosing sides—first Howrey LLP (against), and now a veteran IP executive (against). Hat tip to Joff WIld's IAM blog for this one.

Dan McCurdy's new company, PatentFreedom, is an online community for companies to get and share intelligence about the non-practicing entities some critics call “patent trolls.” Membership is limited to “operating companies” with over $100 million of revenue that’s not from licensing, enforcing, or selling patents or other intellectual property. (Such revenue sometimes comes from the sale of “products,” which can be found on the shelves of most stores not located in North Korea.)

“Patent trolls know a lot about operating companies,” McCurdy told me today. Their targets, conversely, frequently know nothing at all. “Are they the only company being approached, or one of a thousand? Who funds them? How well funded they are?”

PatentFreedom will fill that void both with its own research and by creating a community where operating companies can exchange information, anonymously, if they desire.

But in order to found the new company, McCurdy will have to split from ThinkFire, the company he co-founded with Intellectual Ventures chieftain Nathan Myhrvold in 2001. The reason? Worries about conflicts of interest.  ThinkFire has an IP consulting and brokerage practice, as well as a group that provides licensing and litigation support to companies asserting patents, many on a contingency basis. It also helps companies defend against patent-infringement claims, billing hourly, like a law firm.

Also like most big law firms, ThinkFire plays both patent offense and patent defense. But PatentFreedom’s "fight-them-trolls" business model was too much; shortly before the April 14 launch, ThinkFire’s board decided it couldn’t play both sides on this one, and decided it will spin off  PatentFreedom as a separate company. McCurdy will officially move over to PatentFreedom in July.

Says McCurdy: “ThinkFire made the decision that it was not in its clients’ best interest to constrain the kind of advice that ThinkFire might be able to give to them, simply to meet the needs of PatentFreedom.”

Fear of conflicts, and perhaps hope for a competitive edge, already caused law firm Howrey LLP to actually agitate against so-called “patent trolls,” like the one pictured above, in its ads, as The Recorder reported in March. (free reg. required)

While we talked, McCurdy tapped into his database from his home office in Pennsylvania, browsing through electronic dossiers on—get ready—94 non-practicing entities, 249 affiliates, and more than 4,700 patents they’re known to hold. (Way more than the shuttered Patent Troll Tracker!) But McCurdy says he has no grudge against NPE’s; he’d just rather beat ‘em than join ‘em.

“When I walk into a cocktail party, I feel much better about myself saying that what I do is help companies defend themselves against NPE’s, or ‘patent trolls,’ than saying ‘I attack companies with patents I bought,’” he says. “I’m not saying that NPE’s are wrong… they have every right to pursue what they’re pursuing.” But targeted companies deserve tools that “at least somewhat equalize the playing field.”

So far close to 10 companies have joined, all “household names,” says McCurdy, and all confidential. He expects up to 20 by the time he officially leaves ThinkFire in July, and 50 members by year’s end.

Annual membership starts at $50,000. (Might make you feel like a subscription to IP Law & Business is a real bargain.)