Friday, September 16, 2011

Intellectual Ventures LLC Sues Canon over Imaging Patents

PriorSmart.com: Intellectual Ventures LLC. (IV for short) sues Canon over infringement of imaging patents it has acquired from different companies. 4 out of 9 patents mentioned in the lawsuit are directly related to image sensors. Two of them were originally granted to Motorola, one - to Hynix and one CCD patent - to LG Semi (Hynix acquired LG Semiconductor in 1999, so it was bought from Hynix probably). The patents are:

6,023,081: “Semiconductor image sensor” by Drowley et. al. and assigned to Motorola, Inc. Filed 11/14/1997 & Granted 2/8/2000.

6,221,686: “Method of making a semiconductor image sensor” by Drowley et. al. and assigned to Motorola, Inc.. Filed 1/28/2000 & Granted 4/24/2001.

6,979,587: “Image sensor and method for fabricating the same” by Lee and assigned to Hynix Semiconductor Inc. Filed 12/30/2002 & Granted 12/27/2005.

5,844,264: “Charge-coupled device image sensor” by Shinji and assigned to LG Semicon Co., Ltd. Filed 9/19/1995 & Granted 12/1/1998.

IV founder and CEO Nathan Myhrvold used to be Microsoft's CTO and chief strategist. In the lawsuit docs IV says it has purchased more that 35,000 intellectual assets and paid more than $400M to individual inventors. IV, in its turn, has earned more than $2B by licensing these patents to other companies. IV also claims to develop its own inventions, has a staff of scientists and engineers and collaborates with research institutions around the world.

An opposite view on IV and its business is presented in This American Life podcast. "NPR reporter Laura Sydell and This American Life producer/Planet Money co-host Alex Blumberg tell the story of Intellectual Ventures, which is accused of being the largest of the patent trolls. The investigation takes them to a small town in Texas, where they find a hallway full of empty companies with no employees."

Thanks to EF for sending me the link!

23 comments:

  1. they can sue all the CIS Fabs...

    ReplyDelete
  2. These guys are the really bandit and parasite of our society. Shame on them!

    ReplyDelete
  3. They are getting this in before the new patent law goes into affect. This is being seen in other segments as well.

    ReplyDelete
  4. I thought this was important to share in our community. I really have an issue with no-value-added trolls especially when the patents are secondary or tertiary, at best. As someone mentioned to me, you cannot pay 5% royalty to 25 different companies.

    ReplyDelete
  5. Could you pay 5% to 20 different companies? :-)

    ReplyDelete
  6. some kind of subprime... it's pitty to see such kind of parasite patent holding! Do as Chineses, ignore completly this kind of claims.

    ReplyDelete
  7. Apologies for spamming - I need to get in touch with Vladimir Koifman and his blog email seems to be inactive.
    Vladimir, please send your working email to yuri.rzhanov@unh.edu

    ReplyDelete
  8. Yuri,

    The email in my blog profile has been working all the time.

    ReplyDelete
  9. I don't think it's as simple as putting a bandit, parasite, or troll label on Intellectual Ventures.

    Here's a complete list of Intellectual Ventures' institutional investors:

    Adobe, Amazon.com, American Express, Apple, Cisco Systems, Detelle Relay KG, eBay, Google, Microsoft, Nokia, Nvidia, OC Applications Research, SAP, Sony Corp., TR Technologies, Verizon, Xilinx, Yahoo;

    Brown University, Cornell University, Grinnell College, Mayo Clinic, Northwestern University, Stanford University, University of Minnesota, University of Pennsylvania, University of Southern California, University of Texas;

    Allen SBH, Bush Foundation, Charles River Ventures, Commonfund Capital Venture Partners, Dore Capital, Flag Capital, Flora Family Foundation, Hewlett Foundation, Howard Hughes Medical Institute, Legacy Ventures, McKinsey and Co., Next Generation Partners, Noregin Assets, Reading Hospital, Rockefeller Foundation, Roldan Block NY, Seqouia Holdings, Skillman Foundation, Sohn Partners, Taichi Holdings, TIFF Private Equity, and White Plaza Group.

    When you are claiming that Intellectual Ventures is "the really bandit and parasite of our society" you are essentially also claiming that Sony Corp., Stanford University, and the Flora Family Foundation are as well.

    I don't agree with you, but I also don't disagree.

    For me the common thread in this white-glove list of top-tier technology companies, non-profits, venture capital firms, etc. is that they have a lot of money and want to make more (as much as they can!) without having to actually do the productive work themselves. However, anybody who saves a little money and buys a share of stock, a bar of gold, or an apartment building hoping for dividends, selling at a higher price, or rent revenues with little or no work is doing more or less the same thing as Intellectual Ventures.

    As for Canon and other target companies, I don't see them as "the good guys" necessarily.

    If they planned ahead well, they invested in tracking and assessing all relevant applications and patents as they were published and issued, so they have a database of internal expert opinions on whether their products infringed. They can tap this to defend, and additionally can show re-design they did to avoid infringement and any proactive contacts with rights owners to negotiate terms.

    Alternatively, they may have decided it was too expensive to conduct this due diligence on an on-going basis. They could rely on small entities being unable to discover infringement and afford to sue, and they could rely on larger peer companies being deterred from suing by the threat of a counter-suit for infringement. This is cheap until there's a large entity that doesn't worry about a counter-suit for infringement. Like Intellectual Ventures.

    If I were on a civil jury, I would view the planned-ahead-well case in a favorable light. Rigorous due diligence and good-faith outreach would signal "the good guys". On the other hand, I would look unfavorably at companies that didn't bother to do due diligence until after they'd been sued, even if it's by a non-producer that is popularly disliked.

    ReplyDelete
  10. Ugh. Intellectual Vultures is the worst. They don't actually produce anything, so they can sue those who do with impunity.

    Try looking at the ridiculous claims they pursue in their or their multitude of shell corporations' patent applications. Total hogwash. These guys aren't out to innovate, they just want to camp some combination of technical features that they think somebody will likely someday use so that they can sue the pants off of them.

    This is of course just my opinion.

    Here's a claim I selected more or less at random. Tell me CDM, does this sound like your idea of innovation?

    81. A computationally-implemented system, comprising: means for detecting one or more occurrences of one or more specific patterns of usage of one or more non-communication (NC) productivity applications by one or more end users; and means for providing to the one or more end users, in response to said detecting, access to one or more particular messages through one or more channels of one or more NC productivity application interfaces, the one or more NC productivity application interfaces for accessing the one or more NC productivity applications by the one or more end users.

    Ugh. Gross.

    ReplyDelete
  11. CDM - have you listened to the full hour of NPR podcast? You should, before defending IV. Any company engaged in legitimate activity as you describe would not need 3,000+ shell companies to hide their activity. Anyway, please listen to the podcast. It is an hour long.

    ReplyDelete
  12. @ "Ugh. Intellectual Vultures is the worst. They don't actually produce anything, so they can sue those who do with impunity."

    I don't like the company's business model from a moral standpoint, but I do think it is brilliant. By not producing anything it completely avoids the primary defense of almost every technology company. And, the technology companies that are investor-owners don't have to take responsibilitiy. They can even publicly claim they felt forced to participate by the very threat of the lawsuits that are generating their investment returns. It's brilliant.

    @ "Try looking at the ridiculous claims they pursue in their or their multitude of shell corporations' patent applications. Total hogwash. These guys aren't out to innovate, they just want to camp some combination of technical features that they think somebody will likely someday use so that they can sue the pants off of them."

    In my experience, the same can be said of most patent material from companies that are out to innovate.

    @ ""Here's a claim I selected more or less at random. Tell me CDM, does this sound like your idea of innovation?"

    It does not sound like innovation. It does read like a routine claim per my comment just above. And there's nothing really threatening about it because it's easy to knock down. An automated teller machine with an earphone jack for blind customers includes all the elements recited in the claim. Where do I send the invoice for my billable hour of legal services? :D

    ReplyDelete
  13. @ "have you listened to the full hour of NPR"

    Yes, when it was originally broadcast on WBEZ

    @ "Any company engaged in legitimate activity as you describe would not need 3,000+ shell companies to hide their activity."

    Just to clarify, for me there is a difference between moral legitimacy and legal legitimacy. I do not think that what Intellectual Ventures is doing is morally right. However, I am not aware of anything it is doing being against the law. And, I am not inclined to think that just because a company is being sued by Intellectual Ventures, it is some kind of helpless, innocent victim.

    Companies - and people - create and destroy corporate legal entities all the time for a variety of purposes. A classic example is tax avoidance. The state of Delaware has a cottage industry hosting company headquarters because it doesn't tax corporate income earned out of state. If you are a company or individual with sufficient resources, incorporating in Delaware is a perfectly legal way to reduce the taxes you pay. On the other hand, very small businesses like my local plumber and ordinary individuals usually can't afford to play this game, so they pay higher taxes in the state where they actually do business. And, their taxes are proportionately higher because of the shelter enjoyed by much richer entities.

    Canon is a wealthy company. Intellectual Ventures is a wealthy company. They'll figure something out. It will probably not be the disaster that befell the French knights at Agincourt, who felt that elite armored cavalry should be fighting elite armored calvary, not commoners with bows.

    ReplyDelete
  14. CDM - you are correct, I believe their activity is brilliant, legally legitimate, and very difficult to defend against. I have to give them great credit for this. Rather than "legitimate" I should have used "above board".
    On the other hand, just because it is brilliant and unanticipated by legal code does not mean we should give them a free pass. There are many activities that are created by brilliant people to take advantage of the law that are eventually outlawed for the common good. I believe this is yet another example of that. I just hope the government gets its act together in restricting this sort of business practice. It is a shakedown practice, clear and simple, despite all the protests to the contrary. Surely you see through that. The fact that many companies and universities have signed up for the protection and enrichment scheme does not elevate it to a socially acceptable practice. I believe Bernie Madoff, for example, had a long list of outstanding and upstanding clients.

    ReplyDelete
  15. Regarding the IV news, today Digitimes published its new agreement, not in image sensors though:

    "Wistron and Intellectual Ventures (IV) have announced that they entered into a license agreement. The deal provides Wistron with access to IV's patent portfolio of more than 35,000 IP assets, and also provides Wistron membership in IV's IP-for-Defense program.

    As patent infringement claims increase in the technology sector, companies often find themselves in need of defensive strategies. For customers accused of patent infringement by their competitors, IV's IP-for-Defense program provides them with the ability to obtain patents from IV's portfolio to support counter-assertions, enabling more efficient negotiations in order to reduce liabilities and achieve favorable licensing terms, the companies said.
    "

    ReplyDelete
  16. Forgot to post the link:

    http://www.digitimes.com/news/a20110922PR203.html

    ReplyDelete
  17. @ "Surely you see through that."

    Yes.

    @ "I just hope the government gets its act together in restricting this sort of business practice."

    So do I. It is, however, a challenging problem, so there might not be the ability or will to act.

    @ "As...said."

    This is a really interesting statement. I need to think about it some more before posting a follow-up comment.

    ReplyDelete
  18. @CDM "As...said". Paying for protection is an ancient tradition, starting perhaps in Sicily. Another old game is paying one group for protection against a secretly allied group (e.g. shell company). Sort of like racketeering, without the crime.

    ReplyDelete
  19. There is a company named RPX corp, which is established by Intellectual Venture's former VP, is helping business to get rid of annoying lawsuits, of course, charging a good fee.

    ReplyDelete
  20. Hopefully some of you have an rss feed for new comments, or will read this when it shows up in Vladimir's 5-most-recent-comments section.

    Intellectual Ventures' self-description above is really quite elegant. Everything in it makes them look like the good guys.

    Notwithstanding, I still have the impression that the company's main business model is exploitative. For me, that's not good, though in general it's a matter of
    perspective.

    I have a pretty simple suggested remedy: attach permanent liability to patent owners.

    In particular, it seems that most patent creation takes place at companies and universities who otherwise are responsible. The patents cover technologies the creators would like to license out or put into products themselves. This is basically the intended use of patents and is constructive, in my opinion.

    The problem comes when a patent is sold, and all the rights and obligations pass to new owners. The patent creator is no longer responsible for how the patent is used, and it can get in the hands of a non-producer to be used in a coercive manner.

    With permanent liability, the onus is on the patent creators not to transfer patents.

    ReplyDelete
  21. CDM,
    I don't think you understand IV's business model. It is not to defend IP/patents. It is to force (extortion) companies into buying into a protection racket via their portfolio which they then license to companies needing protection. The ITC is starting to narrow the scope of acceptability of these types of companies by following the trail of ownership and not ruling in favor of companies not able to prove "domestic Industry" at two levels. 1: are you currently operating within this industry, actually wanting to defend your IP because you want to build upon it in the future..and 2: do you show a history of defending your IP in past circumstances.

    ReplyDelete
  22. I'm not sure it's that simple. Looking at IV recent news, it has signed "partnership" with Canadian McMaster University about two weeks ago:

    http://www.intellectualventures.com/newsroom/pressreleases/11-09-27/McMaster_University_and_Intellectual_Ventures_Partner_on_New_Inventions.aspx

    and a patent umbrella agreement with Pantech yesterday:

    http://www.intellectualventures.com/newsroom/pressreleases/11-10-12/Pantech_Licenses_Patents_from_Intellectual_Ventures.aspx

    The university deal looks quite legitimate to me, while the Pantech one looks like protection that you talk about. They both blended together in IV business model.

    ReplyDelete
  23. Now they're going after Nikon: http://www.techflash.com/seattle/2011/10/intellectual-ventures-sues-nikon.html

    I'd really like to avoid giving IV or any company that caves in to the 'licensing' deals any money (which may soon mean I can't buy a camera), but I'm not sure all that extortion is publicized.

    ReplyDelete

All comments are moderated to avoid spam.