{"id":367535,"date":"2010-02-26T17:10:22","date_gmt":"2010-02-26T22:10:22","guid":{"rendered":"http:\/\/www.theatlantic.com\/business\/archive\/2010\/02\/a-new-way-to-buy-and-sell-ideas\/36742\/"},"modified":"2010-02-26T17:10:22","modified_gmt":"2010-02-26T22:10:22","slug":"a-new-way-to-buy-and-sell-ideas","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/367535","title":{"rendered":"A New Way to Buy and Sell Ideas"},"content":{"rendered":"

Nathan Myhrvold’s company Intellectual Ventures is trying to create a capital market<\/a> for patents, inventions and intellectual property, one that would use the venture capital and private equity markets as a model. Is Myhrvold’s brave new world of investment firms trading the rights to a better mousetrap feasible, or even ethical?<\/p>\n

Intellectual Ventures — most recently seen unveiling a mosquito death ray<\/a> at
\nthe TED conference — already owns more than 30,000 patents. Its
\neclectic approach matches the diverse interests of its founder, whom the
\nNew York Times called “the ultimate polymath”:<\/a><\/p>\n

“He earned his Ph.D. in physics from Princeton and did postdoctorate research on quantum field theory under Stephen Hawking<\/a>, before founding a start-up that Microsoft acquired.<\/p>\n

“He
\nis an accomplished French chef, who has also won a national barbecue
\ncontest in Tennessee. He is an avid wildlife photographer, and he has
\ndabbled in paleontology, working on research projects digging for
\ndinosaur remains in the Rockies.”<\/p><\/blockquote>\n

Setting aside Myhrvold’s
\ncolorful pedigree, his company’s approach has long drawn fire, with
\ncritics dubbing it “Intellectual Vultures.”<\/p>\n

Amar Bhid\u00e9, author of The Venturesome Economy, is a high profile critic<\/a> of
\nMyhrvold’s vision. Invention, to him, is akin to writing a book: what if authors had to buy licensing rights for
\nevery idea they cited, instead of simply giving credit in the footnotes? Many
\nof the best new products, he argues, are combinations of countless ideas, some
\npatentable, some not.
 
A patent attorney writing under the pseudonym “Sawyer” laments<\/a>:
 <\/p>\n

“Mr.
\nMyhrvold wants to create an entire economic category based on payments
\nto entities that don’t build, produce, sell, etc, any products, or
\ncreate anything of value (i.e., that don’t innovate, at least in any
\nuseful way that advances human progress), in exchange for not being
\nsued on exclusionary patent rights.”<\/p><\/blockquote>\n

In the software patent
\nworld, shell entities (often called “patent trolls”) backed by
\ninvestment funds already bring dozens of lawsuits against innovators
\neach year. They target start-ups as well as technology giants like
\nGoogle, Apple, and Microsoft, hoping to win money in battles over IP.
\nSawyer writes:
 <\/p>\n

“What we have, then, is a net outflow, on a
\nyearly basis, of at least several hundred million dollars, from
\ntechnology companies who “make stuff” and unquestionably innovate, to
\nspeculators and investors who don’t.”<\/p><\/blockquote>\n

Strictly speaking,
\nIntellectual Ventures is not a patent troll, because litigation does
\nnot form the core of its business model. It also employs an army of
\nengineers and scientists, who create inventions of their own.
 
But recent divestitures<\/a> by
\nthe company show that at the very least it will happily do business
\nwith firms that engage in trolling behavior. Last year, for example, an
\nIntellectual Ventures shell sold a patent to holding company Picture
\nFrame Innovations LLC, which immediately turned around and asserted the
\npatent against Hewlett-Packard, Kodak, and CDW Corp. Many are afraid
\nthat Intellectual Ventures’s efforts to create a pervasive “invention
\ncapital” market could cause this sort of vampirism and trolling to
\nexpand beyond the domain of software IP and stymie innovation in all
\nsectors.<\/p>\n

Myhrvold <\/strong><\/span><\/span>assures us<\/a>
\nthe exact opposite will occur: that his system will create a
\nvigorous market in IP rights and solve an epidemic of under-invention. Myhrvold confidently predicts that
\ncompetition between investment funds to buy intellectual property from
\ninventors, bundle it, and sell it to buyers who know how to exploit it
\nwill support increased output from innovators. But in his effort to
\nencourage invention, he might be single-handedly facilitating the unholy
\ngenesis of a huge new class of parasitic middlemen.


\n

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\n\"\"<\/a>
\n\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

Nathan Myhrvold’s company Intellectual Ventures is trying to create a capital market for patents, inventions and intellectual property, one that would use the venture capital and private equity markets as a model. Is Myhrvold’s brave new world of investment firms trading the rights to a better mousetrap feasible, or even ethical? Intellectual Ventures — most recently seen […]<\/p>\n","protected":false},"author":4591,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-367535","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/367535","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4591"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=367535"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/367535\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=367535"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=367535"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=367535"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}