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Intellectual Ventures, IP, IP Asset, Patent

Intellectual Ventures Proves There Are No Mechanized Patent Owners

As reported by my colleagues at Patent Calls, Intellectual Ventures sued Hynix and Elpida (again) on July 11, along with 9 of their customers for allegedly infringing 5 (more) of its patents.  At issue are four patents previously owned by Cirrus Logic, which also was the previous owner of patents in IV’s first round of litigation back in December, according to IAM Magazine’s Joff WildThe Patent Calls article includes some more interesting history of the newly asserted patents and their former owner’s penchant for dealing IP, but more importantly, this week’s move shows more of IV’s “human” side, forcing it back toward respecting “the rule” rather than playing the exception.

In Rocky IV, there’s a point during Balboa’s climactic fight with Ivan Drago where the Russian starts bleeding after a particularly well-landed right cross. During the intermission, the trainer Duke encourages Balboa by showing him that, since Drago was cut, that he’s a man, not a machine (and therefore vulnerable). The Rocky IV analogy is convenient since another IV (Intellectual Ventures) has recently been exposed to be as vulnerable as any patent owner on the face of the earth.

Peter Detkin and Nathan Myhrvold set out to create a patent licensing machine, armed with tens of thousands of patents and billions in funding, the pair brazenly set out to license the world to its inventions without relying on litigation. Myrvold publicly “scoffed” when asked if IV would use its patents in litigation, and explained that litigation was a “failure” and “disastrous” as a way of monetizing patents.  The world scoffed back when IV launched its first suits in its own name last year–a tacit admission that it too “failed” to license key parties without resorting to litigation.

However, IV was outshined a few months later when a research firm holding only a few hundred patents launched the IP version of a shock-and-awe licensing campaign by simultaneously suing over 100 companies in a single day.  While this is a move that one might expect from a firm holding more than 30,000 patents, IV’s own patent litigation looked paltry by comparison.

Now it seems that IV has learned yet another lesson critical to successfully enforcing IP rights (which parents of a 5-10 year old also know as the first rule of fighting dragons): always, always, go for the kill.  IV’s new ITC actions and Washington District Court lawsuits against Hynix and Elpida are proof that IV was holding back when it first sued the pair in Delaware last year.  The best explanation for IV’s behavior may be that, once again, it thought it was special. IV thought it was different, and that the normal rules didn’t apply. Foolishly, could the company have been convinced that these stubborn infringers, who wouldn’t deal in the absence of litigation, would suddenly roll over when faced with anything less than the patent owner’s best effort?

There’s a number of key differences between this week’s lawsuit that indicate a more enlightened approach from IV.  First, the dual ITC/District Court actions show fearlessness and commitment.  Second, the forum is both puzzling and frustrating to IV’s opponents.  Filing in Washington might seem perplexing at first, since this is the same court that just split Paul Allen’s single, multi-party patent suit into several individual lawsuits.  However, IV is far more likely to get its multi-party case to stick since the vast majority of the defendants likely sell infringing components made by both of the main two targets, demonstrating a high degree of commonality.  Third, the inclusion of numerous Elpida and Hynix customers shows the intestinal fortitude to aggressively pressure their true targets.

Of course, the pessimistic reaction to all of this is the realization that if IV needs to aggressively use litigation to generate value from its patents, then surely no one else stands a chance.  Clearly, others like Walker Digital and IPNav recognized this months ago, opting for the aggressive approach while lamenting the need for it.


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