Intellectual Ventures: Hated company, great business model

Summary:Intellectual Ventures is one complicated enterprise and may highlight everything that is wrong with the patent system. However, it has one helluva business model.

You can't mention Intellectual Ventures, the patent arbitrage company (troll to some), without generating some extreme reaction in the tech industry. Maybe we should just get over the fact none of us thought of Intellectual Ventures first.

CNET News went behind the scenes on Intellectual Ventures and the takeaways boil down to this:

  • Intellectual Ventures has some fun patents.
  • It'll sue anyone and everyone.
  • The company's patent portfolio is massive.
  • There's ample debate on just how evil Intellectual Ventures is or isn't.
  • Nathan Myhrvold, armed with a windfall in Microsoft shares, saw the patent game developing and built a business model around it before others could.

My bottom line boils down to a Jonathan Schwartz, CEO of CareZone, and his take:

"Nathan Myhrvold is a very, very, very smart man. He may be the wealthiest man on Earth when all is said and done. Congratulations on arbitraging the patent system."

Now you can debate whether Intellectual Ventures slows up innovation. You can also debate whether the company has tech's best interest at heart. There's also a good argument that Intellectual Ventures highlights what's wrong with the patent system.

intellectualventuresmodel

In the end, Intellectual Ventures is as complicated Myhrvold's billionaire tastes.

The one thing we all can agree on though is that Intellectual Ventures has one sweet business model.

Topics: Patents, Enterprise Software, Tech Industry

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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