Intellectual Ventures: Hated company, great business model

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.

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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

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2 comments
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  • A good thing

    A great business model indeed. And I would add it plays a social role as well. By concentrating so many patents in a company that does not produce anything and sues productive companies, it symbolizes what is wrong in the patent system and undermines the idea that patent laws, in their current form, foster innovation and competition.

    So thank you Mr Myhrvold for pushing the system to the absurd and educating us.
    nuijel
  • Not So Sure It's So Successful

    Apparently the return to investors hasn't quite lived up to the promise.

    Maybe you do actually have to produce something useful to make money, after all.
    ldo17