Tuesday, October 29, 2013

Patent Troll, Nathan Myhrvold's Intellectual Ventures, May Have Their Entire Business Model Upended in Court

From Reuters via peHUB:
Intellectual Ventures faces novel attack on patent business — Reuters
Seven years ago, Intellectual Ventures bought a patent on technology that helps detect malicious software embedded in digital content. The price? $750,000.

Now Intellectual Ventures is arguing in a Delaware courtroom that Internet security firms Symantec and Trend Micro should pay roughly $310 million combined for a license to that patent through the end of last year.

Intellectual Ventures, a multi-billion-dollar firm that virtually invented a new market for patents and inventions, says that figure represents fair compensation given how extensively Symantec and Trend Micro products rely on the technology.

Symantec and Trend Micro are fighting back – and advancing a novel legal theory that could pose a significant threat to the business model of Intellectual Ventures (IV) and other patent acquisition firms.

The two companies are asking a federal judge to bar IV from seeking such large licensing fees on the grounds that a patent acquired for so little couldn’t possibly be worth so much. That’s on top of more traditional arguments that Symantec and Trend Micro do not violate IV’s patents in the first place.
In court filings and at a hearing in August, Symantec and Trend Micro lawyers argued that the law prohibits IV from calculating such a high royalty. A patent license is, by definition, less valuable than outright ownership of a patent, Symantec and Trend Micro lawyers said.

“They have turned that thing into a diamond,” Trend Micro lawyer Yar Chaikovsky said at the hearing.
Representatives of Intellectual Ventures, Symantec and Trend Micro all declined to comment on the case....MORE