Raymond P. Niro is patent litigator with tremendous experience and a reputation that is larger than life. To some he is a champion of independent inventors and small business community, frequent clients of his. To others he is nearly the definition of evil.
It is certainly true that Niro is responsible for the coining of the term “patent troll,” a term first used by a journalist writing about a case he filed on behalf of a client against Intel in 2001. But how is it possible to characterize as a bad actor when those he represents are so often victorious? If you ask me the bad actors are the ones who infringe on patent rights, not those who stand up to have their rights vindicated. But I digress.
Niro has been trial counsel in literally hundreds of intellectual property cases, and since 1996, has won verdicts and settlements for his clients totaling more than $1 billion. In 2006, for example, Niro tried 6% of all the patent cases that went to verdict and, in the first six months of 2007, recovered the 11th, 15th and 35th highest patent verdicts (highest as of 2007), each resulting in a finding of willful infringement, an injunction and cumulative damages of more than $100 million.
Earlier today Intellectual Ventures (IV) sued Motorola Mobility for patent infringement in the United States Federal District Court for the District of Delaware. At issue are six patents that IV claims relate to Google’s Android operating system — US Patent Nos. 7,810,144, 6,412,953, 7,409,450, 7,120,462, 6,557,054 and, 6,658,464.
This litigation is worth noting for several reasons. First, this is yet another patent infringement complaint against Google’s Android operating system. It seems that practically every month there is another lawsuit claiming that Android infringes this or that patent, which has to raise eyebrows with respect to the underlying intellectual property Google owns in its operating system that is intended to compete against Apple. Second, once upon a time Google funded IV and vouched for the company and its founder, Microsoft alumnus Nathan Myhrvold. Now IV has turned the tables on Google, is going after Android and in so doing is suing the company that Google is set to acquire for $12.5 billion.
News of Nathan Myhrvold’s Intellectual Ventures bringing a series of lawsuits should have displaced the above the fold headlines regarding the vague financial turmoil currently afflicting the U.S. and World Economy. Whereas one will pass, like kidney stones, with much watery eyed pain and gnashing of teeth, the other is far more insidious and potentially fatal to our collective future as a leading economy. Here’s why:
Just like in the story-line of Independence Day, where the alien death ships slowly but surely positioned themselves over each major city, with the eventual outcome well understood, so too is Intellectual Ventures (I.V.) slowly positioning itself as the patent overlord over many major industry segments. Just like in the movie, the eventual outcome is well understood. To wit: Complete usurpation of the U.S. Patent system. The outcome is a, gigantic tax/toll collector controlling the pulse of innovation in the U.S. or, like the movie, extermination of innovation.
Let’s be perfectly honest, the US patent system has stopped rewarding innovation and has started rewarding those who have the finances and ability to game the system. That is a huge problem and one that needs to be addressed far more quickly than any other problem facing us. I have been saying for years that the manufacturing jobs are not coming back and that we need to focus on those areas where we can grow jobs and the economy, and that space is the innovation space. Innovation is at the core of growth because discoveries lead to inventions which lead to new technologies which lead to the creation of new industry which leads to the creation of high paying jobs. A rising tide lifts all boats and the tide that is going to lift the US economy is the innovation tide, so we need to start focusing on that and putting in place an environment that will allow innovation to thrive. This of course means a functioning patent system that recognizes worthwhile inventions, but it also requires that we put a stop to patent trolling.
Recently I had the opportunity to chat with Dr. Gary Michelson, an Orthopedic Surgeon and celebrated inventor who holds over 900 patents worldwide. Dr. Michelson acquired both fame and fortune as the result of his innovations, which were infringed by Medtronic, and who later settled with Dr. Michelson for $1.35 billion. As many readers know, Dr. Michelson recently sent a letter to Congress, specifically addressed to Senator Patrick Leahy (D-VT) and Congressman John Conyers (D-MI), who chair the Senate and House Committees responsible for moving forward with patent reform efforts. Specifically, Dr. Michelson supports S. 515 and wanted to make sure that the Congress heard from an actual inventor who greatly benefited from the US patent system.
In my conversation with Dr. Michelson he explained to me that while he benefited greatly from the patent system he would have benefited even more if the system worked better. At this point Dr. Michelson “does not have a dog in the fight,” as he explained, because with the exception of a few lingering applications his patent portfolio has been fully acquired and he stands to gain no additional revenues. Nevertheless, Dr. Michelson, the quintessential successful American inventor, would like to see the US patent system improve for the benefit of all independent inventors, the American economy and to promote real job growth. He has some excellent ideas, I agree with his positions on almost every front, and it is with his approval that I put my conversation with him on the record.
Yesterday the 271 Patent Blog published an article titled Now it Begins? Litigation Rumors Surface Over Intellectual Ventures, which discusses how we may be starting to see the beginning of what might become an epic saga between good and evil. It seems that Intellectual Ventures, the patent absorbing company founded by former Microsoft executive Nathan Myhrvold, is starting to head where we all knew they eventually would, which is in the direction of turning to patent litigation against those who are unwilling to cave into their licensing demands. Peter Zura, the purveyor of the 271 Patent Blog details the rumors associated with how IV handles its patent licensing efforts. It seems that Intellectual Ventures sets a deadline to have a negotiated resolution. If the deadline passes then they sell the patent to the party who they feel can best monetize the patent, with a pay-back to IV in the end. As Zura explains: “IV has allegedly started to ‘outsource’ their patent litigation.” And can you guess who is associated with a current patent litigation where the patent can be traced back to IV ownership? None other than notorious patent troll litigator Ray Niro. You can just hear the Darth Vader music playing in the background, can’t you?
William H. Gates, III, of Redmond, Washington (US) is known to most throughout the world as Bill Gates, the genius behind Microsoft Corporation. Gates is presently the Chairman of Microsoft, having transitioned out of the day-to-day leadership role on June 27, 2008, a role that allows him an opportunity to spend more time on health and education work sponsored by the Bill & Melinda Gates Foundation. Prior to stepping away from the daily grind, however, Gates managed to find time on January 3, 2008, to file some five patent applications directed to methods and systems for altering the temperature of surface water. The goal of these inventions is to prevent or at least lessen the force of hurricanes, the fierce storms that form as a result of warm water (among other things) and gain strength from warm water. While there are many ideas and associated solutions in the various patent applications, the primary thrust of the patent application seems to be the churning of cold water from deep below the surface to mix with warmer surface water. The process is carried out by one or more vessels, and the hope is that using cold water from the depths of the sea hurricane intensity could be minimized, potentially saving millions (or billions) of dollars and lives.