I was absolutely glued to the radio today as I listened to the latest episode of This American Life in which Planet Money’s Alex Blumberg and NPR’s Laura Sydell report on the complex underworld of high-tech patents. The investigative piece — titled When Patents Attack — is among the most comprehensive looks at the controversial business dealings of Intellectual Ventures.
The Bellevue firm, founded by former Microsoft CTO Nathan Myhrvold, certainly doesn’t come across in a positive light. And much of the criticism of the firm — which is described in the piece as a “troll on steroids” — comes via Silicon Valley venture capitalist Chris Sacca.
The attorney and former Google executive slams Intellectual Ventures, noting that the patent holding company has the power to “literally obliterate startups.”
Later in the story, Sacca claims that Intellectual Ventures’ model is one built around one that amounts to extortion.
He tells the reporters that IV essentially engages in “a mafia-style shakedown, where someone comes in the front door of your building and says, ‘It would be a shame if this place burnt down. I know the neighborhood really well and I can make sure that doesn’t happen.’ ”
Peter Detkin, who coined the term “patent troll” and now works for Intellectual Ventures, called Sacca’s suggestions “ridiculous and offensive.”
“We’re a disruptive company that’s providing a way for patent-holders to recognize value that wasn’t available before we came on the scene, and we are making a big impact on the market. That obviously makes people uncomfortable. But no amount of name-calling changes the fact that ideas have value.”
The hour-long piece covers a lot of ground, tracking the whereabouts of a patent once-owned by Intellectual Ventures and now tied to a mysterious entity by the name of Oasis Research. It is a fascinating journey which includes an NPR-loving attorney who refuses to talk and an unoccupied office in the town of Marshall, Texas.
At the end of the piece, there’s no conclusion left to draw but that the U.S. patent system is fundamentally broken.
We’ve asked Intellectual Ventures for a comment about the story, and we’ll update this report when we hear back from them.