Bill Gates and Patent Trolls

The ongoing toxicity of the patent system is continuing, and Bill Gates, a man who actively campaigned against tech patenting in the early 90s, is one of the many who is building a repertoire of unused patents. The folks at Ars Technica have uncovered much of Gates' work with prolific patent trolls, Intellectual Ventures. This report highlights Gates' ongoing work with Intellectual Ventures to continue to secure patents, particularly with the company's co-founder, Nathan Myhrvold.

Whilst it cannot be ascertained at this point whether or not Gates is getting involved in the patent trolling game, what is certain is that so far he has 93 patents with IV, a company which has traditionally used patents to file lawsuits and earn vast sums of money purely from suing others. Generally, working with IV to invent new products is a pretty bad idea. However, Gates' reasoning quite probably lies in the fact that Myrhvold is an ex-business associate at Microsoft.

Nathan Myrhvold, co-founder of IV

Nathan Myrhvold, co-founder of IV

Many Silicon Valley based companies, blogs and news sources have referred to IV as the single biggest patent troll in existence. IV consistently defends itself against these claims, describing itself as a hub for invention. However, as with the recent Xbox One debacle, there comes a point where no PR team, no matter the quality of personnel or quantity of budget available, can hide the true intentions of a company. IV has so far not brought a single patent into commercial use. Similarly, IV has been known to use shell companies to further their standing and build their patent portfolio. To learn more about IV's practices, TechDirt's feed on the company is filled with instances of their history and behaviours. This American Life's damning indictment on Intellectual Ventures reveals the story of Chris Crawford's patent for essentially the concept of backing up data online. The patent was used in attempts to sue numerous companies, causing many to pay off IV to leave them alone. Whilst patent trolls are becoming ubiquitous, with the industry being huge, Intellectual Ventures has proved itself to be at the peak of it all.

In a nutshell, IV is a company that not only exists because of litigation and lawsuits – it thrives on them, and has effectively built a business that promotes its ability to capitalise on them.

For those unclear on the concept of patent trolling and the ongoing debate, let me attempt to shed some light on this complex and controversial topic. The patent system crumbles and is effectively broken when transferred to digital media and software. Much of the law is based on archaic systems, and was only effective when it was first written into the US constitution. This was a time before digital, when inventors could be protected by law, and thus feel safe to display their inventions and blueprints.

When it comes to software, we've entered a world which thrives off of rapid innovation. The latest digital tool today is outdated rapidly and replaced, sometimes in a matter of weeks. At this point, rather than continue to innovate, the easy option is to rely on those out-dated patent laws and sue the guys who've overtaken you.

What's more disturbing though is the requirements for a patent. Unlike in those traditional days of Edison, Tesla, et al when invention was a process of building, blueprinting, redesigning and rebuilding until something worked and the patent could be filed, these days with digital inventions one only needs to essentially prove that an idea is buildable, file a patent, and then (under current laws) they can enjoy 20 years of attempting to shakedown anyone who breaches that patent in any single way. It's like if I decided I could find the means to build a robotic cat which could then be controlled with an iPhone. I could then go ahead and patent said idea for a robotic cat, along with the ability to remote control it using an iPhone. I could then sit on that for 20 years, attempting to sue anyone who actually bothered to try and make a robotic cat, probably anyone who made a robotic entity of any description, and while I'm at it have a bash at threatening any company working around remote access via iPhone. I don't need to develop a single product to fit that patent, and the more vague and ambiguous the language of the patent, the more people and companies that I can threaten.

Robot cat finds your iPhone - nightmare scenario

Robot cat finds your iPhone - nightmare scenario

Of course, this will never happen because a) I don't have anywhere near the size or clout of IV b) I'm not a **** (insert your favourite expletive referencing IV here) and c) someone's probably patented these exact ideas already... in fact, hundreds, maybe thousands already have. Remote access via mobile devices? Without checking, it's almost guaranteed to have been patented several thousand times over. But this brings me to another problem with patenting in tech products: tech is complicated, the law doesn't always know what it's talking about. As mentioned, vague wording can fool anyone into misunderstanding subtle differences between inventions. Ideas remain the same, but the way they're done does not. Unfortunately, this is often difficult for those outside of Silicon Valley to grasp. The aforementioned Chris Crawford example, about online back-ups, was still being used to threaten companies up to just a few years ago, despite originally being filed in the early 1990s. A 20 year patent term represents 3-5 paradigm shifts in the technology industry, as well as many other major developments between those. Think about the difference between technology now, and only five years ago. Chris Crawford's online back up system is leagues behind modern cloud systems.

And a final point before we return to Bill Gates – technology start ups thrive on previous inventions. In this industry, revolution generates evolution. The latest and greatest tech start ups are often amalgamations of previously executed ideas, polished up and given a slight twist on the trusted formula. Imagine a world where every online community had been threatened into non-existence by Geocities back in 1995. Or perhaps a world in which an alternative version of Bill Gates had aggressively patented aspects of the Windows operating system GUI which are now common to all systems. Or maybe a world in which the likes of Vint Cerf and Tim Berners-Lee would set their lawyers on you the second you decided to host a website or share a file from your home computer. All of this is merely conjecture, but it illustrates how far technology can develop with companies being allowed to work with a rival's idea and evolve, develop and innovate on it. The US constitution claims that patents exist to “promote the progress of science and useful arts” - this reasoning is in direct conflict with their use in the tech industry now, and the rampant patent trolling.

How True Icon would look if we'd made it in Geocities. I don't miss the 1990s.

How True Icon would look if we'd made it in Geocities. I don't miss the 1990s.

So, where does this leave us? Patent laws are a constant topic of debate, yet at this stage there is little sign of reform occurring, despite a clearly broken system and a smothered business arena. Many are attempting to change the system, but so far with little success. Minor political parties and pressure groups seem to be the primary agents pushing for change. Australia's Pirate Party provides one such possible fix to the problem (regardless of whether you agree with their wider views):

  • They aim to reduce the overall patent period to 5 years
  • Increase the cost of obtaining a patent (reasoning that inventors will only then patent an idea that will be worthwhile)
  • But the idea with the most validity is that litigation can only be carried out if the patent is leading to a developed product. If a company or individual is not using their patent to develop a product, then they have no rights to undertake legal action.

Gates' current project is called “Global Good” - he regularly brainstorms ideas such as malaria and the energy crisis with Myrhvold, develops ideas, and patents them. IV will not build any of these, claiming that building commercially viable products is not their business objective (although it's questionable as to whether they avoid this aspect of business for fear of being hounded by patent lawsuits themselves).

At this point it's important not to point the finger at Gates and cast blame. Firstly, he's not actively attempted to sue or threaten any others based on the patents he's developed with Myrhvold. Secondly, Bill Gates, despite his history of being a ruthless businessman in the early 90s, has proven to be dedicated in supporting positive causes, and it's likely that anyone willing to undertake the development of the products and tech would receive a wealth of knowledge and support from Gates, rather than be crushed under the patent licensing fees. If one man has enough money to build a startup for every single one of the 93 patents he holds with IV, it's Bill Gates.

Nevertheless, the situation certainly warrants further examination. Just because we shouldn't blame, doesn't mean we shouldn't monitor Gates' activities with IV and question his motives. It'll be interesting to see how Gates and IV act upon being approached by a delivery company for any of these patents. Until this happens, it's pretty tough to tell whether Gates' intentions are noble or not. IV, however, certainly has a lot to answer for already. Could this be a divisive factor between Gates and Myrhvold, or has Gates truly been dragged down to IV's levels as many speculators suggest?


Brighton, United Kingdom