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Is Intellectual Ventures making a big move to snare Apple as a licensee? UPDATED

So what do you do if you want to persuade a big company with deep pockets and a strong interest in freedom to operate in the mobile communications space to agree a licensing deal with you? Well, one idea is to sue a few of its developers for patent infringement in the Eastern District of Texas. Over at the Edible Apple and Wireless Goodness blogs this is what they believe Intellectual Ventures may currently be doing. I don't know if it's true or not, but the detective work undertaken to support such a  conclusion is impressve and quite persuasive. Let's not forget that IV has shown itself to be very willing to use patent privateers in the past and also let's remember that IV has already done big licensing deals with other major players in this space, including Samsung and HTC, and most recently RIM.  Up to now Apple is reported to have resisted IV's approaches. That may soon have to change. And what a huge scalp for IV it would be.

UPDATE - Lodsys, the NPE that contacted the Apple developers, has put a Q&A piece up on its blog about what it is doing. Among the questions is: [I]s Intellectual Ventures behind Lodsys or controlling Lodsys in some way? And the answer is: 

Starting in 1988, Dan Abelow invented, put in significant amounts of his time, and paid hundreds of thousands of dollars in patent filing, prosecution lawyer fees, and maintenance fees to the US Patent Office to create the patent portfolio.

Sixteen years after his effort began, in 2004, Dan Abelow sold his patent portfolio to Intellectual Ventures.

Intellectual Ventures then licensed these patents to additional companies.

Intellectual Ventures sold all the rights (minus the already licensed) to the Abelow portfolio to a private rights ownership group, which then setup independent companies, with sufficient capital and talented staff to focus on licensing the patent rights broadly to the marketplace. Neither Dan Abelow nor Intellectual Ventures has any investment, control, or knowledge of the specific licensing activities, including who is licensed (except for what is publicly disclosed, or happened on licensing activity prior to Lodsys).

Dan does have a consulting agreement to work with Lodsys on matters pertaining to the Lodsys patents. This agreement is for a fixed fee, and if that fee is exceeded, then he is paid a consulting day rate. Dan has no direct economic interests in the patent licensing activity. 

While that does not rule out the possibility that IV may get a financial kickback from any deal that is done with either Apple of the developers themselves, it does seem pretty unequivocal in stating that IV is not directing operations. Tom Ewing of Avancept, who probably knows more about IV than anyone who does not actually work for the firm (and, I guess, many that do), commented on the original blog above. It's worth reading what he wrote:

The NPE market raises some interesting questions about transparency of ownership in IPRs. Hiding ownership was not an issue that came up much before Henry Yuen at Gemstar (and others) in the late 1990s began boasting that important chunks of the company's portfolio were hidden and could never be found until the company was ready to use them in an infringement lawsuit.

The patent system is transparent in terms of what has been patented but has the potential for being completely intransparent with respect to ownership. One can debate whether this is a good thing or bad thing. (The Puritan mind might be inclined to say that one should review all 2.7 million active US patents and settle up with any problematic ones and that ownership transparency simply allows one to more easily tell who is likely to bite them.)

There is a web of Webvention companies. Webvention LLC acquired its patents by merger with Ferrara Ethereal, LLC back in 2009, which was a fairly well known IV shell company. Webvention LLC and Webvention Licensing LLC were both established in Texas on the same day. There is also a Webvention Holdings in Delaware, which has been mentioned in the Texas filings.

The Webvention documents in Texas were signed by Kurt Olender who also signed the power of attorney documents for Lodsys at the USPTO. Interestingly, the power of attorney shifts the cases away from the Sterne, Kessler firm, which has done a lot of work for IV, to Lawrence Aaronson, a sole practitioner in Atlanta who may have previously worked for the Fish and Richardson firm.

Apart from the Olender's name, the merger documents mention the name Philip Vachon. This could presumably be “any” Philip Vachon, but the one who comes to mind is the president of Liberate Technologies who also purchased Interstate Bakeries (Hostess cupcakes).

It’s not a stretch to imagine that IV anticipates that whoever licenses Webvention’s tiny portfolio might be persuaded to license a similar but vastly larger group of related patents that it controls, and one could imagine that IV is getting some return from the Webvention operation – but it’s also fairly easy to picture that other investors are involved as well. Otherwise, the web of Webvision companies would not really be necessary, especially since Ferrara Ethereal itself existed in a web of IV shells. 

So, to return to the original question posed by this blog - "Is Intellectual Ventures making a big move to snare Apple as a licensee?" - on balance I think the answer is probably No. Or, more accurately, it is not using the Lodsys actions to do so, although it may benefit financially from any deal that is eventually done.  

 


Joff Wild
IAM Magazine
15 May 2011

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