Attack of the Patent Proxies
Published 12:23, 09 September 09
Here's a strange to-do:
Open Invention Network (OIN), a collaborative enterprise that enables innovation in open source, today announced the acquisition of 22 Linux-focused patents that were marketed and sold by Microsoft. The patents were recently purchased by Allied Security Trust (AST) from Microsoft to ensure the patents did not fall into the hands of non-practicing entities (more information on non-practicing entities is available at http://en.wikipedia.org/wiki/Patent_troll, among other sites) that could seek to assert the patents against Linux products. OIN subsequently acquired the Microsoft patents from AST.
This is truly bizarre. Why would Microsoft unload a bunch of “Linux-focused patents” - stuff you would think it would fondle lovingly as it ruminated endlessly on the damage they might do in terms of FUD, if nothing else. But no, not only does Microsoft sell them, but they end up in positively the worse place possible, from Microsoft's point of view: a Linux-friendly bunch with the avowed aim of keeping such patents safely locked away.
There's an interesting hint of what was going on here:
In an interview, Bergelt said that his organization was not invited by Microsoft to directly participate in the bidding for the patents, raising the specter that Microsoft was more interested in selling to someone that might have targeted Linux as opposed to just maximizing the sales price for the patents.
This was something that Groklaw speculated about earlier:
OK. So you are Evil Microsoft and you decide it's too difficult and dangerous to sue Linux yourself. Antitrust annoyances, counterclaims, and PR and all that. What to do with that patent portfolio to really cause trouble for Linux, without having your fingerprints all over it?
Eureka! You could sell the patents to patent trolls, and let *them* be the bad guys. Is that not perfect if you are evil? Not that Microsoft would ever be evil. We all know there is a New Microsoft in the land.
But in our imagination, let's say that because that is your wicked plan as Microsoft Evil, you set up an auction without offering OIN or any Linux players a chance to bid. You only invite folks who don't have a product to sell, only entities that collect patents, or what is known as "non-practicing entities" a/k/a patent trolls, who are immune from counterclaims against their products, because they don't have any.
Would that not have been the perfection of evil? You are positively drooling. And who'd ever know it was evil you who was really behind it?
Perfection indeed. It's certainly a plausible explanation of what is otherwise very strange behaviour from Microsoft. What makes it particularly intriguing is that it seems that precisely the same approach is being adopted by Intellectual Ventures, a company set up by ex-Microsofties Nathan Myhrvold and Edward Jung, and funded by Microsoft among others. Its business model is to acquire huge numbers of patents, and then license them to companies. As this excellent post explains, it appears to be adopting a new strategy to “encourage” people to sign up:
Until recently, one of the few points Myhrvold could make in his own favor is that he hadn’t started suing firms that declined to license his patent portfolio. I say “until recently” because we’re now learning that the lawsuits have started. IV has begun selling off chunks of its patent portfolio to people like Raymond Niro with well-deserved reputations for being “patent trolls.” Threatening to sell patents to a third party who will sue you is more subtle than threatening to sue you directly, but the threat is just as potent. Myhrvold’s “sales pitch” to prospective licensees just got a lot more convincing.
Assuming the Groklaw theory is correct, this is eerily close to Microsoft's intent behind the recent patent sale - I do hope Microsoft paid the appropriate licensing fees to Intellectual Ventures for using its idea.
What's interesting about these two moves to work through proxies rather than directly is that they suggest a cautiousness on the part of those who use patents not to create but to threaten, and a reluctance to be seen suing companies that actually make something. Could it be that they are aware of a new wind blowing through the world of patents, and an increased sensitivity to their abuse by patent trolls who simply play the currently broken system?