Article by: Amol Sharma and Don Clark

Rick TabarBrandy WilsonBJ WolfgangNate Yenne

OverviewNathan Myhrvold

Founder of Intellectual Ventures

Intellectual Ventures controls patents

Patent- obtain the exclusive rights to (an invention, process, etc.) by a patent.

Overview cont.Companies pay fees to use these patents

Verizon is paying $350 million

Companies affected include: Intel, Google, eBay, VZW

Two outlooks: Myhrvold is a “troll” for controlling these

patentsMyhrvold’s business is necessary for balance

Nathan Myhrhold Founder of Intellectual Ventures

49yr old Ph.D. in mathematical physics

Paleontologist and extraterrestrial interest

Nathan Myhrhold cont.Former Chief Technology Officer for

Microsoft Top confidante to Bill Gates during his tenure

Studied under Steven Hawking

Acquired 20,000 patents

Has nearly 50 patents in his name

Intellectual VenturesCompany objective: to acquire patents for the

sole purpose of licensing them to others, without ever manufacturing a product

Founded in 2001, with initial business generated from early investments from major technology companies

Companies must pay a patent fee in order to continue producing their products

Intellectual Ventures“I can’t afford to sue you on all of these and

you can’t afford to defend on all of these.” –Mr. Myhrhold

Has never had to sue anyone for patent infringement

Patents obtained from universities, bankrupt companies and individual investors

ProsFavors small companies

“Early Bird Special”- companies that invested earlier paid less, on a per patent basis,

compared to other investors

Some “Early Birds” were Sony, Nokia, and Microsoft

ConsCompanies have to go through a third party

to use patents

“Implicit Threat” that if companies don’t agree to a licensing deal with Intellectual Ventures, they could face costly patent-infringement lawsuits

So You Think This Is Unethical?IBM and Texas Instruments are also buying

patents and selling them like he is

He is starting to feel pressure to produce profits

Google is pushing into new fields

Why So Secret?Mr. Myhrhold uses names like Quasimodo

Tolling LCC and Gigaloo LCC to disguise his patent-buying activities

For competitive reasons

Some of his investors are going to fight in Washington to curb his business model

ClosingLaunching new patent investment fund to

reach goal of $2.5 billion

Plans on signing up thousands of smaller companies as patent licensees for smaller amounts of money$5 to $10 million

Questions?