Controversy
Intellectual Ventures' purchased patents have largely been kept secret, though press releases with Telcordia and Transmeta indicated some or all of their patent portfolios were sold to the company. Investigative journalism suggests that the company makes most of its income from lawsuits and licensing of already-existing inventions, rather than from its own innovation. Intellectual Ventures has been described as a "patent troll" by Shane Robison, CTO of Hewlett Packard and others, allegedly accumulating patents not in order to develop products around them but with the goal to pressure large companies into paying licensing fees. Recent reports indicate that Verizon and Cisco made payments of $200 million to $400 million for investment and access to the Intellectual Ventures portfolio.
On December 8, 2010, in its 10th year of operations, Intellectual Ventures filed its first lawsuit, accusing Check Point, McAfee, Symantec, Trend Micro, Elpida, Hynix, Altera, Lattice and Microsemi of patent infringement. The company has also been accused of hiding behind shell companies for earlier lawsuits, an accusation consistent with the findings of NPR's Planet Money in July 2011. The episode, which also aired as "When Patents Attack" of This American Life, was dedicated to software patents, prominently featuring Intellectual Ventures. It includes sources accusing Intellectual Ventures of pursuing a strategy encouraging mutually assured destruction, including Chris Sacca calling Nathan Myhrvold's argument that Intellectual Ventures is offering protection from lawsuits a "mafia style shakedown".
Intellectual Ventures staff are active in lobbying and testifying in court on United States patent policy. It reports its purchasing activity as of spring 2010 has sent $350 million to individual inventors and $848 million to small and medium size enterprises as well as returning "approximately $1 billion" to investors before filing any lawsuits. In March 2009 Intellectual Ventures announced expansion into China, India, Japan, Korea and Singapore to build partnerships with prominent scientists and institutions in Asia to create and market inventions.
While the company claims to assist independent inventors, one finding claims that they have been unable to note a single case of aid they have provided to a single independent inventor. The practice of legally prosecuting infringement of patents that are not used by the company to produce goods or services has been referred to as "patent trolling" by investigative journalists and industrialists.
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