Who is the world's biggest patent troll?

Patent trolls come in all shapes and sizes, but until now I didn't think they taught in the classroom.

In two consecutive days, The Wall Street Journal presented two different answers. The first is not surprising: Intellectual Ventures, the brainchild of ex-Microsoft executive Nathan Myhrvold. It's now out "to raise as much as $1 billion to help develop and patent inventions, many of them from universities in Asia." I know I will sleep so much more comfortably knowing that IVL will be out plundering Asia so that it can turn around and plunder the rest of the planet.

The second might surprise you: the University of California. The University of California may be especially pernicious because it can sue for patent infringement but has sovereign immunity:

In the lucrative world of patents, the University of California is a major player. It receives by far more patents from the U.S. government than any school in the country. And by licensing out its intellectual property, the university has generated about $500 million in revenue in the past five years.

The school also aggressively uses the courts as a sword, and is unafraid to take on big companies. As a plaintiff alleging patent infringement, the school has settled a claim against Genentech Inc. for $200 million, secured a payment of $185 million from Monsanto Co., and won a $30 million settlement from Microsoft Corp.

Yet, when it comes to getting sued for patent infringement, the university, as well as the state of California, are Teflon. A legal doctrine known as sovereign immunity protects states and state institutions from legal liability. Courts have held that participating in the federal patent system doesn't cost a state its immunity. The upshot--states can sue, but effectively can't be sued.

A benevolent troll, perhaps, lovingly educating the nation's children. But one that wields a Teflon fist in a way that no patent holder should.

At least with IVL we know that it's just an avaricious troll, whatever Myhrvold may say to the contrary:

Some university officials--including those from Stanford and MIT--say they aren't working with (IVL) because they worry it could use its patents for litigation or other purposes that don't promote innovation (gasp!). Myhrvold says their concern is overblown, as his company has numerous deals to buy or license patents with more than 80 universities. He says his firm simply wants to get "fair compensation" for new inventions, and help inventors do the same, and that its goal has always been to create a more liquid IP market.

He truly is a child of Microsoft. The apple doesn't fall too far from the tree.

The University of California's patent trolling is worse, for the reasons noted above. It's an unfair advantage that should be abolished, as Stanford Law School professor Mark Lemley argues:

The underlying problem is that the Supreme Court is applying an antiquated doctrine--the 11th Amendment--to circumstances in which it was never intended to apply. The Framers never contemplated states suing people for patent infringement.

At least IVL doesn't hide behind state sovereignty, though it does hide behind specious arguments as to the good it brings humanity. Something is clearly wrong when a state can stripmine the IP landscape with impunity.

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About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.

     

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