Nathan Myhrvold was chief technology officer of Microsoft, but since 2000 has been building a portfolio of inventions (patents) at Intellectual Ventures. He's also a talented chef, photographer, and paleontologist. He was interviewed Wednesday at D6 by Walt Mossberg.
Mossberg dived into the controversy around Myhrvold's venture, which has been called an institutionalized "patent troll." Myhrvold says, "We invest in ideas, not the realization of it." He says, "We recruit inventors before they have an invention."
"And then you own it?" Mossberg asks. "Yes, but we pay the inventor."
The company, started in 2003, works on a process that takes four to five years before it has ideas that can be protected. "A lot of (the ideas) are 10 years out." The company files 500 patents a year, and has filed 1,700 in total. Only about 50 have been granted so far, he said, but as of yet none of the patents is realized in products.
Example projects include a "new kind of nuclear reactor." Myhrvold says, "We need an affordable source of carbon-free energy," and, "Maybe this is the first time that a little company could rethink nuclear power. Dramatically."
How does it work? Myhrvold believes his company's technology can run without operators, with spent fuel from current reactors and depleted uranium. "We have a wonderful containment vessel already: a Dell blade server. You really want to simulate the hell out of this stuff first."
"We're swinging for the fences," he said.
There's another part of the business, similar to the private equity model. "There are lots of inventions that people have that the owner doesn't know what the hell to do with."
It's buying patents, Mossberg said. Myhrvold agreed, but of course disputed the "patent troll" appellation. "I challenge the notion that there's something wrong with having an investable asset," he said. "We're closing the loop of capital."
Mossberg pressed Myhrvold on the issue, trying to get Myhrvold to admit that his company is happy to litigate for patent damages. Myhrvold: "There's nothing wrong with trying to get a reasonable return" on patents. Yet, he says, there are many ways to monetize patents. "We've never sent a litigation notice to anyone, and we've never filed a suit." He did not rule out the possibility in the future, however.
"Thomas Edison's business model was very similar to ours," he said. What's different, he said, is that he thinks there's a new model, called "invention capital," that's similar to venture capital in that "you create an algorithmic way that people can get funded."
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