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Ex-Microsoft CTO claims patent 'problem' is myth

Nathan Myhrvold, now CEO of a patent-licensing firm, says there's no reason to worry about the U.S. patent system.

ASPEN, Colo.--Not only have fears of a patent crisis been greatly exaggerated, but the U.S. patent system is functioning quite well, Microsoft's former chief technologist said Tuesday.

Nathan Myhrvold, now the chief executive of a start-up company that exists to create and license inventions, told a conference here that "before you get worked up about this gigantic problem, you ought to see what the facts are."

Patent litigation represents only 3 percent of federal lawsuits and there has been a steady decline in the number of lawsuits filed per patent, Myhrvold said. "Almost everything you have heard about patent litigation statistics is not true," he said. "Patents are the least litigious part of intellectual property law."

Myhrvold's company, Intellectual Ventures, is a kind of venture capital firm for ideas. It accumulates intellectual property in areas like communications, information technology and biotechnology, and then licenses the patents--meaning that its business model depends on robust patent laws, the stronger the better.

The concept has been criticized for possibly sparking more patent litigation. It could also make it more difficult for free software advocates to write certain types of programs in areas where Intellectual Ventures owned patents.

Another myth is the worry about so-called patent trolls--companies that exist only to accumulate patents and extract licensing fees, Myhrvold said at the Progress & Freedom Foundation's annual conference. "There isn't any hard data to support" the view that this is a problem, he said. "This is a great example of people having a bunch of anecdotes...I don't see that it's wrong to invent without making products."

In June, Rep. Lamar Smith introduced a bill that would make it easier to challenge patents after they were granted.

But Myhrvold said that was a modest change, suggesting that real improvements could come from creating a special patent court and making it easier for patent examiners to use the Internet to conduct research into prior art.