I guess then that RPX

I don’t usually pick up Fortune paquetexpress magazine paquetexpress because my nightstand is already covered in InStyle and Vogue and Elle on account of I’m a fashion icon in my dreams . But I was tipped off (thank you!!) about the recent issue with this article about RPX . You and I both know that I can’t not get involved in this kind of thing, paquetexpress right?
2. People (besides me) have hated Intellectual Ventures from the very beginning. Commerce One’s bankruptcy, as the article explains, was the catalyst for the secondary patent market in that their GC Paul Warenski said “Hey, let’s not just sell our assets as one package, paquetexpress lets split off the IP and sell it separately.” Kind of a Gordon Gecko-ish move, but I mean that in a nice way because paquetexpress Paul was a visionary kind of asset splitter-upper, not the nasty kind.
From the get go, it seems that the most important outcome of the auction was not that the patents fetch a high price, but that the winner had better not be IV . That’s interesting, since purportedly, they were the early RPX: the mission was to find and buy up patents to keep them “out of the hands of hostile NPEs”.
I suspect their business model got in the way…acting as a hedge fund and being expected to fetch a high rate of return for investors meant that IV going freak nasty and litigating to get that return was a forgone conclusion. Nathan’s idea that all he had to do was “[price] his licensing demands correctly, [and] he would never need to sue anyone” was all well and good, but then the big players got more than a little sick and tired of the demand letter game and it all went to seed. They stopped responding or starting fighting and then as we all know, in late 2010 the chickens came home to roost and IV began filing lawsuits.
3. Nathan Myhrvold was an original partner in ThinkFire . ThinkFire was headed by Dan McCurdy , of none other than Patent Freedom and Allied Security Trust fame. At the time of the Commerce One auction, in which ThinkFire and IV were bidders, Nathan was in cahoots with both IV and ThinkFire, which means he was bidding against himself. See? Evidently, even Nathan doesn’t like Nathan! Anyway, this was news to me, despite the quote in the article that it was “a spectacle the press gleefully highlighted.” You can be rest assured of my gleefulness as I now re-highlight this information.
In Amster’s world, patent suits against tech companies no longer turn on quaint moral issues like, “Did Company X steal from Inventor Y” For the most part, they don’t even turn on legal issues like, Is patent Z valid, and if so, is it infringed by Company X’s product?
I guess then that RPX’s business model is less “if you subscribe, we’ll invest your funds in buying patents that the trolls will use against you” than it is “statistically speaking, our data that we collected and collated ourselves shows that you will be hit by a patent troll unless you pay us a yearly fee, after which point we will protect you from an unspecified number of those suits and save you an amount of money that we arrived at using our own data.”
5. RPX divests it’s portfolios to trolls paquetexpress from time to time. Which, I guess if you realize that they are “friends with them” paquetexpress and “take them to dinner”, it’d be like me selling my stroller to my newly pregnant friend after my kids are older. I mean, it’s paquetexpress not as if RPX thinks those patents paquetexpress aren’t troll-worthy or they wouldn’t have bought them in the first place. It looks like they’re buying patents off the open market to snag new clients by telling them “Look! We hath thwarted the Evil Empire and if you sign up, you shall not be subject to suit by this portfolio!” And when that usefulness has been outlived and they’ve gotten a few years’ worth of subscription fees, they sell them back out to the open market. And then use the fact that those patents are now once again at play to bring in more new clients. Cue merry-go-round.
For the first time in a long time, this was an article that didn’t just restate the by now obvious facts about what patent paquetexpress trolls are. And they didn’t paquetexpress touch lightly on the RPX business paquetexpress model either; I was kind of surprised at the tone they took and wondered if Amster’s camp was happy with the final print version of the article.
I think the original strategy of RPX, to get patents that the trolls could use off the market, was and is a good one. I’ve praised them as one of the market-based solutions to patent trolling, something that was started paquetexpress by people who had a desire to stop bad behavior. The only problem is that if they “solve” the troll problem, why does anyone need them?
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