How one man’s company is buying up vast quantities of intellectual property, and what that could mean to a wide array of industries.
Many people haven't heard of Nathan Myhrvold, but they’d be hard pressed to find a more interesting or accomplished individual. To read Myhrvold’s resume, one would think there are few men better suited to play a comical Bond villain (though there are currently no signs of doomsday devices in the works.)
Myhrvold was born in Seattle and began attending university at the tender age of 14. Like most absurd geniuses, he studied mathematics, geophysics and astrophysics at UCLA, quickly following that with a master’s degree in mathematical economics and a PhD in theoretical and mathematical physics at Princeton. Not satisfied with that academic mouthful, he also held a postdoctoral fellowship at the University of Cambridge, where he worked under a somewhat notable Physicist named Stephen Hawking. Here he studied cosmology, quantum field theory in curved space time, and quantum theories of gravitation. In the 1980s, he co-found a computer startup in Oakland, Dynamical Systems Research, which was quickly purchased by Microsoft. Climbing the ranks within Bill Gates’ enterprise, Myhrvold founded the Research arm at Microsoft, and eventually left his role as Chief Technology Officer in the late ‘90s.
In his free time, Myhrvold has utilized his untold fortunes to live out a sci-fi nerd’s wet dream. The modernist marble mansion he built on the shores of Lake Washington has approximately sixty aperiodic patterns (tile sequences that never repeat) built into the walls, floors and ceilings. His front garden is filled with vegetation from the Mesozoic era, which would be a great source of nutrition if Dinosaurs ever came back. Coincidentally, this is a possibility that Myrhvold believes in, were he to have access to enough chicken embryos and the black goo occasionally found inside dinosaur bones. And he should know, as he has discovered more T-Rex bones than anyone in the world (there’s a fully formed Tyrannosaurus Rex skeleton encased within a glass solarium in his home.)
But when he’s not digging up pre-historic creatures, dabbling in Formula One, bungee jumping, spelunking or innovating the world of cuisine with his inventions, Myrhvold devotes himself to a company he founded in 2000, humbly named: Intellectual Ventures.
The main goal of this 27,500 square foot research laboratory in Bellevue, Washington is to “solve difficult problems in science and technology.” This mission statement has manifested in a number of philanthropic endeavors, including the company TerraPower which will produce a “travelling-wave nuclear reactor” utilizing non-weaponizable uranium and functioning for 50-100 years without refueling. Another venture is the mosquito killing “photonic fence” which could greatly aid in the battle against Malaria. Myhrvold has even discussed the application of his patented idea to eliminate global warming using geo-engineering: the project involves helium balloons placed at the north and south pole, 16 miles above the Earth, with hoses that emit sulfur dioxide (scattering light and dimming the sun by 1%)
But there is something else Intellectual Ventures has been doing over the years, which bears a potentially ominous forecast for a wide variety of industries. Rather than use their research to manufacture and market new products, I.V. has been trying to create a capital market for inventions by buying up “Oceans of Intellectual Property.” Myrhvold’s company has bought thousands upon thousands of patents from outside inventors, which it can then choose to license to technology firms who create and market products.
Though this may seem harmless enough, the behavior is often known as “patent trolling” or “trojan funding”. By hording vast quantities of patents, and then charging others to use the ideas, Myrhvold can essentially decide which products get made, which industries suffer a strangle hold on innovation and which inventions receive a green light.
Though Myrhvold is by no means the only player in this game, the sheer quantity of IP that he’s buying makes him singularly positioned to influence more businesses than anyone else. By indiscriminately spending millions of dollars purchasing any and all available patents, Myrhvold can file infringement lawsuits against several companies in a wide variety of industries. The recent $1,000,000,000 ruling in the Mac vs Samsung IP battle is a prime example of how our tricky patent laws can cause devastating results, control competitors' innovation and decelerate development.
To put it simply, Myrhvold wants to own new ideas. With that power, comes the ability to charge rates on innovation and decide which players can survive in any given field. It wouldn’t be a stretch of the imagination to assume that the magnitude of Intellectual Venture’s undertaking requires Wall Street bankers to help assess the value of these patents. The only problem with this filtration process is that bankers are motivated by profit, not research and development, innovation or the public good. If Myrhvold wants to cash out of IP, he has to accept that the self-appointed financial experts he hires will always choose the route that returns most profit…even if that means stifling others through litigation, rather than manufacturing an actual product.
Due to the sheer quantity being purchased, it's hard to know if these patents would be better off not being owned by one incredibly accomplished genius. Without access to data specifying what Myhrvold has done with them it's impossible to know what might have happened had he not taken over. The beauty of a diverse patent market, is that there is usually a variety of interests supporting each one...creating a monopoly ownership across several fields forces various industries to adhere to one mindset.
Myrhvold himself is frustrated with the trolling accusations, and for all intents and purposes his aims might very well be to support innovation and technological development. But whether satisfying his personal passions, or seeking to profit off of boundless enterprises, it seems perfectly reasonable to keep a concerned eye on his activities.
For a man who was so present throughout the development of personal computing and the internet, one would think that another obvious solution was available to Myrhvold: Crowd-Sourcing. Why not create a website where consumers can vote on, and perhaps even invest in, the products they believe in. You would have a proven consumer base waiting for the product’s release, and could avoid the shark infested waters of financial middle men entirely. This might be a wishy-washy, ill-informed suggestion, though it still seems more appealing than sitting on a giant library of ideas hidden away in someone's vaults.
The 2008 economic collapse brought to light the way in which capital is managed in vast pools, and all the evidence needed to see that this isn't necessarily a good thing. A corporation of ideas, which doesn't concentrate on one market or innovate one product, but rather places a finger in everyone else’s pie, can’t be dismissed as the eccentric endeavor of one ambitious genius. The potential hazards across a massive array of industries are simply too great.
When discussing intellectual property, Thomas Jefferson famously argued for an ideal balance between an individual's right to profit from their idea, while still allowing for the communal imitation and social absorption that naturally occurs. Will Myrhvold, or those who manage his many ideas, have the care to strike this balance? The sheer quantity of purchases he’s making raise doubts to that end. Of all the ideas swimming within his net, I’m sure the day will come when only the prized fish are plucked…but for now he’s happy owning the whole ocean.
