Method and System for Exposing Multi-Billion Dollar Racketeering Scheme
December 17, 2012
Arguably the wealthiest and savviest of the various creatures in the maze that is the United States patent system are Non-Practicing Entities (NPEs), better known as Patent Trolls, who have come to dominate the news about patents lately. The archetype of the Patent Troll, Nathan Myhrvold's Intellectual Ventures (also backed by Bill Gates and many large technology corporations) is now infamous for suing countless companies for patent infringement, even though Intellectual Ventures produces next to nothing. (It does have a nice lab for public relations purposes, such as when Ira Glass comes calling.) Rather than the efficient marketplace it claims to be, Intellectual Ventures is something more akin to a fancy brokerage firm that trades in patents instead of equities--except that this brokerage firm politely informs small companies that it will break their kneecaps (sue them out of existence) if they don't cough up hefty licensing fees, often for patents of highly questionable validity that have never actually been relied upon to produce anything.
Intellectual Ventures is not run by amateurs, of course. In the same way that no one has actually ever seen Keyser Söze, the ficticious Hungarian mafioso described in the film The Usual Suspects, few companies have been sued by Intellectual Ventures. But its agents, or in this case, shell corporations, are legendary. Everyone knows they are out there, but no one seems to know who they are.
That is because to the best of our knowledge, until now, there has been no publicly available list of Intellectual Ventures shell corporations, unless you count the USPTO assignment database, which contains millions of other records as well. In fact, in response to recent queries about their shell corporations, Intellectual Ventues stated, "Those interested in viewing granted patents and patent applications can search the USPTO's public database."
So that's what we did.
Like all of the USPTO's on-line systems, the assignment database is a technological abomination--sadly ironic for the agency that effectively manages the nation's technology rights. (The USPTO does deserve credit for making raw XML data available through Google, which is where our project began.) It must be noted that Intellectual Ventures would have had a much harder time lurking in the shadows all these years if government information technology systems, such as the USPTO assignment database and different states' corporation databases, were kept up to par. In fact, its business model would likely be impossible, as the courts would be likely to label the company as a vexatious litigant if they only knew how many lawsuits it filed.
Currently, the USPTO stores a company's name, former name(s), mailing address, state or country of incorporation, attorney name, law firm name and/or founder's name all in one field called "name". There are four more fields ("address1" through "address4") to store additional information, which could be anything. Sometimes, "name" and "address1" get switched. This makes it extremely difficult to figure out what is what in a systematic manner.
We combed through 15GB of this data and linked up every patent assignment with the PlainSite entity, law firm and attorney databases to create an improved version of the USPTO assignment database, which we've made available for free. Then we tagged all of the companies that have links to attorneys and mailing addresses frequently used by Intellectual Ventures. The resulting list is about 2,000 companies.
We have not verified that each and every company is definitely a shell corporation for Intellectual Ventures (doing so would be prohibitively expensive), but some obvious overlaps are apparent: managing corporations, telephone numbers, and other factors.
Feel free to add additional tags and send us feedback. We hope you find the list useful. And we hope that Congress and the courts take notice of one of the largest racketeering schemes ever perpetrated on the nation, with some of its richest billionaires acting more like thugs than visionaires.
Recently, the United States Congress passed the Leahy-Smith America Invents Act (AIA) with the general aim of improving the patent system. One of the major changes the AIA brings about, and Congress's apparent primary solution to the system's myriad problems, is a transition from "first to invent" to "first to file," which roughly means that the United States Patent and Trademark Office (USPTO) will no longer consider the dates that inventors conceive of or create inventions to be important (formally known as "actual reduction to practice"). Only the date on which a patent application is filed will matter for purposes of priority.
There has been considerable debate about whether or not the AIA will actually fix the system. There are so many serious issues, it's hard to keep track: among them, the ambiguous definitions of business method and software patents; the expense of filing for small companies; the abysmally slow processing times; the difficulty of invalidating obvious patents; and the ability to sue for patent infringement when one does not actually produce anything related to the patent--or at all. Sadly, the AIA is not likely to fix many of these problems (on the contrary: patent lawyers are already excited about new expensive procedures it creates that they can bill for), and the system will remain to some extent a horrifically complex labyrinth that, as before, only the wealthy and savvy can navigate.