[Op-Ed] Patent Trolls

Nathan Myhrvold, who founded the patent licensing company Intellectual Ventures in 2001 after retiring as chief technology officer of Microsoft, visited Seoul in October last year to launch the Korean branch of his company. He said he has a plan to help Korean universities, corporations and investors generate ideas and sell them on the global market. Myhrvold’s company has drawn five billion U.S. dollars from more than 30 investors, including about 10 global companies and pension funds, and bought patents and ideas having the potential to get patents. Many corporations have paid keen attention to the company due to fear of patent lawsuits that could result in large settlements.

In 2005, the patent licensing company InterDigital sued Samsung Electronics, which eventually paid 134 million dollars in royalties. LG Electronics paid the same company 285 million dollars in a settlement to avoid a court battle. Patent licensing companies are called “patent trolls” since they raise several billion dollars in funds, buy patents from all across the world, file lawsuits, and receive royalties. A patent troll hires hundreds of the world’s top engineers, physicists and intellectual property experts to achieve its ends.

Such companies with global networks obtain patents by supporting research activities and sharing the rights to use the patents. Governments and corporations generally do not support the research activities of inventors. Accordingly, professors and researchers are willing to cooperate with patent trolls that fully appreciate their ideas and technologies. Intellectual Ventures has signed contracts to buy around 200 invention ideas from eight Korean universities including Seoul National, Korea, Yonsei, the Korea Advanced Institute of Science and Technology, and Hankook University of Foreign Studies. In other words, it has obtained not only developed patent technologies but also those in their early stages.

The patents bought by patent trolls could pose a threat to Korean companies. The Korean government and companies will suffer great if they lose lawsuits. Worse, patent suits could force companies to the verge of collapse. Most companies simply do not have the means to apply for patents. Patent licensing companies are called patent trolls but do not violate laws and regulations. To reduce the amount of damages, the government and corporations should understand the significance of intellectual property rights and appreciate inventors’ efforts.

Editorial Writer Park Yeong-kyun (parkyk@donga.com)