It’s Going Down, I’m Yelling “Timber”!

Never let it be said that I don’t have a flair for the dramatic, because I totally do.  (I also have a highly embarrassing story about that song, but we’ll get to that later.)

Have y’all read this yet, re: Intellectual Ventures cutting 5% of it’s workers?  I’m no business school graduate (oh, wait…yes I am) but laying off employees is not generally considered a sign of corporate health.  Last October, Intellectual Ventures had to stop buying patents to beat people up with because they were out of funds to do so.  Prior to that, it had been reported that they were not exactly wowing their investors with dividends.

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Note: This is not Nathan Mhyrvold.

So what’s going on in Nathan’s world?  Are the kitchen fumes getting to him?

I think what’s happened is that with the increased noise about patent trolling, things aren’t going as easy for IV anymore.  It’s no longer enough to be a 400 lb gorilla and jump up and down insisting people pay you royalties or you’ll kneecap them.  No, the public narrative has made that path a little more difficult.  Plus, when you sue one of your original investors they probably tend not to like it and that certainly can’t be good for business.

Intellectual Ventures was founded in 2000.  Back then, the idea of a company investing in patents for the sole purpose of finding people who may potentially be infringing on it, or who operated in a space that was anywhere remotely close to a particular patent that they held, was just coming into vogue.  For a fairly long period of time, it worked, in part, I believe, because the approach was so novel that companies didn’t quite know how to react.  Couple that with corporate counsel, who tend to be extremely risk-averse, and most victims likely just said “pay the dude, make it go away”.

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Not a corporate lawyer. Probably also not risk averse.

But starting a few years ago, lets say around 2007-8, people began to get all wise to that approach and even wrote about it online and tried to expose the trolls for their wretched behavior. And then all hell broke loose last year when President Obama scooped me and announced an initiative to reform the patents system and get a handle on these ne’er-do-wells.

If it were just that there were staff  cuts at IV, it would be one thing.  Companies sometimes need to trim the fat and eliminate duplicative positions and that can have nothing to do with their overall health.  It matters then, where within the company the layoffs are occurring:

IV has over 800 employees, according to its website, so a five percent reduction would impact at least 40 people. The bulk of the staff cuts involved attorneys and engineers who worked for IV’s large patent acquisition funds, three sources familiar with the company said.

IV also runs a laboratory which pursues inventions that the company itself can patent. That part of the business was not impacted by the job cuts, the sources said. Clouse declined to provide additional detail about the reductions.

  • Area of company that buys patents to sue people with:  cuts
  • Area of company that invents things to patent: no cuts

The (purported) location of the cuts speaks directly to the heart of their business model as a troll.

Like I said, “Timber!”

JustSayin_small_New

IPTT

{Pitbull image found here.  Second Pitbull image via Rolling Stone, found here.}

True Story:  As a reading class assignment, my 7th grader had to pick song lyrics and add stanzas of his own creation using whatever literary technique they were currently studying, which if memory serves was metaphors and similes.

He submitted the lyrics to Timber, by Pitbull.  Have you read the lyrics to Timber, by Pitbull?  I have.  Now.

And that is why I will never be able to look his teacher in the eye as long as we both shall live, why I assume that pretty much any song that is popular nowadays will have equally offensive lyrics, and why OMG, I’ve discovered to my horror that I have become the people I hated when I was 13: my parents.

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