For Intellectual Ventures, the Dawning of a New Phase

Patent-hoarding giant Intellectual Ventures has long said it doesn’t sue. But now it is selling some of its 27,000 patents to people who do—and are set to share with IV the cash they generate as a result. It’s a scary scenario for the technology companies that could end up as targets, but not surprising to industry observers. Referring to IV, Dan McCurdy, founder of PatentFreedom, which tracks nonpracticing entities (a.k.a. “patent trolls”), says: “In my view, it’s inevitable: Whether they do it themselves or through a third party, they’re going to have to litigate.”

One such suit, filed in August by Chicago’s Niro, Scavone, Haller & Niro, seeks millions from Eastman Kodak Company and CDW Corporation for infringing a patent on digital-image frames. Niro’s client, Picture Frame Innovations LLC, acquired the patent in question from an IV shell company, according to the patent inventor and public records. Raymond Niro won’t comment on whether IV will share in any potential winnings, but did say, “IV is not involved in any way, shape, or form in the case.” IV vice-chairman Peter Detkin declined to comment on the patent or the suit. He did confirm that IV has executed about a dozen patent sales in the past year, with most giving the company a cut of any revenue reaped via licensing or litigation.