Why tech vendors fund patent 'trolls'

Experts say it's about protection from lawsuits and access to a large pool of patents

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Further, some might not consider IV a 'pure-play' PAE; it has invented at least one product it's disclosed publicly: a laser-based bug zapper created with the Bill & Melinda Gates Foundation to help fight malaria.

Google: In, then out

Google , also, refused to comment about multiple sources and public documents showing that it invested money (PDF) in one of the companies related to the fund known as the Invention Investment Fund I.

A highly placed source close to Google confirmed that Google did originally invest in IV as a member, but only once. There has since been a bitter parting of ways, that source says. "As soon as they started suing people," Google "wanted out," the source says.

Google initially joined because it wanted to have access to a broad number of patents, but it later decided not to associate with a company that turned out to be mostly about lawsuits, he says. Two other sources close to or inside Google have corroborated this account.

Were the Wright brothers the first patent trolls?

The Wright brothers are esteemed for their invention of a flying craft. But they might also go down in history for being among the earliest people to sue over patent issues.

In 1903, they patented a technique of side-to-side wing control they never built themselves. The design was, according to NASA historians , a "wing warping" technique of lateral control in which the wings were actually twisted in opposite directions to create a differential lifting force that would keep an airplane afloat.

And then the Wright Brothers -- though they never manufactured their wing for sale -- started suing. Some consider the Wright Brothers the first known PAE because they litigated on a patent that they owned but never used in manufacturing their own products, even if others did.

The Wrights sued American inventor Glenn Curtiss, who claimed his wings were fundamentally different from the Wrights' invention. He refused to pay patent fees to the Wrights. But Curtiss lost in court, became a patent activist and spent a great deal of his time trying to show that manned heavier-than-air flight had been possible before the introduction of the Wright invention.

After Wilbur Wright died in 1912, Orville Wright eventually sold the patent for more than $1 million to a company that had been paying for the rights to use it.

That company became Wright-Martin, and it notified other early 20th century aircraft makers that they'd have to each pay a royalty of 5% on every plane sold.

The bottom line: The search giant made an investment of well into the tens of millions of dollars in 2008 in the IV entity known as IV IP I, the source said, and refused to go for a second round. Google and Adobe are the only technology companies among the current IV backers that didn't invest at least twice.

It's important to keep in mind, however, that none of these practices is illegal. It is endemic to the patent system in the U.S.

There are more than 2 million active patents in the U.S. alone, Ewing says, but only "a tiny fraction" of them are used commercially, either through licensing or through litigation, he explains.

"The aggregation model stands to increase the number of patents in play by one to two orders of magnitude," Ewing says. "I suspect the truth is that no one really knows what the net commercial impacts will be."

Based in San Francisco, Gina Smith is a New York Times best-selling author and a veteran tech and science journalist specializing in news, news analysis and investigative work. She's also the editorial director of the geek site aNewDomain.net . You can email her at Gina@aNewDomain.net .

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This story, "Why tech vendors fund patent 'trolls'" was originally published by Computerworld.

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