Intel & the Patent Trolls

Today’s WSJ has an Op Ed from Bruce Sewell, general counsel for Intel, about "patent trolls."

"Our patent laws are supposed to be about proliferation of technology. If there is actual competition between patent owner and infringer, an injunction may be appropriate — it protects the patent owner’s right to exclusivity and does not deprive society of the benefits of the technology. On the other hand, if the patent owner has not commercialized the invention, blocking others from using it is a loss for all of us. The right to an injunction also needs to be tempered by a commonsense look at how much real value the patented technology adds to the whole commercial product. A fundamental invention deserves greater value than a relatively minor tweak to work that went before it. A broad application of the injunction remedy makes all patents "crucial," whether they are or not."

The great irony, apparently lost on Mr. Sewell, is that the Intel Corporation was built in large part upon abusive patent prosecutions versus competitors such as AMD. At least, thats according to the book Inside Intel.

The book is a tech investor’s must read. If you think Redmond is the evil empire, well then brace yourself — Intel was every bit as abusive a monopolist as Gates & Co. The key difference is Intel seems to have adapted faster than Microsoft. If you haven’t read Inside Intel, go get yourself a copy (50 cents used at Amazon); Its an utterly fascinating history of technology.

Despite their own longstanding use and abuse of the patent system, that Intel’s counsel would pen such a blatant hypocritical commentary is simply beyond funny to me.

My own view is colored by being a little guy: I’m on the BoD of a small public company, one with great IP that was ripped off by everybody. So I am talking my book. (We settled with Microsoft last year, and Apple filed for a declaratory judgment action against us). But, jeez, really, Intel’s position is so blatantly laughable, especially given their storied history of patent litigation.

Is this something that simply happens to most very large organizations? Not just companies, but, any huge group organized for a specific purpose? At a certain point, do they simply become so full of shit that they lose their way, start believing their own PR, and  forget how they got started? This eventually has to impact their performance.

No wonder AMD is kicking Intel’s collective asses . . .



Troll Call
WSJ, March 6, 2006; Page A14

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  1. Dru Nelson commented on Mar 7

    Barry, what is the company?

  2. john commented on Mar 7

    no shit…hubris breeds like a parasite in big organizations: GWB’s White House, the old IBM, old AOL, etc. INTC should go back to Andy Grove’s mantra: only the paranoid survive.

  3. john commented on Mar 7

    Barry, do you also wonder why pirate’s and bootlegger’s children become senators, congressmen and presidents?

    The new generation always rewrites the history of the family to suit their current circumstances. That was then, this is now.

  4. SJGMoney commented on Mar 7

    Dru, the company is Barry, I didn’t realize you were on their BOD, how did you get involved?

  5. Barry Ritholtz commented on Mar 7

    Late 1990s, I looked at the company as a favor to a friend who was an investor.

    I loved the technology, didn’t love the business model, and was unimpressed with management. But I thought the founder was a terrific guy — bright, inventive, terrific creatively — who needed to bring in new management, capital, and a new direction — and told him so.

    We stayed in touch, and when Microsoft rolled out Corona, I brought to his attention the many parallels to Burstware.

    Fast forward a few years, and Microsoft ponied up $60m.

    I obviously cannot say anything non-public, but I can say I was surprised when Apple filed for Apple filed a declaratory judgment action — given that the MSFT settlement validated the patents.

    The media person who has covered the story the closest has been Cringely

  6. Chad K commented on Mar 7

    I’m not sure when you guys got your patent on streaming audio/video over IP… but I’m curious to know how many prior works are out there.

  7. SJGMoney commented on Mar 7

    I follow Cringley’s stuff religeously and that’s where I first came across it ages ago. I also was surprised at Apple’s legal move, thought once you punched one neighborhood bully in the mouth the other bullies would back away. Instead they keep coming like we’re in Oz (and I don’t mean Dorothy’s Oz).

  8. Barry Ritholtz commented on Mar 7

    Richard Lang was the founder of Go-Video — he sold the company in 1987/88 (I think to a Korean company).

    Burst was formed shortly after that sale — early investors were the rock band U2, and one of the Baby Bells (either Southwestern Bell or Bell South).

    The patent portfolio is very early, and there is not a whole lot of prior art (if any).

    I have to assume that if there was much in the way of prior art, the inexhaustable legal team from Microsoft would have found them . . . and not ponied up 60 large.

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