1. Article by: Amol Sharma and Don Clark Rick Tabar Brandy Wilson BJ Wolfgang Nate Yenne

2. Overview Nathan Myhrvold Founder of Intellectual Ventures Intellectual Ventures controls patents Patent- obtain the exclusive rights to (an invention, process, etc.) by a patent.

3. Overview cont. Companies pay fees to use these patents Verizon is paying $350 million Companies affected include: Intel, Google, eBay, VZW Two outlooks: Myhrvold is a “troll” for controlling these patents Myhrvold’s business is necessary for balance

4. Nathan Myhrhold  Founder of Intellectual Ventures  49yr old Ph.D. in mathematical physics  Paleontologist and extraterrestrial interest

5. Nathan Myhrhold cont.  Former Chief Technology Officer for Microsoft  Top confidante to Bill Gates during his tenure  Studied under Steven Hawking  Acquired 20,000 patents  Has nearly 50 patents in his name

6. Intellectual Ventures Company objective: to acquire patents for the sole purpose of licensing them to others, without ever manufacturing a product Founded in 2001, with initial business generated from early investments from major technology companies Companies must pay a patent fee in order to continue producing their products

7. Intellectual Ventures “I can’t afford to sue you on all of these and you can’t afford to defend on all of these.” –Mr. Myhrhold Has never had to sue anyone for patent infringement Patents obtained from universities, bankrupt companies and individual investors

8. Pros Favors small companies “Early Bird Special”- companies that invested earlier paid less, on a per patent basis, compared to other investors Some “Early Birds” were Sony, Nokia, and Microsoft

9. Cons Companies have to go through a third party to use patents “Implicit Threat” that if companies don’t agree to a licensing deal with Intellectual Ventures, they could face costly patent-infringement lawsuits

10. So You Think This Is Unethical? IBM and Texas Instruments are also buying patents and selling them like he is He is starting to feel pressure to produce profits Google is pushing into new fields

11. Why So Secret? Mr. Myhrhold uses names like Quasimodo Tolling LCC and Gigaloo LCC to disguise his patent-buying activities For competitive reasons Some of his investors are going to fight in Washington to curb his business model

12. Closing Launching new patent investment fund to reach goal of $2.5 billion Plans on signing up thousands of smaller companies as patent licensees for smaller amounts of money $5 to $10 million

13. Questions?