Nathan Myhrvold

Former Microsoft CTO Nathan Myhrvold's firm Intellectual Ventures, which has amassed a huge pile of more than 30,000 patents, says it doesn't intend to sue companies over patent infringement. But Intellectual Ventures has lately shown a willingness to put its patent arsenal at the disposal of companies involved in litigation. In a deal announced today, Intellectual Ventures sold a "significant" number of patents to Vlingo, a Cambridge, Mass.-based company that makes voice-to-text software. Vlingo is involved in a legal dispute with a rival company, Nuance Communications, and said it intends to use the Intellectual Ventures patents to bolster its defense.

This is the second major (known) case of Intellectual Ventures patents turning up in high-profile tech company litigation. Back in February, Verizon — which was fighting a patent infringement lawsuit brought by TiVo over time-shifting DVR technology — filed a counterclaim against TiVo using a patent acquired from Intellectual Ventures.

Intellectual Ventures has sparked controversy in the technology world, with some critics calling the firm a giant "patent troll" that uses its patents to extract hefty licensing fees from companies. Myhrvold has sought to counter that perception more aggressively lately, arguing that IV is creating a system of "invention capital" that rewards inventors and creates a market for their work. By opening its patent war chest to litigants, however, Intellectual Ventures will likely stir more debate about whether it is helping — or hindering — technology innovation.

Nuance, a speech software company based in Burlington, Mass., sued Vlingo for alleged patent infringement back in 2008, and the case is ongoing. Vlingo CEO Dave Grannan said his company joined Intellectual Ventures' "IP defense program" last week, which allows Vlingo to license any of IV's patents. Vlingo also purchased a "significant" number of patents from Intellectual Ventures, and used five of them in a counterclaim against Nuance filed July 21 in U.S. District Court in Delaware (pdf, 8 pages). A Nuance spokesman didn't immediately respond to a request for comment.

At the time of Intellectual Ventures' patent deal with Verizon earlier this year, Don Merino, senior vice president of licensing at Intellectual Ventures, made no bones about IV's interest in these types of agreements:

"We expect to be doing a lot more of these in the future. We see this as one of our core potential values. No one else in the world has aggregated 30,000 patents," Merino said. He added: "For the right price, everything is potentially available."

Grannan said Vlingo paid "seven figures" to buy the Intellectual Ventures patents, but wouldn't specify the amount. He said the idea was to get Nuance "to the settlement table." Intellectual Ventures referred questions on the deal to Vlingo.

Asked about his overall take on Intellectual Ventures, Grannan said: "Our patent system in America is horribly broken. If we had a rational patent system, there wouldn't be a place in the market for Intellectual Ventures."

"It's a shame they even need to exist," he added. "But if we want to have a technology economy that leads the world market, we can't have people getting hamstrung over IP (intellectual property). Intellectual Ventures creates a clearinghouse for that so people can get paid for their IP but IP can't obstruct the march of innovation."

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