Friday, March 25, 2011

Contract Dispute Reveals That Intellectual Ventures Paid Consultant To Get Unions To Fight Patent Reform

It's often interesting what turns up in lawsuits. A few years ago, in the middle of yet another political fight over patent reform, lots of people were surprised when all the major unions suddenly stepped up as being against patent reform. As we pointed out at the time, their arguments made no sense at all. Of course, also notable at the time was the fact that frequent Techdirt commenter and "all patents are perfect" supporter Ronald J. Riley claimed credit for getting the unions to come out against patent reform. This left us scratching our heads a bit, but perhaps it was true.

Turns out there was a lot more going on behind the scenes, and it wasn't Riley's tortured logic after all, but giant patent hoarder Intellectual Ventures throwing its weight (and cash) around. Joe Mullin points us to a blog post from the "Gametime IP" blog, which discusses a lawsuit filed against Intellectual Ventures by Pat Choate, who worked for Intellectual Ventures on a contractual basis -- and who also was on the "advisory board" of one of Riley's many "organizations." The full filing is embedded below.

Choate had written a book all about how lovely and wonderful the patent system is, and so Intellectual Ventures started chatting with him. Eventually, they asked him to head a project to stop patent reform, with part of the strategy being: get unions to oppose patent reform. As part of this, Choate was to be paid $30,000 a month. They also asked him to try to keep Intellectual Venture's involvement in derailing patent reform quiet, since top investors in IV, such as Bill Gates, supported patent reform.

The filing reveals that Choate took part in Congressional briefings organized by Intellectual Ventures, though it's unclear if those he met with knew whose payroll he was on. However, a big part of the strategy, dubbed "Plan B," was for Choate to use his influence with unions to have them oppose patent reform, even though the current patent system hurts the American economy and makes us less competitive (thereby hurting unions):
As agreed by Choate and Harter, Choate's role was to devise strategy and tactics, perform analysis, serve as an expert witness, and educate opponents of the legislation about its nuances. Because of Choate's long-standing relationship with organized labor, Harter and Choate agreed that a primary focus of Choate's efforts on behalf of Plan B was to work with organized labor to educate union leadership about the legislation and its harmful impact on job creation, and to facilitate union opposition against it.
That was in May of 2007. The union announcement was in August of 2007. So, basically, IV paid this consultant $30,000 a month to get unions (who really should know better) to oppose patent reform, and he succeeded. The dispute, by the way, is because Choate claims that IV promised to pay him for two more years at one point, and after Congress watered down the Patent Reform Act to make it less than worthless, IV changed its position and began supporting the current bill (as if you needed any more evidence that the Patent Reform Act won't improve the system...). Choate wants all the money he believes is owed to him. I'm indifferent on the actual dispute, but interesting to see a bit of the cigar chomping backroom dealings come out in the sunlight.

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