The Tinkerers

by Alec Foege

  As a kid, Myhrvold was drawn to electronics because it seemed relatively simple. “All you needed was a soldering iron and some parts from Radio Shack,” he recalled.

  “I’m interested in lots of things,” he said. “It’s not so much that I can do anything I can put my mind to, but my mind is intrigued with lots of things that leads me to try them.”

  Myhrvold says he was always interested by science, but he tended to gravitate toward theoretical and mathematical things that you could just think up. “When I did projects at home that was more directly tinkering, whether it was weird cooking, electronics, or I remember I wanted to build a particle accelerator—that was too big a project for me. I made some of the parts for it. I had neither the budget nor the workshop to do much more than that.”

  Myhrvold is quick to add that he doesn’t view tinkering and invention as synonymous. “The thing that is interesting about invention is that it is a mixture of both highly intellectual pursuits—basically creativity that happens in your head—and the connection of that to the pragmatic reality,” he said. “So you frequently have a situation where your great ideas are informed by your tinkering and your physical experiments, which then inspire more ideas. You end up in this feedback loop where the ability to build and tinker and play with things really encourages you to have more ideas. Conversely the ideas encourage you to have more things to go do.”

  Intellectual Ventures does not actually produce anything. It might make prototypes of inventions but it will never initiate a product run. Myhrvold’s notion is to construct a factory of ideas.

  Myhrvold contrasts his tinkering shop with venture capital firms: “Venture capitalists invest in businesses or proto-businesses. They’re interested in something that can make money relatively soon, or at least deserve more funding relatively soon. They expect you to have your idea before you come to see them. We don’t. We support the inventors to have the idea in the first place. That is an enormous difference.”

  The product of a venture capital firm is a company that either goes public or gets acquired by another company. Myhrvold says Intellectual Ventures’ output is inventions, and the patents they generate.

  Myhrvold left Microsoft in 2000. For a few years, he considered the venture capital route, making some angel investments in young companies. Then he stumbled upon the idea of investing directly in inventions. Myhrvold figured he could either start the ten thousandth venture capital firm or start the first “invention capital” firm. “Of course, it depends on how you look at it,” he says. “If you draw the criteria broadly enough, then Thomas Edison has a good shot at this, because he had an invention lab, he raised money from investors specifically to create inventions.”

  Of course, Edison didn’t invest in other people’s inventions. He did, however, have various inventors work for him from time to time, most famously, Nikola Tesla, the father of alternating current, who claimed to have been ripped off by his former boss in the mid-1880s after he redesigned Edison’s inefficient direct-current generators and didn’t receive a large payment. Most of the other inventors didn’t stay with Edison very long. “Because Edison’s lab was about one great man,” says Myhrvold. “And everybody else was there to help the great man.”

  Intellectual Ventures, as Myhrvold describes it, was founded with the intention of investing both in its own inventions and in the inventions of others. “I have been successful enough, I could have hired a bunch of people to help me with my own ideas,” he says. “That would have been fun for me, but it wouldn’t scale. Of course, we do work on some of my ideas here. But we also work on ideas from a whole variety of other people, lots of other brilliant folks with strong personalities. We figured that was the only way we could make this thing scale, and really have something that could be a sea change for how the world does stuff.”

  In a practical sense, this approach requires Intellectual Ventures to recruit inventors not for their existing inventions but for what they will do in the future. While the firm entertains preexisting ideas that inventors bring to it, the main goal, according to Myhrvold, is to invite inventors to work together at the firm in what he calls “invention sessions.” In the sessions, participants brainstorm about new solutions to old problems or new solutions to new problems or solutions in search of a problem.

  According to Myhrvold, Intellectual Ventures has filed for patents for roughly two thousand ideas that emerged from “invention sessions,” among them several related to combating malaria, including some radical new diagnostics for malaria and a device that lets you keep vaccines cold when you transport them in parts of the world without refrigeration. “The most dramatic one is a device that uses a laser to shoot mosquitoes out of the sky,” says Myhrvold.

  Another resultant invention is a new kind of nuclear power reactor that can burn waste as fuel. “It’s attracting a lot of attention within the nuclear field, so within a couple years, we can build a prototype,” he says. He describes the reactor as a long-term project that will not be production ready for at least two or three years.

  Intellectual Ventures has around a hundred senior inventors that work with the firm, according to Myhrvold. About seven of those are full-time employees and another thirty are professors at universities; a dozen more are consultants or run their own companies. Then there are some retired tinkerers and assorted others. “The key to working with us,” says Myhrvold, “is that you have to have a day job where you haven’t sold your brain. Most companies that employ folks want their brain, and you sign something that says, ‘Anything you do, belongs to the company.’ That would prevent them from working with us, although sometimes we’ve done a deal with their company.”

  Myhrvold favors hiring university professors who have an itch for tinkering. He says that since most are accustomed to working under the aegis of research grants, which fund plenty of researching but very little inventing or tinkering, they are eager to share their wildest ideas. “It’s about studying some problem,” he said. “You can win a Nobel Prize and be a fantastic person, and yet have never invented a single thing. You may have discovered something that’s really important about the world.”

  He views Intellectual Ventures as an opportunity for such big thinkers to test their ideas in the commercial realm, an area in which he says there is shockingly little opportunity available. Myhrvold argues that the funding for invention in today’s America is “pathetic.” Venture capital firms are about translating an idea into a business. There are plenty of technology companies, of course, that employ engineers, “but how often do you see someone who has inventor on their business card? Essentially, never.”

  The simple reason, he says, is that companies are primarily interested in developing a product, not fostering the implementation of new ideas. “They’ll use the term ‘R&D,’” for research and development, “but it’s a tiny ‘r’ and big ‘D,’ and they don’t even mention ‘I,’ for invention, in the process.” Tinkering, in this kind of corporate context, is viewed as an extraneous waste of time.

  This is due in part to the fact that invention is often a subversive act. It is a disruption of the status quo. When Edison invented the phonograph, he was trying to disrupt the development of the telephone, which itself was in the process of destroying the telegraph industry.

  At its essence, the message behind tinkering is that something can be done better, oftentimes by creating something new out of whatever is lying around. But Myhrvold believes that most Americans take inventing for granted, that it is just something that happens. And because inventing is considered to be risky and outside of the mission of most people and most jobs, it is rarely incorporated into a standard business structure.

  Although every new idea in our technological society started as an invention, most people give invention short shrift. Venture capitalists are happy to lavish money on other parts of the technological food chain; but almost no one showers inventors with riches until they’ve proven themselves.

  Myhrvold believes
that the United States has become willfully ignorant of the unstructured kinds of environments in which the best tinkering often takes place.” America still invents things,” said Myhrvold. “But along the way, lots of other areas got professionalized.” It’s not that companies have grown to hate tinkerers; it’s that everything else around the tinkering process has grown immensely. “You’re not going to get me to say that the tinkering spirit is all gone, but it has been neglected.”

  He, like Dean Kamen, believes that the strong financial incentives for the brightest young people to become lawyers and investment bankers have gotten in the way. Of course, some tinkerers will pursue their passion because they feel they have no other choice. And for those intrepid souls, Myhrvold says Intellectual Ventures is there to offer generous sponsorship.

  Myhrvold claims that his company has channeled $315 million to inventors so far. “We’re hoping we can establish a new model called ‘invention capital,’” he said.

  Others have another term for what Intellectual Ventures has become: a patent troll. A patent troll is loosely defined as a party that purchases or otherwise acquires patents with the intention simply of enforcing them rather than actually manufacturing or using the inventions the patents were filed to produce.

  Myhrvold, not surprisingly, is unrepentant about his company’s defense of its expansive patent portfolio. “The process of getting a patent is pretty important to us, because without a patent, we don’t really own what we have, and people can just take it from us,” he said. “There would be no point in developing it.” Myhrvold says that the patent filing process has become more complicated and labor intensive than in Edison’s era, “so we have to have a lot of people managing that process closely.”

  Myhrvold is correct to place so much emphasis on the importance of patents. Indeed, the Founding Fathers considered them important enough to include in Article I, Section 8, clause 8 of the Constitution, often referred to as the Copyright and Patent Clause, as a power assigned to Congress: “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

  Unfortunately, some in the mainstream press, as well as a few prominent bloggers, have not viewed Intellectual Ventures’ exercising of this constitutional right favorably. The National Public Radio news show All Things Considered ran a particularly critical story in July 2011, in which it accused Intellectual Ventures of selling patents it owned to other companies “that don’t make anything” which in turn were “being used to sue companies that do.”

  The gist of most of the criticisms is that Intellectual Ventures has been taking in millions of dollars from investors, which include some big technology companies such as Microsoft, and using a large chunk of those funds to amass one of the largest patent portfolios on the planet. The fact that it has the potential to sue a wide swath of tech companies based on alleged infringement of its patents has created a climate of fear surrounding the company in Silicon Valley.

  Myhrvold, who was interviewed for the radio piece, added a note of skepticism to the proceedings, when asked by NPR’s Laura Sydell whether he was a patent troll. “Well, that’s a term that has been used by people to mean someone they don’t like who has patents,” Myhrvold responded. “I think you would find almost anyone who stands up for their patent rights has been called a patent troll.”

  Myhrvold went on to explain that Intellectual Ventures’ intent was to protect the independent inventor who, say, had obtained a patent for a “breakthrough idea,” but who didn’t “have the money or legal savvy” to prevent others from stealing his or her idea. Myhrvold’s firm would buy the inventor’s patent and then ensure that he or she gets paid by other companies who are infringing on the patent.

  NPR tried to track down a patent holder, whom Intellectual Ventures had supposedly bailed out in such a fashion, named Chris Crawford. Crawford received Patent Number 5771354 for an online backup system in 1988. The invention, according to the patent, allowed computer users to connect to an online service via phone or Internet in order to download software rentals and purchases, or to back up data. Though NPR was unable to track down Crawford, they did learn that he was embroiled in litigation over his patent, which was no longer owned by Intellectual Ventures.

  As NPR later learned, Intellectual Ventures had sold Crawford’s patent to a firm called Oasis Research, LLC, based in Marshall, Texas. Sydell visited the company’s office, to find that it’s a small office that appears to be unoccupied. NPR’s report concludes, based on supporting evidence, that Oasis Research is a bona fide patent troll. To wit, in May 2011, Oasis Research filed a patent infringement suit against Oracle, accusing the tech titan of violating six different patents in the development, marketing, and service of Oracle On Demand, Oracle CRM On Demand, and other products. Oracle fired back that August with a countersuit against Oasis Research in Delaware federal court, with hopes of declaring the patents invalid.

  Intent on pursuing the legitimacy of the patent, NPR had it analyzed by patent expert David Martin of the firm M-Cam. Martin showed 5,303 other patents covering similar ground as Crawford’s had been issued during the time his was being prosecuted. It’s not surprising that the US patent office was hesitant for many years to grant patents for computer software. It was thought that software was more like books or periodicals, original content to be copyrighted rather than an invention.

  Somewhat less convincingly, Martin told NPR that 30 percent of US patents cover inventions that already exist. As an example, he mentioned Patent Number 6080436, titled Bread Refreshing Method. “So for example,” said a cynical-sounding Martin in the broadcast, “toast becomes the thermal refreshening of a bread product.” He made it sound as if the invention was clearly a hoax.

  However, I looked up the actual patent document for the invention, filed by inventor Terrance F. Lenehan and granted on June 27, 2000. In fact, the invention is not toast, or even a toaster, at least in the conventional sense. The patent details “a method of refreshening a bread product by heating the bread product to a temperature between 2500° F and 4500° F. The bread products are maintained at this temperature range for a period of 3 to 90 seconds.” It also includes a description of a heating device that would enable the process, most likely to be used by restaurants and other food-service establishments. Indeed, Lenehan was also issued Patent Number 6229117, for the oven he designed for his bread refreshening process. I am not commenting on the value of the process or its potential viability in the marketplace, only that it is hardly the same as making toast.

  Indeed, the issue of the patents held by Intellectual Ventures and the companies it has sold patents to appears not as clear-cut as NPR portrayed it.

  For example, in August 2011, Forbes magazine attacked Myhrvold and his firm in a feature titled “Trolling for Suckers.” The basis for Forbes’s criticism of Intellectual Ventures was its methods of collecting and distributing investment capital and the poor financial returns it had registered so far. Specifically, the article took the firm to task for selling patents to technology companies that were also investors in Intellectual Ventures.

  Myhrvold’s defense of such accusations centers on his plan to create what he calls an “invention capital” market. “I believe that invention is set to become the next software: a high-value asset that will serve as the foundation for new business models, liquid markets, and investment strategies,” he wrote in a lengthy essay published in the March 2010 issue of the Harvard Business Review. “The surprising success Intellectual Ventures has had over the past ten years convinces me that, like software, the business of invention would function better if it were separated from manufacturing and developed on its own by a strong capital market that funded and monetized inventions.”

  It would seem that the buying and selling of patents is exactly the idea, despite Forbes’s protestations. Indeed, the business magazine’s main complaint seemed to be that Intellectual Vent
ures wasn’t exploiting its patent portfolio enough.

  Back in 2008, Malcolm Gladwell of the New Yorker sat in one of Intellectual Ventures’ invention sessions for an article he was writing about the tendency for new patentable ideas to arrive in multiples; that is, simultaneously, by groups and individuals not otherwise connected to each other. The main topic of the session was apparently the latest developments in the realm of self-assembly, although the leader of the session, an electrical engineer with a law degree, admitted that “we may start out talking about refined plastics and end up talking about shoes, and that’s OK.” The range of topics discussed included minimally invasive surgery, a used CAT scanner Myhrvold had bought on an online auction site, and the “particular properties of bullets with tungsten cores.”

  This is not to say that some of the inventions that have come out of Intellectual Ventures don’t have commercial promise. Still, Myhrvold makes it pretty clear that industrializing the tinkering process at its best is a scattershot endeavor.

  But he also argues that there are many advantages to tinkering in the modern age, thanks to computer software that makes it easy to perform tasks such as CAD, or computer-aided design, in three dimensions. Almost anybody now can sit at their desk and in a matter of hours do what it once took a team of draftsmen days to achieve. Then there are computerized machine tools, which can take the computer drawing and automatically make the part one has designed.

  Computer simulation allows tinkerers to test their ideas before they are even created to determine whether they will work. If you’re assembling a prototype for a new kind of nuclear reactor, such an option becomes incredibly important. Intellectual Ventures owns a one-thousand-processor supercomputer loaded with proprietary software that allows it to develop such a reactor. Myhrvold says they wouldn’t have been able to develop it otherwise, because they would have been unable to convince others (and maybe even themselves) that they were on the right track without building very expensive prototypes that could be exceptionally dangerous.