Over the years H. Ross Perot has been called a great many things. The self-made billionaire and two-time presidential candidate has been labeled everything from a genius to a kook. Recently, however, Perot has garnered a new epithet. Many IP experts argue the Texas businessman is a patent troll.
Perot's transformation occurred in early July when he became the principal investor in the Ocean Tomo Capital Fund. The $200 million fund claims to be the first private equity fund to invest solely in firms with undervalued IP.
For instance, Forgent Networks claims to own a patent on the popular JPEG format for compressing digital images online. In the past three years, it used this patent to wring out more than $100 million in licensing fees from various companies, including Adobe Systems and Macromedia. Forgent claims its patent covers digital cameras, personal digital assistants, cellular phones, printers, scanners and other devices.
The U.S. Patent and Trademark Office (PTO) also has encouraged PLECs by granting a lot of broad, but questionable, patents. "Examiners are too lax in enforcing the requirement that inventions be novel," Jaffe says. Patent trolls then use the dubious patents to squeeze money from other businesses.
With all of these advantages, it's no wonder that many individuals and companies have decided to join the ranks of the trolls. One of the most famous converts is Peter Detkin, who invented the term "patent troll" in 2001 while serving as in-house counsel for Intel. Detkin is now a managing director at Intellectual Ventures, which most observers characterize as a troll.