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The Game Changer

September 13, 2011

By Mark Eyerly
Excerpt from
Penn Law Journal Fall 2011 Volume 46, Number 2 

Peter Detkin
Peter Detkin EE’82, L’85

When the public radio program “This American Life” makes your company the focus of an hour-long story that was five months in the making, you’ve arrived.

Say hello to Peter Detkin EE’82, L’85, founder and vice chairman of Intellectual Ventures.

In that radio story, “When Patents Attack,” a venture capitalist who was an early investor in Twitter compared Detkin’s Intellectual Ventures to a “mafia shake-down,” a characterization Detkin found “ridiculous and offensive.” After the story aired nationwide on July 22, a blogger at Prawfs Blawg complained: “The reporters begin and end from an unapologetic stance that patent litigation is destructive…. They are entirely dismissive of the idea that patents in the high-tech world promote and protect innovation.”

Detkin is accustomed to being at the epicenter of heated claims and counter-claims about patent law — he’s a former head of litigation at Intel, after all — and he’s argued both sides of the debate about whether patent law protects or impedes technological innovation. The thing that still takes some getting used to, he says, is that he’s a patent attorney to begin with.

As an engineering major at Penn his ambition was to design antennas, but many middle-age engineers he met complained their careers had reached dead ends. Convinced by his father that law school was better than getting an MBA (lawyers, his father argued, can do anything; MBAs can’t practice law), Detkin EE’82, L’85 applied to law schools as a “back up” plan. The Long Island, N.Y., native turned down Stanford to enroll at Penn Law because, he thought, “I’m never going to practice in California, so why go to school out there?” Two years after earning his J.D., Detkin joined the Palo Alto, Calif., firm of Wilson, Sonsini, Goodrich and Rosati. What did he see when looking out his office window? Stanford Law School.

As a Penn Law student with an undergraduate degree in engineering, he found himself courted by patent attorneys. But to Detkin, patent law “seemed too narrow in its outlook and the prevailing belief was that you had to be a high priest to really understand it.” That job in Palo Alto? Detkin was the firm’s first patent attorney.

Having built his patent work into a highly successful intellectual property practice at Wilson Sonsini, one day Detkin deflected a telephone call from a head hunter by saying: “Lady, you’d have to make me the head of litigation at Intel for me to be interested.” Can do. (Detkin had been litigating a number of cases on behalf of small companies against Intel at the time; he later learned an Intel executive suggested “let’s get this guy Detkin off our back and hire him.”)

At Intel, Detkin was the lead attorney responsible for managing the defense and eventual settlement of antitrust action by the Federal Trade Commission. He also managed Intel’s patent portfolio and led efforts to fight off what the company considered meritless patent infringement challenges against its technological innovations. Intel gave Detkin a bully pulpit when it came to all things IP, and he used it to lash out at what he called “patent trolls — somebody who asserts a patent broadly, for nuisance value with a meritless claim.” The term stuck; one day the second paragraph (if not the first) of Detkin’s obituary will cite him as the creator of the pejorative “patent troll.” (Detkin, by the way, still has the original troll doll — a toy of his then-6-year-old daughter — that inspired the phrase, which he coined after his first descriptive attempt, “patent extortionist,” led to a libel suit against Intel.)

The critics say that Intellectual Ventures is a patent troll, buying and licensing patents with no intention of ever making anything. Others, to quote a blogger at Intellectual Asset Management magazine, say Intellectual Ventures “has probably done more than almost any other organization to kick-start the marketplace for patents.”

“The term ‘patent troll’ has taken on a life of its own,” Detkin says. “It’s used now for any patent-holder you don’t like, whether their cases have merit or not. And Intellectual Ventures is a patent-holder companies don’t like. We’re disruptive. We’re working with folks who otherwise had no way to get value for their assets.”

In a nutshell, here’s what Intellectual Ventures does: it files patents on its own inventions (from agriculture and life sciences to nanotechnology and software); it buys patents from companies and individuals who might not otherwise convert their ideas into monetary gain; and it collaborates with universities and research institutions around the world, such as California Institute of Technology and the University of British Columbia, to develop inventions. It also licenses its patent portfolio to companies such as Samsung, SAP and Research in Motion, who are looking for access to ideas that can enhance their own work and to protect themselves from infringement suits. And in a partnership with the Bill and Melinda Gates Foundation, Intellectual Ventures is working on technologies that could diagnose and treat malaria, as well as neutralize the mosquitoes that cause the disease.

The firm has some 800 employees, $5 billion under management for investment, and has aggregated more than 35,000 invention rights. As the self-described “global leader in the business of invention and owner of one of the world’s largest and  fastest-growing patent portfolios,” Intellectual Ventures proclaims that it is bridging the Invention Gap — a term it has trademarked — by “significantly reducing a company’s liabilities and providing access to valuable invention rights.”

To the critic in that NPR story, “reducing a company’s liabilities” for patent infringement reminds him of “a mafia-style shakedown, where someone comes in the front door of your building and says, ‘It would be a shame if this place burnt down. I know the neighborhood really well and I can make sure that doesn’t happen.’”

But Detkin points out that 30 to 40 percent of U.S. patent holders are individual inventors without the resources to discover theft of their ideas by a large company, or to do anything about it even if they do. Meanwhile, more than 90 percent of revenues derived from patents goes to large companies. By aggregating the patent rights of small players, Intellectual Ventures levels the playing field.

“We are a game changer,” he says. “We are making the market place more efficient and transparent by bringing together creators of invention and users of invention. Someday we’ll be able to trade rights to inventions the way we trade pork belly futures, over an open exchange.”

It will come as no surprise that someone who has spent his entire career at the intersection of law and technology believes that “all business and technology professionals need a solid understanding of intellectual property. Inventors need to understand how to secure their rights, and business people, who may or may not be the inventors, need to know what to do with those rights.”

A gift from Detkin to Penn Law will help promote such cross-discipline understanding through the new Detkin Intellectual Property and Technology Legal Clinic. “I’m not aware of any other clinic at another institution that can provide this kind of practical, hands-on experience for when students enter the workplace or start their own companies,” Detkin says. In addition to training future lawyers, the clinic will also work closely with undergraduates at Penn to provide them an education on intellectual property. “It probably helps that the Law School and School of Engineering and Applied Science are across the street from each other, and that I am an alumnus of both!” says Detkin.

The mid-June announcement of the Detkin Clinic led Joff Wild, a blogger for Intellectual Asset Management magazine, to call on others to make a similar effort. “You cannot expect universities just to set up this kind of thing of their own accord,” he wrote. “They need help to understand why such courses/clinics are important, as well as support in providing students with accurate, relevant teaching and hands-on experiences. That’s where the IP community, especially on the corporate and transactional side, could come into play.

“Of course, there is a cost involved. But it is one that will pay itself back many times over if it helps to create a more IP-savvy environment in the years to come,” he added. “If Peter Detkin can do it, why can’t others … do it too?”

What’s next for Detkin? Unless the same headhunter who recruited him to Intel offers him one of his dream jobs – managing director of the U.S. Ski Team or commissioner of the National Basketball Association - he plans to continue his work with Intellectual Ventures for the foreseeable future.

He once wrote: “My career has spanned every aspect of the patent spectrum: I have prosecuted patents before the PTO, I have had lead responsibility for litigating and licensing scores of patents (both as licensee and licensor) and I am now a principal in an entity whose primary asset is its patent portfolio.”

While sometimes still amazed that he specialized in patent law, Detkin is not surprised that he is energized by embracing new challenges. That may be a genetic trait. Detkin had a solidly middle class childhood on the south side of Long Island in Rockville Centre, “a bedroom community whose biggest industry was the local archdiocese,” but both of his grandfathers lived classic immigrant stories. “One came to the U.S. from Russia, circuitously through most of Europe, to escape the Cossacks, and the other from Latvia via London as a stowaway on a U.S. merchant marine vessel,” he says. “Both came to this country without knowing anyone here and without knowing a word of English.”

Detkin’s Latvian grandfather became a furrier in Brooklyn, a job he proudly held for more than 60 years. His Russian grandfather settled in Philadelphia where he sold buttons and beads from a pushcart, and later moved to New York. “That eventually became the family business of importing and wholesaling costume jewelry. Mood rings paid for my two Ivy League degrees!” Detkin says.

“I don’t give much thought to the questions, ‘What if I had become an engineer?’ or “Why patent law?” he adds. “I just remember getting on that plane to California with a one-way ticket in my hand and thinking about my grandfathers. They focused on the future and never looked back. I can only aspire to be half the men they were.”