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Fortune: The Patent King

May 07, 2001, 21:56 (10 Talkback[s])
(Other stories by Nicholas Varchaver)

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Patents have been a lightning rod issue in the Open Source/Free Software communities for some time now, with opinions varying from "fodder for gross misrepresentations by Microsoft executives" to "staunch support lest Western Civilization finally wind down." This Forbes feature looks at the legacy of Jerome Lemelson, who played the patent game to the tune of $1.5 billion and counting in what this article calls "an intellectual land grab." Read about the man who earned almost as many patents as Thomas Edison.

"This past February, Jerome Lemelson passed an impressive milestone: The number of companies paying for licenses on his patents reached 750.

So far, these licenses have reaped nearly $1.5 billion. This is almost surely more than any individual patent holder has ever earned from licensing patents, and it hasn't come about by accident. Lemelson spent his life thinking up patents--and then filing lawsuits to enforce them.

Lemelson may well have been a genius: He earned 558 patents (some came after his death), which leaves him four places behind the inventore-di-tutti-inventori, Thomas Edison. But his was a different kind of brilliance altogether. In truth, his most lucrative patents were the product of a masterful exploitation of the patent system, and they created a huge legal web that to this day ensnares corporations.

Now, though, the Lemelson litigation machine faces a serious threat, in the form of a suit brought by a group of bar-code-equipment manufacturers. If they win key rulings in the next year, the Lemelson operation will, in all likelihood, finally wind down. But if they don't, the $1.5 billion collected so far by Lemelson will be just a down payment on a much larger tab--payment not for the creation of new ideas but for what can only be called an intellectual land grab."

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