Cliff Banks - The Banks Report

What to Do With Those Old Patents

May 19, 2016 — Here’s some potentially good news for those of you sitting on patents that you’ve done nothing with — someone may want to buy those old patents. Over a two week period from May 25th to June 8th, patent owners can submit their patents to a special portal set up by Allied Security Trust , a nonprofit organization established in 2008 to streamline the buying and selling of patents.

The initiative is called the Industry Patent Purchase Program (IP3) and is comprised of 18 companies including  Google, IBM, Microsoft, Adobe, SAP, Ford, Honda, Hyundai, Kia Motors, Verizon, Cisco and Arris. The firms will review all submitted patents and inform the owners by July 29th if they are interested in purchasing. Categories include: automotive, communication/content delivery systems, location-based services, computer systems, consumer electronics, cloud computing, infrastructure software, application software, communication equipment, wireless, semiconductor, components, healthcare/medical, lighting and financial services. The companies involved in IP3 have agreed to not sue each other for patent infringement involving the patents that are purchased as part of the program.

Russell Binns, the CEO of Allied Security Trust, tells TBR that IP3 is an outgrowth of a program initiated by Google last year and that the tech firm wanted to expand it across several industries. According to Google, it spent an average of $48,000 per patent it purchased last year through the initial program. It bought 28% of the patents that were submitted and paid anywhere from $3,000 to $250,000 per patent. At least 25% of the patents it purchased came from individual inventors with another 33% from brokers.

“IP3 brings together IP buyers and sellers in a way that facilitates a near-frictionless marketplace for patents,”  Allen Lo, Deputy General Counsel of Patents for Google said in a statement.. Last year’s Patent Purchase Promotion proved that demand exists in the marketplace for a mechanism to efficiently sell patents. We expect the comprehensive group of companies partnering with IP3 will encourage a large number of sellers to participate which in turn will help promote innovation throughout the economy.”
The recent moves are part of a bigger plan on Google’s part to establish order in the patent market — a market that has been plagued by patent trolls (also known as “non-practicing entities” or NPEs), companies or individuals that buy patents for the sole purpose of suing other firms possibly infringing on the patent. Last year was a record for lawsuits filed by NPEs according to the United Patents Report. 
(For more on Google’s patent strategy, check out this Fortune article from last year: Google’s New Patent Plan: How It Will and Won’t Help Startups).
It’s become big problem in the tech sector, where 88% of patent lawsuits filed last year were by NPEs. Often, lawsuits are based on dubious claims while stifling innovation.
Meanwhile, automakers also are looking for ways to manage their patent strategies. Binns says certain automakers began approaching AST nearly two years ago to participate. Automakers are becoming more like tech firms as vehicles become more reliant on software. And as the connected car world becomes reality, being able to navigate the murky world of patents is a critical business advantage.
Today, approximately 30 companies participate in AST. The group has approximately 125,000 patents in its database

Sorry, comments are closed for this post.

Subscribe Now to The Banks Report