Allen Lo, Google deputy general counsel ()
SAN FRANCISCO — Patent lawyers say they will be curious to see the results of what Google Inc. terms an experiment in patent purchasing. The company’s open call for patents Monday is meant to keep them from being used by others to launch patent litigation. But lawyers say there may be some additional benefits for the company, both in potential litigation and in its business.
The company invites patent holders to set an initial price for their patents through its “Patent Purchase Program” during a two-week period in May.
Intellectual property attorneys and other patent industry players said the program could create some significant defensive shields for Google—even from the patents its doesn’t purchase.
Purchasing patents will prevent Google from facing infringement suits on those patents. And the program might provide a way for Google to snap up patents in fields that are new and potentially promising to the company.
And Google’s in-house patent lawyers may be able to find some diamonds in the rough.
“If I were Google, if I found these patents that maybe had some broad claims, I would go and test it out at the patent office,” said Lissi Mojica, a principal at Dentons and a former director at the U.S. Patent and Trademark Office. If Google thinks the patent could be stated more broadly, it can apply for a reissue from the PTO. And if Google is able to acquire a mass of relatively cheap patents around a certain technology, it can use those values to essentially set the price on infringement in that area, suggested Goodwin Procter IP partner Eleanor Yost. “Google could say we have 50 patents in this field, and none of them are worth more than 10K,” Yost said.
Google’s program makes clear that just because a patent is submitted for possible purchase won’t mean it’s “on notice” that it may be infringing the patent. Patent lawyers said Google may have timed its program well. Court decisions and calls for reform have driven patent prices down over the past couple of years, and some owners are eager to sell.
“Patents are low in price, but more of them are moving than they were before,” said Kent Richardson, a partner at Mountain View IP law firm and brokerage Richardson Oliver. Asking prices for patents fell 37 percent in 2013, then another 22 percent in 2014, according to his firm’s published surveys. Patent sales in the first quarter of 2015 were 50 percent higher than in the first quarter of 2014.
Google’s deputy general counsel for patents, Allen Lo, said on the company’s blog that it wouldn’t assert the patents, and would only use them defensively. Google’s published FAQ on the program states the company would retain the right to license the patents to others. But given Google’s pledge not to assert the patents, it is unclear what incentive a party would have to purchase a license.
“If Google is not going to assert it, who would take a license?” asked Robert Stoll, a Drinker Biddle & Reath partner in Washington, D.C., who is co-chair of the firm’s IP practice group. “If they’re telling everybody they’re never going to assert them, I think a lot of people would think it’s not really worth it to take a license.”
Lo was not available for comment on Tuesday, a spokeswoman said by email.
Still, the initiative has been welcomed by those who advocate curbing patent litigation driven by nonpracticing entities.
“Google’s portal is well structured to clear the market of exactly the type of patents that often fall into the hands of aggressive NPEs,” James Malackowski, the CEO of intellectual property merchant bank Ocean Tomo, said by email. Shawn Ambwani, COO at Unified Patents, said he hoped the experiment would bring transparency to patent pricing. “It’s an innovative effort, and I applaud Google’s efforts to help the market value patents,” Ambwani said. “Right now the patent market is very dark.”
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