Google got straight to the point when announcing its Patent Purchase Promotion in a blog post this week. “We invite you to sell us your patents,” began Allen Lo, its deputy general counsel (right).
Lo explained that Google was announcing the promotion “as an experiment to remove friction from the patent market”.
He elaborated: “Patent owners sell patents for numerous reasons (such as the need to raise money or changes in a company’s business direction). Unfortunately, the usual patent marketplace can sometimes be challenging, especially for smaller participants who sometimes end up working with patent trolls. Then bad things happen, like lawsuits, lots of wasted effort, and generally bad karma. Rarely does this provide any meaningful benefit to the original patent owner.”
The process for the promotion is simple. From May 8 to May 22, Google will open a streamlined portal for you to tell it about patents you are willing to sell and at what price. It will review all submissions and reply with a simple yes or no, with no negotiation over price allowed. Everyone who it takes up on their offer will be paid by late August.
So far, so commendable. But the promotion provokes more questions than it answers at this stage.
Google put details of the programme on its Patent Website, including the purchase agreement, which you can view here. Google also posted an FAQ.
Google was not forthcoming with much detail about what happens once it owns the patents or how many it was targeting. It said it did not know how much money it would spend.
The big question is what it will do with the patents.
As noted by technology blog Gizmodo, this FAQ included the clarification: “Google maintains a large patent portfolio. Any patents purchased by Google through this programme will join our portfolio and can be used by Google in all the normal ways that patents can be used (e.g., we can license them to others, etc.).”
Google’s motto is ‘Don’t be evil’, but don’t be unprofitable is also up there in its aims.
Sellers retain a non-exclusive licence to patents they sell. Google makes no promises that other companies will not be asked to license the patent. Gizmodo drew the conclusion that: “This doesn’t sound like an effort to defeat patent trolls – it sounds like an effort to compete with them.”
Even taking a more charitable view of Google’s intentions does not remove all uneasiness about the promotion. The company certainly has the financial clout to take many nuisance patents out of the system. Google’s motto is ‘Don’t be evil’, but don’t be unprofitable is also up there in its aims. If successful, this promotion would boost the potential strength of its patent portfolio. Why wouldn’t it try and leverage it for licensing revenue?
Patent licensing company IP Nav is certainly sceptical. In a blog post, it said the promotion means you would have to trust Google to not “misuse” your patent.
“Google makes no assurances that it won’t use your patent in an aggressive fashion against others. Google has certainly sued others for patent infringement,” IP Nav said.
IP Nav noted Google’s comment that any purchased patents could be used in all then normal ways.
“Not mentioned is that suing people is one of the normal ways that patents can be used,” said IP Nav, “Google is not making this offer as a ‘public service.’ The patents that Google chooses to buy will no doubt be patents that are of commercial interest to Google: either as a defensive move so that someone else can’t sue them with those patents, or as a way to block competitors.”
The take-it-or-leave approach to pricing the patents also means sellers may not be able to negotiate the best price. IP Nav advised potential patent sellers to talk to a variety of types of buyers before submitting a price, noting Google is sitting on $18 billion in case and $46 billion in short-term investments.
“There’s really only one reason to sell your patent to Google: they offer you more money than anyone else. And if they do that, there’s certainly no reason NOT to sell to Google,” said IP Nav.
Google also did not give much detail on the types of patents it would target, other than saying they had to be US patents and it would not buy design patents.
Lo concluded: “We’re always looking at ways that can help improve the patent landscape and make the patent system work better for everyone. We ask everyone to remember that this program is an experiment (think of it like a 20 percent project for Google’s patent lawyers), but we hope that it proves useful and delivers great results to participants.”
The choice now is for patent owners to decide if they want to be a participant or not.