Google is Giving Away Certain Patents to 50 Startups In Their Latest Effort to Thwart Patent Trolls

"She Runs Neon Fraction of a Second", Image by Wonderlane

“She Runs Neon Fraction of a Second”, Image by Wonderlane

In the highly competitive world of creating, monetizing, defending and challenging tech-based intellectual property, “free” is neither a word often heard nor an offer frequently made.

However, Google has just begun a new program, for a limited time, to give away a certain types of patents they own to an initial group of 50 startups.  This is principally being done in an effort to resist time and resources devouring litigation with “patent trolls“, companies that purchase patents for no other purpose than to litigate infringement claims in their attempts to win monetary judgments. (We first visited this issue in an April 21, 2015 Subway Fold post entitled New Analytics Process Uses Patent Data to Predict Advancements in Specific Technologies.)

The details of this initiative were carried in a most interesting new article on TechCrunch.com posted on July 23, 2015 entitled Google Offers To Give Away Patents To Startups In Its Push Against Patent Trolls by Ingrid Lunden. I will summarize, annotate, and pose some free questions of my own.

In April 2015, Google successfully started a temporary program for companies to offer to sell them (Google) their patents. Then on July 23, 2015, they launched a reciprocal program to give away, at no cost, “non-organic” patents (that is, those purchased by Google from third parties), to startups.

The recipients of these giveaways are required to abide by two primary conditions:

  • They must join the LOT Network for two years.  This is a tech industry association of patent owners dedicated to reducing the volume of patent troll-driven litigation.
  • The patents can only be used defensively to “protect a company against another patent suit”. Thus, the patents cannot be used to bring a case “against another company” or else its ownership “reverts back to Google”.

Kurt Brasch, one of Google’s senior patent licensing managers who was interviewed for the TechCrunch story, expects other members of the LOT Network to start their own similar programs.

For any of the 50 startups to be eligible for Google’s program, another key requirement is that their 2014 revenues must fall between $500,000 and $20 million. Next, if eligibility is determined, within 30 days they will receive “a list of three to five families of patents”, from which they can make their selection. Still, Google “will retain a broad, nonexclusive license to all divested assets”, as these patents might still be important to the company.

For those startups that apply and are determined to be ineligible, Google will nonetheless provide them with access “to its own database of patents”. These are presumed to alas be categorized as “non-organic”. The unselected startups will be able to ask Google to consider “the potential purchase of any such assets”.

Back in April, when Google began their acquisitions of patents, they were approached by many operating companies and patent brokers. Both types of entities told Mr. Brasch about a “problem in the secondary market“. These businesses were looking for an alternative means to sell their patents to Google and Mr. Brasch was seeking a means to assist interested buyers and sellers.

Google eventually purchased 28% of the patents they were offered that the company felt could potentially be used in their own operations. As these patents were added to Google’s patent portfolio, a portion of them were categorized as “non-organic” and, as such, the company is now seeking to give them away.

Both sides of Google’s latest patent initiative demonstrate two important strategic points as the company is now:

  • Taking more action in enabling other tech firms to provide assistance against litigation brought by troll-driven lawsuits.
  • Presenting the company as a comprehensive “broker and portal” for patents matters.

Last week, as another part of this process, Google substantially upgraded the features on its Google Patents Search. This included the addition of search results from both Google Scholar and Google Prior Art Finder.  (For the full details and insights on the changes to these services see Google’s New, Simplified Patent Search Now Integrates Prior Art And Google Scholar, also by Ingrid Lunden, posted on TechCrunch.com on July 16, 2015.)

While both the purchasing and selling operations of Google’s effort to test new approaches to the dynamics of the patent marketplace appear to be limited, they might become more permanent later on depending on the  results achieved. Mr. Brasch also anticipates continuing development of this patent market going forward either from his company or a larger “group of organizations”.  Just as Google has moved into other commercial sector including, among others, “shopping, travel and media”, so too does he expect the appearance of more new and comparable marketplaces.

My own questions are as follows:

  • In addition to opposing patent troll litigation, what other policy, public relations, technical and economic benefits does Google get from their new testbed of marketplace services?
  • What other industries would benefit from Google’s new marketplace? What about pharmaceuticals and medical devices, materials science (see these four recent Subway Fold posts in this category),  and/or automotive and aerospace?
  • Should Google limit this project only to startups? Would they consider a more expansive multi-tiered approach to include different ranges of yearly revenue? If so, how might the selection of patents to be offered and other eligibility requirements be decided?
  • Might there be some instances where Google and perhaps other companies would consider giving away non-organic patents to the public domain and allowing further implementation and development of them to operate on an open source basis? (These 10 Subway Fold posts have variously touched upon open source projects and methods.)

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