IP Law News

Big Tech Opens Wallet for Patents to Stop Infringement Fights

June 4, 2019, 11:02 AM

A coalition of companies, including Alphabet Inc.'s Google, Uber Technologies Inc., and Microsoft Corp., are preparing to buy a broad range of technology patents to defend against potential infringement suits.

Allied Security Trust, a nonprofit group that buys patents that its member companies could be sued for infringing, announced June 4 that it will hold another fixed price patent buy in July. The trust will accept offers from sellers July 15 to July 26 in 14 technology categories, during the fourth round of its Industry Patent Purchase Program (IP3).

The annual program offers a glimpse into which patented technologies are in high demand as companies seek to avoid infringement fights. Last year, the trust bought nearly 50 patents for $3 million through the program.

“The primary purpose is still risk mitigation to prevent these patents from being used against our member companies and take that threat off the table,” trust CEO Russell Binns said.

The trust invites patent owners and brokers to offer patents for sale at a take-it-or-leave-it fixed price through IP3 with no negotiations. It then resells the patents on the open market, on the condition that the buyer gives free licenses to all of its members.

Last year’s IP3 sought patents in eight categories, including artificial intelligence, automotive, blockchain, and internet-connected devices. This year’s program is soliciting patents in six additional categories, including advertising and content distribution, cloud computing, and location-based services, according to AST’s statement.

Mobile phones, software, communications, electronics, and computing systems are still the most common areas for patent litigation, Binns said. The new categories reflect “areas where there’s potentially more risk as we move forward,” he said.

AST’s 37 members include Ford Motor Co., Verizon Communications Inc., and Spotify Technology SA, and span industries such as information technology, semiconductors, automotive, health tech, and social media.

Previous IP3 programs have required patent sellers to submit their patents exclusively for sale to the trust. This year’s IP3 will require sellers only to keep their patent exclusive during the last two weeks of the program, when members vote on which patents they want to buy, Binns said.

“I’m hoping that this will help drive some more high-quality submissions into the market where sellers did not want to take them off the market in previous years,” Binns said.

To contact the reporter on this story: Malathi Nayak in Washington at mnayak@bloomberglaw.com

To contact the editors responsible for this story: Rebecca Baker at rbaker@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com