Google, Ford, Others Complete Defensive Patent Group Buy

From Intellectual Property on Bloomberg Law

February 6, 2018

By Malathi Nayak

A coalition of companies, including Alphabet Inc.’s Google and Ford Motor Co., participated in a collective patent buy of 70 patents for $2.5 million, organizers of the sale said Feb. 6.

The Industry Patent Purchase Program (IP3) is run by the nonprofit Allied Security Trust, which buys patents in order to safeguard its members from infringement suits.

The second iteration of the program, which began in August 2017, saw participation from 15 operating companies and 16 sellers, resulting in 19 deals, AST said in a statement. Six brokers also participated and facilitated 15 of the total deals, it said.

The first IP3 program was launched by AST in 2016. It resulted in 56 deals involving 107 patents covering technologies within the software, automotive, health-care, and financial services sectors, among others.

“We had structured the program this year to be a smaller program focusing on just a subset of technology areas,” AST CEO Russell Binns told Bloomberg Law.

Patents purchased during the IP3 program in 2017 covered technologies within the communications, content delivery, networking, wireless, and internet-connected devices industries, AST said. Communications had the most transactions—10 deals at a median price of $127,500, it said.

AST purchased patent collections priced between $25,000 and $390,000, with an average price of about $128,000, it said.

Google Program Was Model

IP3 was modeled on a 2015 patent buying program launched by Google. In both programs, owners were asked to offer patents at a take-it-or-leave-it fixed price with no negotiations.

Like AST, the IP3 program resells all the patents it buys on the open market with a provision requiring free licenses for all its members. Unlike 2016, when 15 members and 6 non-members participated, only AST members were allowed to participate as buyers in IP3 2017.

AST’s over 30 members also include Honda Motor Co. Ltd., IBM Corp., Microsoft Corp., Oracle Corp., Royal Philips NV, and Sony Corp.

AST is working on IP3 2018 and is considering offering patents covering a broader set of technologies, including, potentially, artificial intelligence, machine learning, smart home technology, virtual reality, and automotive technology, Binns said.

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

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bloomberglaw.com

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