Latest Round Of Patent-Buying Program Nets $3M In Deals
By Tiffany Hu
Law360 (January 24, 2019, 1:02 PM EST) — A consortium of companies that buys patents on behalf of its members, including Google and Uber, has spent $3 million on patents for software services, artificial intelligence, virtual reality and more in the latest and “most successful” round of its patent-buying program, the association said Thursday.
The Industry Patent Purchase Program, or IP3, which was created by Allied Security Trust — as the group of companies is known — generated more than 30 different patent deals for tech companies like Cisco Systems Inc., Google LLC, Honda Motor Co. Inc., IBM Corp., Intel Corp., Microsoft Corp. and Uber Technologies Inc., with purchase prices ranging from $2,500 to $255,000, AST said in a press release.
“IP3 2018 was our most successful iteration of our fixed price, fixed term patent purchase program to-date, with more participants, more capital committed from our membership, and more patent families acquired,” said AST CEO Russell Binns Jr. in the release.
In July, AST opened its third round of the IP3 program, this time inviting nonmember companies to participate in the patent-buying program for a fee. The latest round would also focus on a slightly broader range of technology areas, Binns said at the time, adding that he anticipated more patents and buyers participating in the program.
According to the Thursday release, a total of 19 members participated in the sales of patents ranging from software and web services, wireless technology, automotive services, the internet of things, virtual reality, artificial intelligence, and more. While blockchain patents received “significant interest” from member companies, very few sellers actually submitted assets in that category, the association said.
Andy Wojnicki, IBM’s director of patent strategy and defense, said that the success of the latest round was due to the experiences of the previous two iterations of the program.
“The result was an even more efficient and cost effective way to close patent transactions,” Wojnicki said. “Transaction ease and cycle time, breadth of patents available to transact, and haggle-free terms and pricing are some of the key advantages of the IP3 approach.”
Under the program, announced in May 2016, patent owners can submit their patents and set a price at which they are willing to sell, with no negotiations. After the submission period, members can then review the offers and decide whether or not to buy them.
The goal of the program is to acquire solid patents with no validity issues that can be used for defensive purposes, according to AST officials. That means IP3 looked for patents that could be asserted against the companies participating, either by the patent owner or by a nonpracticing entity that might acquire them, and mitigate that risk by getting a license.
When a finding of infringement on a single patent can lead to a judgment of many millions of dollars, acquiring and licensing a patent for far less than that far in advance is an attractive prospect for major companies, according to AST officials.
–Additional reporting by Ryan Davis and Kevin Penton. Editing by Alyssa Miller.
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