Google’s legal team has just announced that they’ll be buying as many patents as possible in order to “remove friction from the patent market” and defeat patent trolls, companies that buy patents just to sue people on bogus charges of infringement. But there’s a big problem with this strategy.
Patent trolls are formally known as “non practicing entities” or NPEs — instead of inventing something to sell you, they buy other people’s intellectual property and license it to you. At least, that’s the nice way of putting it. In reality, most NPEs buy up patents from other companies and then develop large legal programs to “protect” their intellectual property by suing anyone whose inventions appear to be infringing.
A study last year from PricewaterhouseCoopers estimated that 67% of all patent lawsuits originate with trollish NPEs. A number of legal solutions have been proposed for this problem, and many states have legislation now that makes it much harder for NPEs to sue for infringement. And nonprofits like Electronic Frontier Foundation have been involved in many efforts to cut patent trolls off at the knees by getting their often-overbroad patents declared invalid.
Now Google is trying a new strategy. They’ll just buy your patent, so that patent trolls can’t get to it.
On the Google Public Policy blog, Deputy General Counsel for Patents Allen Lo writes:
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.
So today we’re announcing the Patent Purchase Promotion as an experiment to remove friction from the patent market. From May 8, 2015 through May 22, 2015, we’ll open a streamlined portal for patent holders to tell Google about patents they’re willing to sell at a price they set. As soon as the portal closes, we’ll review all the submissions, and let the submitters know whether we’re interested in buying their patents by June 26, 2015. If we contact you about purchasing your patent, we’ll work through some additional diligence with you and look to close a transaction in short order. We anticipate everyone we transact with getting paid by late August.
By simplifying the process and having a concentrated submission window, we can focus our efforts into quickly evaluating patent assets and getting responses back to potential sellers quickly. Hopefully this will translate into better experiences for sellers, and remove the complications of working with entities such as patent trolls.
This is a great idea, executed by the wrong people. Patent trolling is a major blemish on the IP landscape, and has punished scores of small businesses and individuals who had no way to fight the frivolous threats issued by NPEs. But a for-profit business like Google should not set itself up as the entity that will remove patents from the marketplace to make the legal landscape safer.
Basically this is another one of Google’s good-guy strategies that rests on the “just trust us” principle. It’s true that Google has no history of being a patent troll. But stockpiling patents is not a smart way to stay on that path. Why doesn’t Google simply donate the money it’s using for this project to a non-profit entity, which could make the patents into public goods, licensing them to anyone who asks?
In their FAQ about the Patent Purchase Program, Google explains:
Any patents purchased by Google through this program 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.).
So basically this is a program to buy a lot of patents quickly, from small businesses that may not have the resources to sell those patents to non-trolls.
This doesn’t sound like an effort to defeat patent trolls — it sounds like an effort to compete with them.
Illustration by John Burgoyne, Inc.com