For many inventors, the grant of a patent application is quite exciting. However, once the inventor seeks to market their invention, they can find the process costly and overwhelming. Often when small companies or solo inventors develop new ideas that are later patented, they discover that manufacture or use of the patented invention is unmanageable for an entity of their size. Rather than sit on this technology and let the patent protection expire, these persons will seek to sell their patented idea to another person or company who can use them. Scattered among firms and investors who are attempting to acquire valuable patents for use in their own businesses are non-practicing entities, who have more litigious purposes in mind. Non-practicing entities, which are known colloquially as “patent trolls,” are entities that purchase patents solely for the purpose of enforcement of the patent rights. Patent trolls do not make, use, sell, or offer to sell the technology that is disclosed in the patent; rather, they acquire patents and then send out cease and desist letters or demands for licensing fees to persons (typically individuals and smaller companies who do not have the means to pay for expensive patent infringement litigation) that they perceive to be infringing its patents. At times, these claims of infringement are based on tenuous grounds, and the person receiving the threats feels that they have no choice but to pay the patent troll what they are demanding.
Patent trolls have contributed to the push to reform the patent system by a variety of people—from the legislature to late night television show pundits. However, a recent new player has presented an idea for changing the patent landscape by taking would-be sales of patents away from the trolls. Google, who has previously openly criticized the patent system and questioned the need for patents as a whole, announced on April 27, 2015 that it will be testing a new program for two weeks called the “Patent Purchase Promotion.” This promotion invites owners of non-expired United States patents to sell their patents to Google. From May 8, 2015 to May 22, 2015, Google will open a streamlined portal for patent owner to offer to sell their patents to Google at a price that the patent owner sets. Google will review all of the offers for sale and then let patent owners know Google’s decision by June 26, 2015. Google has not set any kind of standard for the type of non-expired United States patent that will be considered other than that the patent cannot be a design patent. Google anticipates that all of the patent sellers would be paid by the end of August. Through this, Google claims that it is seeking to protect those patent owners who wish to sell their patents without the risk of the patent falling into a patent troll’s hands.
Google has yet to announce how many patents it will be purchasing or how much money it has invested into this new promotion. Google has also not announced what kind of critiques or methodology that Google will be using to evaluate the patent purchase offers that it receives. However, since Google would likely want to obtain some value from the patents it purchases, considerations that are typical of intellectual property acquisitions will likely be involved including, but not limited to:
- The remaining life of the patent rights (Patent protection is granted for 20 years from the date of filing the patent application. 35 U.S.C. 154.);
- Strength of the patent (i.e., is the patent strong, or is there a high potential for a patent to be declared invalid?);
- Breadth of patent rights (i.e., are the patent claims relatively broad, or are the claims limited to the narrow, specific, singular embodiment described in the application?);
- Ease of use of the patent (i.e., is the cost of purchasing the patent outweighed by the cost of making or selling the disclosed technology?); and
- Marketplace concerns (e.g., number of competitors, available alternatives in the marketplace, etc.)
One interesting aspect of Google’s promotion is that the sale between the patent owner and Google will not completely remove all rights that a patent owner has in the patent. After the sale, Google promises to grant a non-exclusive, non-transferrable, non-assignable, non-sublicenseable license to the patent owner to develop, make, use, sell, offer to sell, import, export and otherwise transfer or dispose of the patented technology. So, while a patent owner cannot license his or her invention to another person after Google has purchased the patent, the patent owner still has rights to make some use of the ideas he or she developed and patented.
Google has stated that this initial two-week program is experimental, and that it may reinstitute the program or open the program to foreign patent owners if enough interest is generated in the promotion. The full details of Google’s program are still being released, but the new Patent Purchase Promotion presents an interesting strategy to combat patent trolls’ attempts to purchase patented technology for litigious uses. Rather than sell to the patent trolls, Google hopes that patent owners will instead sell to it.
Selling a patent to Google may be a tempting opportunity to many inventors and patent owners. In its detailing of the program, Google strongly encourages potential patent sellers to consult with an attorney before making a pitch to Google. Among other services, an attorney can assist patent owners with review of the terms of making the pitch to Google and the terms of sale. An attorney can also assist patent owners in understanding what rights they will have to the patented technology once the sale is complete. Consultation with an attorney who is experienced in transactions that involve intellectual property would be extremely beneficial to a hopeful seller to Google.