Dropbox filed the necessary paperwork for an upcoming IPO late last week, putting it on track to become the latest tech unicorn to go public. It is also on the long list of high-profile, multi-billion dollar start-ups that have acquired patent assets from IBM in the years leading up to a listing.

The file sharing business acquired 63 US patents and applications from IBM in 2016 in a transaction that was recorded on the USPTO assignment database last September. It has also bought assets from Intellectual Ventures, file-sharing rival SugaSync and, in a 2014 deal, picked up a portfolio of 105 US assets from Sony.

According to the company’s pre-IPO S1 filing with the SEC, Dropbox owns more than 600 issued patents and more than 600 pending applications worldwide. Just in pure volume terms that puts it ahead of some other well-known start-ups which went public in recent years – Facebook, according to its S1, owned 56 issued patents and 503 applications in the US and another 33 grants and 149 applications in the rest of the world. Those numbers were as of the end of 2011 and so don’t include the 696 patents that the social networking giant bought from IBM in 2012 (the year the company went public) and the large portfolio it also acquired from Microsoft (which was originally owned by AOL).

Acquiring assets on the secondary market gives start-up businesses a quick way of bolstering their portfolios, while helping to reassure their investment banking advisers and potential investors that they have assets to use in a counter assertion should they be sued by a competitor in the run-up to a listing.

For their part, an IPO gives any big patent owner which is that way inclined the opportunity to contact the relevant company (and, presumably, its investors) to explain why it really needs this or that package of patents that just so happens to be for sale – straight cash, a slice of the business or a mix of both will do nicely!

Thanks to confidentiality clauses, no-one need ever know which scenario applies. That probably suits both buyer and seller most of the time.

Dropbox is certainly treading a well-worn path. Last year, following Snap’s IPO we took a look at those start-ups that had bought patents from Big Blue in the run-up to a listing. Alibaba, Facebook, Snap, Google, Twitter and LinkedIn all did deals of varying sizes, the largest of which was Twitter’s acquisition of 943 assets for $36 million. This staved off a possible infringement lawsuit from IBM- so we can be pretty sure who contacted who in that example.

In the follow-up to our piece, a Silicon Valley intermediary got in touch to explain why those sales are particularly good business for IBM from a tax point of view (you can see their comments at the end of our post). They also explained why these kind of deals appeal to investment bankers:

The pre-IPO angle is just opportunism when Wall Street demands that a new company protect Wall Street’s investment. Rather naively, the bankers want the new company to have patents as a form of insurance. Wall Street loves insurance, and will pay 1% in this regard, hence the patent acquisition budget. So, the money actually comes from Wall Street since the company uses short term mezzanine loans to fund the patent purchases, paid back by IPO money, all the under the guise of protecting Wall Street’s money. IBM knows this.

What Dropbox’s acquisition record suggests, however, is that rather than just engaging with the secondary market in a deal-making frenzy in the months leading up to going public, some high-profile start-ups are looking to acquire patents far earlier in their lifecycle.

That’s also true for Uber, which is yet to file for an IPO but has been busy bolstering its portfolio over the last couple of years - you can see our analysis of the ride-sharing company’s buying activities here.

Many of these high-profile, high-valuation businesses are simply waiting longer to go public and are becoming more sophisticated IP players in the years before they list. As the most active annual filer of patents in the US, IBM will surely remain a favoured partner for those looking to the secondary market; but with others, such as IV, also in patent-selling mode, the long line of unicorns certainly have plenty of deal-making options.