Google Announces Program To Buy Patents

Google unveiled a new experimental patent acquisition program, seeking to upend the secondary market for patents by offering patent holders the ability to pitch the company on purchasing their intellectual property.

For two weeks starting on May 8, the company will take open submissions of individual patents from their holders. After that, the company will narrow down the pool of patents to a shorter list that the company wants to investigate further. The company will look at potential encumbrances to the patent including ongoing litigation, and will decide by the end of this summer whether to purchase the patent after a few rounds of investigation.

“We view this as an experiment,” the company says in an FAQ about the new program. “We are looking for ways to help improve the patent landscape, and we hope that by removing some of the friction that exists in the secondary market for patents, this program might yield better, more immediate results for patent owners versus partnering with non­practicing entities.”

Under the program, the patent’s holder will retain a license to their work, though they won’t be able to transfer it or sell licenses to other entities. The patent will go into Google’s already massive intellectual property portfolio, which the company can then go on to use or license as it sees fit. By selling patents, smaller inventors (who may not have the money to pursue licensing deals with other companies) can make money off their invention, and Google can get a potential source of future revenue.

The program is a response to the current state of the secondary market for patents. One of the easiest ways for people to sell a patent is to turn to non-practicing entities, better known as patent trolls – companies that will buy up patents and then use them to demand payment from smaller firms that can’t afford to defend themselves from an infringement lawsuit.

Trolls are a huge problem for Google and smaller tech companies alike. Paying licensing fees can put a drain on a smaller firm’s finances, and actually taking a patent case to court can consume valuable time and effort. If this experiment pays off, it’s possible we may see a swing in the balance of power in the secondary market.