Google, Others To Hold 2nd Round Of Patent-Buying Program

Law360, New York (May 2, 2017, 7:57 PM EDT) — An association of companies that buys patents on behalf of its members announced on Monday that it is holding another round of its patent-buying marketplace known as IP3, which gives patent owners the opportunity to sell patents directly to companies.

Allied Security Trust said in a press release that the Industry Patent Purchase Program, or IP3 2017, which will begin in August, will provide patent owners access to dozens of the most successful companies in the world in industries such as information technology, software, semiconductors, automotive, health tech, including Google Inc., Ford Motor Co., Honda Motor Co. Ltd., Microsoft Corp., Oracle Corp., Uber Technologies Inc., and others.

The new round, Allied Security Trust said, will build on the success of its first round from 2016, which resulted in 56 purchase offers for more than 100 patents and patent applications and an average sale price of $96,000 per grouping of intellectual property.

IP3 2017 will focus specifically on Internet of Things, wireless, content delivery and video distribution, networking and communications technologies, it said.

“The success of IP3 among buyers and sellers and the strong results indicated a desire for more fixed price, fixed term, patent purchase programs, so launching a new IP3 is a natural evolution of this kind of innovative solution,” Russell W. Binns Jr., CEO of Allied Security Trust, said in a statement. “With our new program open to all of AST’s members, patent sellers will have access to prospective buyers from some of the world’s leading companies looking for high quality patents to acquire.”

Binns noted that Allied Security Trust believes that the new IP3 responds to the needs of its members and creates a more efficient way to acquire certain assets, adding that they anticipate a very focused and efficient selection process for patent acquisitions since they’re focusing on specific technologies for this next round.

“AST has been a strategic force in building defensive IP strategies for years, and I worked closely with them during my tenures at Microsoft and Shook Hardy & Bacon LLP, and with my new role at Uber, I am delighted to once again be a member of AST,” John Mulgrew, global head of IP at Uber, said in a statement.

Allied Security Trust said patent sellers and brokers can submit their patents for sale at a price they set between Aug. 1 and Sep. 30 via the IP3 portal, which is set to go live in the coming days. The association and its members will review the submissions and inform submitters whether they are interested in a purchase by Nov. 21, it noted, adding that all transactions and payments are expected to be completed by the beginning of 2018.

The association announced in November that its 2016 program attracted nearly 1,400 deals offered by 434 patent owners in May and June, generating purchase prices ranging from $10,000 to $325,000.

Aside from Google, Ford and Facebook Inc.,  AST members such as Microsoft, Adobe Systems Inc., SAP SE, Honda, Hyundai Motor, Verizon Communications Inc. and Cisco Systems Inc. participated in the sales.

Under the program, announced in May 2016, patent owners set a price for which they were willing to sell, with no negotiations. The patents sold were acquired by IP3, rather than by any of the individual companies, but all IP3 participants will get a license to the patents, according to the association.

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 Kevin Penton and Ryan Davis. Editing by Joe Phalon.

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