Google Announces the Patent Purchase Promotion to Foster Innovation

By Renee C. Quinn
April 29, 2015

Googlelogo copyWith the launch of our new website this year, we added a “Headlines” section to highlight news that is occurring within the IP Community.  Everyday we search for headlines from different media sources that discuss relevant topics that affect the IP Community as a whole.  If you are an avid reader of IPWatchdog, then you know that one very relevant topic we have recently written many articles on has been about Patent Trolls and Patent Troll Legislation.  Needless to say, many of the headlines we have highlighted recently have also been on this topic.  So while searching for headlines today, one thing in particular stood out, there were many posts from multiple media sources covering Google’s response to the Patent Troll issue they call the Patent Purchase Promotion.

The headlines call this Google’s way of “Outfoxing Trolls” and “Disarming Trolls by buying patents before they become weapons” because Google’s plan is to buy up patents from any inventor or entrepreneur who wants to sell their patents to Google while retaining the license to use their own inventions.  According to Google, the Patent Purchase Promotion is an experimental marketplace that was created to help improve the patent landscape by hopefully removing some of the friction that currently exists in the secondary patent market.  They created what they call a streamlined portal, which will open from May 8, through May 22, 2015, that will allow patent holders to submit information to Google on the patents they are looking to sell and at what price point they are willing to sell them.   Google plans to then review all of the submissions and contact those patent owners whose patents they wish to purchase by June 26, 2015 with transactions being complete and payments being made via ACH transfer 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.

There are many different opinions as to what this is about and speculations as to what Google’s real motives are to do this.  When asked what they intend to do with the patents they state that:

Google maintains a large patent portfolio. 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.)

But Google also states that the Patent Purchase Promotion is just their newest addition to the Google Patent Programs, which they designed in hopes that it might yield “better, more immediate results for patent owners verses partnering with non-practicing entities.”

Google promotes innovation both within our company and throughout the technology ecosystem. In the spirit of fostering such innovation, we have embraced new models for sharing intellectual property across a variety of technology areas. Our programs include our release of open source software (like Android and VP8), our participation in community licenses (including the Open Invention Network License), and some newer initiatives like the Open Patent Pledge, the VP8 License and License on Transfer.

We’re always looking at ways that can help improve the patent landscape and make the patent system work better for everyone. We ask everyone to remember that this program is an experiment, but we hope that it proves useful and delivers great results to participants.

But what exactly is the Patent Purchase Promotion and how will it work?  Apparently, anyone who is a patent owner or has the legal rights from the patent owner to sell a patent can submit their patents to Google during the May 8-22 submission period.  Those who wish to participate are only allowed one patent per submission and Google will only be able to pay entities that have a US Tax ID or who can fill out a W-8BEN-E form if they are a foreign company.   Given that this program is in its experimental phase, Google wants to keep it simple so they are willing to buy patents from foreign entities, but they are not going to buy any foreign assets or applications.

Throughout the documentation for this program, Goggle is clearly making sure that they cover all of their legal bases, by heeding several warnings to anyone who is thinking of submitting their patents to Google for consideration through this promotion.

But, please make no mistake: Selling patents is serious business. With this experiment, we are trying to simplify that process, but it is still a process that requires formal agreements that have real implications between you and Google. Just by submitting a patent for consideration, you are agreeing to certain things (such as agreeing to sell Google the patent at the amount you indicate in your submission if Google chooses to transact with you).

There’s some fine print that you absolutely want to make sure you fully understand before participating, and we encourage participants to speak with an attorney.

If you are one who is considering submitting your patent to Google for consideration, here are some things you need to know prior to doing so.  First, Google is not interested in any patents that are subject to terminal disclaimers, although they do go on to further state that because of the ramifications of double patenting through splitting ownership of terminally disclaimed patents, they will consider any patents submitted that fall into this category as an offer to sell not only the patent itself but also all other assets that are relevant to the terminal disclaimer.

Second, Google states that once a patent owner submits a patent through their forum, the patent owner is then obligated to complete the transaction at the amount the patent owner has indicated in their submission if Google contacts them via email by June 26, 2015.  Patent owners must also agree that during this time frame, they cannot sell their patents to or enter into any agreements with any other entity.

Additionally, once Google has contacted a patent owner, even if it is to say they are only potentially interested in purchasing the submitted patent, the patent owner must also agree not to sell the patent to or enter into any agreements until Google either finalizes their acceptance of the offer or notifies the patent owner of their intent not to complete the transaction.  So once a patent owner submits a patent, they can do nothing with it until Google makes their final decisions, which may be as late as July 22, 2015.

Further still, even if Google notifies a patent owner of their desire to purchase the submitted patent, and the patent owner submits all of the additional information Google requests, including a signed Patent Purchase Agreement, Google states that they “reserve the right to not transact with you for any reason (or for NO reason whatsoever) up to the point where we return you a fully executed copy of the Patent Purchase Agreement.”

Finally, once Google agree to and actually completes the purchase of a patent, the seller then retains a license to use the patent for the life of the patent.  The agreement states, in it’s finest legal jargon, that the license is “an irrevocable, non­exclusive, non­transferable, non­assignable (including by operation of law or otherwise), non­sublicensable, worldwide, fully paid­up right and license under the Patents, to develop, have developed, make, have made, use, have used, sell, offer to sell, import, export and otherwise transfer or dispose of any product, service, method or process.”  To which us non attorneys would say “Whatever that all means!”

Which is why I close with this.  Without knowing for sure what Google’s intent is or is not, if you are considering selling your patent to Google, make sure you hire an attorney you can trust to advise you through the entire process.  You and your attorney should read the contract line for line and word for word so you are fully aware of what you are getting yourself into.  Make sure you not only know what you are giving to Google but what you are getting in return.

The Author

Renee C. Quinn

Renee C. Quinn is the Chief Operating Officer, Marketing Director and Business Manager for IPWatchdog, Inc. She has worked with IPWatchdog since April 2006, where she is in charge of all of the day to day, behind-the-scenes operations of IPWatchdog. She also handles all marketing and advertising inquires and is the first point of contact for IPWatchdog.

Renée holds a Bachelor of Science degree in Psychology and a Masters of Business Administration. She writes on various business and social media topics for IPWatchdog.com and is available to consult with individuals and businesses on how to set up and effectively use social media and social networking tools to establish a successful marketing campaign.

Click to contact Renee via e-mail.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 34 Comments comments.

  1. Night Writer April 29, 2015 10:28 am

    If I had to guess, I’d say this is just a fishing expedition by the in-house counsel. They are always looking to buy patents and this is a way to go direct without law firms and 3rd parties in the middle.

  2. angry dude April 29, 2015 11:31 am

    This is all shameless corporate lies and PR.

    A few years back, in the wake of huge patent aquisitions or Nortel and Motorola patents, I offered to sell my patent to a number of those same corporations, Google including.
    None of them responded.

    They just look at the net worth of a patent holder and probability of patent being enforced against them. If this probability looks low to them then screw the patent holder – patent quality is the last thing on their mind.

  3. Renee C. Quinn April 29, 2015 1:29 pm

    Thank you Night Writer and Angry Dude, I have to say while I was writing this article my thought was, “Well, won’t this make them a Patent Troll?” Unfortunately we are having some technical, and over half the article is missing. At the end I actually give a warning about this very thing. So check back in a few and it will be updated.

  4. Night Writer April 29, 2015 1:30 pm

    Angry dude: I think that is basically right. Now with the AIA no small patent holder dare wave it in front of a large company who have legends of attorneys to file PGRs to the death squads.

    The problem is that the farther we get from objective merit the more we favor the giant corp.

  5. Night Writer April 29, 2015 1:34 pm

    The other thing Angry dude is Google. They still get 90 % of their revenue from searches. And yet they have a PR machine that says they are innovative. They are not. What they are is a monopoly that has not accomplished anything. They are a good illustration of what we don’t want. No innovation. No good products. Just a big monopoly beating everyone up.

    (And, by the way, I was a graduate student in C.S. a few years ahead of the founders and what they did was not innovative. One of the professors I had suggested that I do that. Yes they got it done and are great at starting a business. But, Google is a total failure as an innovative company. )

  6. Renee C. Quinn April 29, 2015 1:52 pm

    The article has been corrected. It’s actually more than double the length you read earlier. You will see that I actually go through the Agreement that Google wants the patentee to sign and what they must agree to even before they hit submit.

    And if you don’t abide by these rules, I can bet that they will sue you. So as I said in my first comment, I think “Doesn’t this make them become they very thing they wish to thwart, a Patent Troll?

  7. angry dude April 29, 2015 3:22 pm

    Gene,

    a “Patent Troll” with “good karma” 🙂

    (the rest of us apparently have “generally bad karma”)

  8. Renee C. Quinn April 29, 2015 3:49 pm

    Angry Dude, was that comment meant for me? Gene didn’t write this one. I did.

    – Renée

  9. angry dude April 29, 2015 4:04 pm

    Renée,

    yep, i was just responding to your previous comment, sorry for mistake

    I was reading Google’s announcement and couldn’t not notice “generally bad karma”

    It sounds like:
    “I don’t want to live in a world where someone else is making the world a better place”

    Gavin Belson, Hooli (aka Google) CEO (“Silicon Valley”, Sunday at 10pm on HBO)

  10. Curious April 29, 2015 4:13 pm

    I’d say this is just a fishing expedition by the in-house counsel.
    I’m inclined to agree. Perhaps someone has a gem of a patent that they want to give away. I’m sure Google won’t have any issues picking it up for a song.

    That being said, Google’s action with regards to patents is curious. On one hand, they are grabbing patents left and right — on the other hand, they haven’t met a patent asserted against them that wasn’t “directed to an abstract idea.”

  11. Funny April 29, 2015 7:02 pm

    Why only patent?

    Sell everything to Google and live on its mercy…. that is what Google wants.

  12. Night Writer April 29, 2015 10:44 pm

    Funny: I think you are right! Google has such a great PR machine. Please tell what they have done that is innovative beyond their search engine?

    The reason Google is acting the way they are is that they realize (and said so on record) that they could lose all their revenue overnight if someone comes up with an innovative way to search that is better than theirs. The way to protect themselves is to remove patents so they can just take it.

    The Financial Times said that Google spent more money lobbying Congress last year than any other corporation.

  13. Benny April 30, 2015 5:30 am

    Night writer @5,
    You tell us that Google has ” No innovation. No good products”.
    I’m using Google cgrome right now. I receive alerts from this blog via Gmail. I often use Google patents for patent searches. I use Google maps to find my way around, Google translate to understand foreign documents, Google news to keep up to date, and my mobile devices run Android OS. No, Google obviously has no good products for me to use.
    As for no innovation, if Google can be one of the biggest global corporations without being innovative, then perhaps innovation is over-rated.

  14. Anon April 30, 2015 9:10 am

    Benny,

    Your post smacks of Might makes Right.

    Once again, I cringe when I read what you have to offer.

  15. Radix April 30, 2015 9:19 am

    I wonder if Google has thought about the patents they are or will be infringing. If these patent holders offer their patents for an exorbitant price — which Google will likely refuse — wouldn’t Google then be chargeable with willful infringement?

  16. Benny April 30, 2015 9:34 am

    Anon,
    You are talking scribble. Re-read my post. I am NOT suggesting that Google is right or wrong, mighty or weak. I am merely suggesting that, contrary to Night Writers’ opinion, Google does offer good, innovative products.

  17. angry dude April 30, 2015 9:48 am

    2Radix:

    “…wouldn’t Google then be chargeable with willful infringement?”

    What’s in your wallet, dude ?

  18. Night Writer April 30, 2015 10:21 am

    @Benny: Google bought Android, Google copied maps, and Chrome is nothing new it is what Netscape was doing in 1996. Google has come up with one or two minor improvements to products that they took from others. A remarkably poor record for a company that gets 10’s of billions of dollars a year in profit from their search engine.

    So, tell me what you think their top three innovations are?

    And note that Google has not been taking market share by innovation that and their fear of an innovative search driving them out of business are why they are so anti-patent.

  19. Night Writer April 30, 2015 10:23 am

    Benny, actually all your comments go to Google using their market power in search to extend their domain. They are a lot like Microsoft was with Windows in the late 1990’s to early 2000’s.

    And note again Benny that Google is not relying on innovation to extend their domain but to buy and copy.

  20. Benny April 30, 2015 11:03 am

    Night,
    Basically what you are saying is that Google buys innovative companies. After which, these innovative companies become part of Google. I have heard it told that Google employs R&D engineers. I can only wonder what they do between coffee breaks if it doesn’t amount to innovation.
    We are ALL in fear that a competitor will come up with a better product than our own and drive us out of business. Thats how the market works.

  21. Anon April 30, 2015 11:39 am

    Benny,

    You being deliberately obtuse to the points that Night Writer is making only reinforces the rather low standard that you hold yourself to.

    The point is NOT that Google buys its innovative.
    The point is NOT that Google may employ R&D engineers (especially given how many of the rank and file software folk drink mightily from the Kool-aid fountains that mere copying should be considered innovating).
    The point is NOT that Google (or anyone) might be in fear of competitors out-innovating anyone.

    The point rather, is that for ALL of the Google cash, size and yes, personnel, they would apparently rather burn down the patent system (and yes, they may partake in that same system as they attempt to burn it down) in order to STOP any actual innovation that threatens them.

    It is NOT that such self-preservation in and of itself is unnatural. It IS that any such self-preservation should be stopped from wrecking the patent system – for rather obvious reasons.

  22. Night Writer April 30, 2015 1:17 pm

    Benny Anon put it rather well. I note you did not even respond to my post.

    Benny are you on Google’s payroll? Please be honest. It is ridiculous to think that the corporation that is spending more money to lobby Congress than any other corporation does not employ an army of paid bloggers.

    I’ve posted a number of links to the modern use of paid bloggers and to the massive money that Google is spending right now on Congress.

  23. Night Writer April 30, 2015 1:31 pm

    Also, Google has said that their advantage is a massive capital expenditure in infrastructure. Corporations like that don’t want patents.

    Just remember the history of the 1970’s and 1980’s. What patents did was light a fire under every corporation—either innovate or the other guy will and patent it. That made all the corporations move.

  24. Benny May 2, 2015 4:17 am

    Night,
    I am not on Googles’ payroll. I also find your suggestion that someone who disagrees with you is being paid to speak his mind slightly paranoid.

  25. Anon May 2, 2015 9:09 am

    being paid to speak his mind“….?

    Speaking his mind is not what the pay would be for, Benny. The paid spokesperson gambit is more or less to be relentless in “speaking” for only a certain dogmatic position, to not engage in any actual conversation, and to ignore any and all other points of law and fact that weaken the desired dogmatic position.

    For what it is worth, I doubt that you are a paid spokesperson.

    Your rhetoric is simply too weak on its own. 😉

  26. Renee C. Quinn May 2, 2015 10:53 am

    All,

    I am so happy that my article has prompted such a discussion. I do hope that anyone who read this right after it was posted did see that the bugs were fixed and the article is more than double what was originally posted. I hope you all read the remainder of the article including my witty last two paragraphs (which no one has mentioned LOL).

    But I will play devil’s advocate a bit here.

    1. I agree that Google has purchased or copied most of their innovations from others and

    2. I will also agree that Google has paid it’s rather large R & D team to make things better.

    BUT one cannot disagree that Google was not the first way to search the Internet by any means. Internet searching started in 1990 with Archie (Archive without the “v”) followed by Gopher, Virtual Library (VLib) , Excite, the World Wide Web Wanderer, AliWeb, JumpStation, Infoseek, AltaVista, Galaxy, the World-Wide Web Worm, WebCrawler, YAHOO Search, Lycos, Looksmart, BackRub, OH, and then finally six years later, in March of 1996, came Google. See:

    http://www.wordstream.com/articles/internet-search-engines-history
    http://en.wikipedia.org/wiki/Timeline_of_web_search_engines

    So it is a fact to say that Google was not the first search engine by any means but it also a fact that they took the prior search engines and used innovation to expand and improve upon the prior art to become the biggest and most used search engine. (And I’m a NOT an attorney – read the end of the article, you’ll get the joke – but isn’t that what MOST patented inventions are?)

    Which is why I close with this. Technically, you are ALL right!

  27. William Markov May 7, 2015 7:53 pm

    We appreciate greatly Google having so strongly recommended that inventors submitting through the “Patent Purchase Promotion” hire a lawyer. There are many strategic and legal considerations for patent owners to consider. In recognition of Google’s intent that the new program “simplify” patent purchasing, my law firm, Hoffman Patent Firm, has developed a likewise-simplified program to represent patent owners thinking of selling patents to Google. This includes an initial free consultation, no fee if Google doesn’t buy, and a lower-than-usual fee if it does. http://www.valuablepatents.com/googles-patent-palooza-patent-purchase-promotion-could-be-an-opportunity-to-sell-your-patent-if-you-are-careful/. The blog also details some of the reasons why and how a knowledgeable attorney can help, and why a lawyer with knowledge of patent pricing is the best combination of skills to advise owners about this program. We would be happy to consult with patent owners interested in taking advantage of the Google Patent Purchase Promotion.

  28. R Rens May 14, 2015 11:18 am

    Regarding Google Patent Purchase Promotion, why would Google buy any patents, when according to their terms, they can legally infringe any submittals!

    Per submittal terms, See Par 5: “Upon Termination, the provisions of Paragraph No. 4 above shall survive this agreement through the expiration of any Submitted Patents”.

    And Par 4 states: You agree that You will not use, and waive the right to use, the Submission-related Materials as evidence … of willful infringement, of indirect infringement, or for damages in connection with any claim of patent infringement.

  29. Marco Polo May 14, 2015 11:53 am

    I wonder what your take is on this clause…

    “You agree that You will not use, and waive the right to use, the Submission-related Materials as evidence for any purpose in any judicial, administrative, or other proceeding in which infringement of any of Your patents is alleged.”

    [4] in http://services.google.com/fh/files/misc/patent-offer-submission-page1.pdf

    So for all practical purposes, the patent is really no longer a patent…

    @ Renee: Shouldn’t this get a mention in your article?

  30. Marco Polo May 14, 2015 12:01 pm

    @R Rens: I totally agree. Funny that we made the same point at the same moment… Anyone else online with this opinion?

  31. William Markov May 14, 2015 12:30 pm

    Marco and R Rens,
    This is why Google says you should consult a patent attorney before submitting. Nothing in Google’s materials says you waive any rights to enforce your patent by submitting. The section you both refer to means that you can’t use the submission as evidence that you put Google on notice of your patent for litigation purposes.

  32. Renee C. Quinn May 14, 2015 1:05 pm

    R Ren – Your question is exactly on point. No one really knows why, for sure, that Google is doing this. There is much speculation as to why.

    Marco Polo – I am happy to add it. Remember, I am NOT an attorney. I was simply looking at this from a non-attorney standpoint, so its not surprising that I missed that one. Feel free to suggest where I should add it.

  33. Bob Stone May 21, 2015 2:40 pm

    Can anyone clarify more on above posts by Marco and R Rens… and William’s interpretation? It seems that the phrase in Par 4: “…or other proceeding in which infringement of any of Your patents is alleged.” The ‘OR’ is not linked only to evidence, but suggests it is inclusive or anything else, including a proceeding of infringement.

    Sounds to me like Google is deliberately wording this phrase ambiguously to create a ‘loop-hole’.

    Any other comments from the Forum?