Google’s Patent Purchase Promotion: Overarching concerns

“He who fights monsters should see to it that he himself does not become a monster. And if you gaze for long into an abyss, the abyss gazes also into you.”

— Friedrich Nietzsche, Beyond Good and Evil

Over the course of my previous post, I questioned the mismatch between Google’s ostensible goal of eliminating patent trolls from the market, and its chosen means of achieving this end – purchasing patents from small inventors at a large scale in a concentrated time period. In it, I wondered whether such a move would benefit the market as a whole, or merely make life easier for Google and simplify efforts to expand its own portfolio. In this post, I examine another aspect of Google’s programme – what happens to all the patents Google purchases? Do programmes such as this one throw up the risk of large tech companies turning into the world’s biggest patent trolls? Is it possible that Google could become the very monster it is trying to fight?

In essence, the Patent Purchase Promotion involves giving Google the opportunity to exercise a right of first refusal over thousands of patents submitted to it by small inventors. As I’ve noted earlier, what Google has done here is create a marketplace in which a large swathe of small inventors are looking to sell their patents to the sole available buyer – Google.

Traditionally, patent acquisitions were cumbersome processes, requiring a large investment of time and money. These transaction costs added up to the cost of acquiring a patent, and acted as a built-in check against overzealous purchases – larger costs meant that companies were more careful to ensure that they only purchased the patents that they really needed – thus reducing the risk of large numbers of unpracticed patents being stockpiled in a few big portfolios. With the advent of such concentrated, large-scale purchase programmes, however, the cost of acquiring a patent reduces to little more than the price set by the inventor and the time spent by the company’s legal team scrutinising submissions.

This won’t end up solving the patent troll problem for anyone other than the company purchasing the patents – if anything, the identity of the non-practicing middleman who needlessly escalates costs for the ultimate practicing purchaser without passing on the benefit to the small inventor would change. Thus, the problem would remain the same, albeit with a different set of culprits.

This is, of course, to say nothing of the dominant position that companies such as Google would enjoy if such purchase programmes were to become standard practice. While it’s self-evident that they enjoy an undeniably advantageous playing field vis-à-vis the small inventor in such transactions, it’s also important to recognise that such programmes also pave the way for companies like Google being able to act as gatekeepers to innovation in exactly the same manner as patent trolls.

Trust us, they say.

What’s to prevent, for example, Google from charging a competitor exorbitant licensing fees for a patent it purchased but isn’t practicing at the moment? The answer, as it seems with most other areas in which Google enjoys positions of dominance, is as alarming as it is simple – nothing. Google expects the world to trust in its ability to do the right thing, and leave it at that.

The problem, however, is that in the patent market, benign actors can quickly turn into extremely malicious players – something that Google should know only too well. The company was one of several early investors (other tech majors such as Microsoft, Intel, Nokia, Apple and Sony were involved, as well) in Intellectual Ventures. Regardless of what Intellectual Ventures started off as, it’s become painfully clear what it is now – the world’s largest patent troll. Last year, the company turned around and sued Motorola Mobility (then owned by Google) over Motorola’s alleged infringement of three patents belonging to Intellectual Ventures.

If anything, this should act as a testament to the fact that Google’s fabled “don’t be evil” motto is especially lacking in purchase when it comes to trusting them on the patent market, an arena in which there are no well-defined lines between good and evil. (“There is no good and evil”, an IP-themed Lord Voldemort might say, “there are only patents and those too weak to seek them”)

In summary, then, Google’s expansion of its patent portfolio through such acquisitions would lead to a situation in which it enjoys a position of dominance on the patent market, with no incentive structures in place to prevent it from abusing such a position. What, then, is the best way to balance out the interests of the inventor with large corporations such as Google, while keeping patent trolls out of the equation? One alternative is through defensive patent licensing, more fully explained by Swaraj here. With slight modifications, it’s possible to visualise a defensive patent license framework that accomplishes all our goals: it insulates companies such as Google from expensive litigation; it ensures that inventors get compensated in the form of licensing fees without resorting to selling their patents to patent trolls; and most importantly, it ensures that the patent is available on the market to be licensed by any entity who desires to practice it. This would eliminate the threat of gatekeepers to an invention, either in the form of patent trolls, or in the form of corporations such as Google.

Another alternative could be, as I outlined somewhat roughly in my previous post, a Google-funded (but not Google-controlled) “eBay for patents”, which acts as a platform where inventors can easily connect to prospective licensors and transact with them. This would, however, require the fulfilment of two key prerequisites. First, such a platform would have to be completely independent of Google – this can be achieved, at least to an extent, if it’s implemented as a non-profit. Second, this platform would have to be constituted of a diverse array of hardware and software manufacturers, to ensure that no single buyer has undue influence over the market. Of course, the problem with such a solution is that it’s unlikely to be much more than a pipe dream. However, the technology industry has demonstrated much more willingness to collaborate than most others – in setting and maintaining communications and interoperability standards, for example, and it’s safe to assert that if anyone could pull off such a massive collaborative effort, it has to be the tech industry.

Balaji Subramanian

Balaji Subramanian

Balaji is a third year student at NALSAR, Hyderabad. He is currently an editor of the Indian Journal of Intellectual Property Law. He is fascinated by technology law and IP law, and is an active member of NALSAR's Technology Law Forum. When he isn't doing law school things, he wanders the country looking for quizzes to participate in. He can be emailed at [email protected]

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