“When you look for clusters, this collection from IBM actually seems to be one-off patents that aren’t related,” says Toong. “They got a lot of patents that were scattered.” Companies that make good licensing revenue from patents generally have strong clusters and families of patents, says Toong, who adds, “the IBM portfolio Google acquired has neither.”
Another image from Toong’s analysis shows that only around 10 percent of the collection bought from IBM is linked to any other patents in the collection.
“From this analysis, we can see there’s a whole range of things that Apple built off these patents, and perhaps even stronger connections to Microsoft patents, but the IBM portfolio appears to consist of isolated patents,” says Toong. “To assert that those later Microsoft and Apple patents infringe on the earlier ones, you really would want strong clusters and patent families; Google seems to have gotten a grab bag, although of course additional due diligence would need to be performed [to confirm that].”
Two weeks ago, it emerged that Google had purchased a second set of IBM patents, but Toong says it is too soon to have exhaustively analyzed that collection.
Toong expects Google and competitors in the mobile space to look for other chances to buy up mobile technology patents. Eastman Kodak’s many imaging patents are one possibility, as imaging has become a key part of the smart phone. “Nokia and RIM both have large portfolios in the wireless space and have businesses that appear to be in jeopardy,” says Toong, “so they are also candidates for buyers looking for patents.”
However, Toong says, a really smart company should look further ahead to the next technological fight. “This is going to repeat in other spaces where technology is converging fast,” he says. IPVision’s analytics suggest to him that patents around alternate methods of controlling computers such as gestures and voice could soon become very valuable. He cited how heavily invested Microsoft is in the Kinect gesture control system, which is used for games today, but which the company plans to use more broadly in the future.
When reached for comment, Google would only confirm that it had indeed acquired a patent collection from IBM, and state that Google is actively working to encourage reform of the patent system to prevent wrangling over patents from hindering competition in new areas of technology.
Lewis Lee, cofounder of IPStreet, a startup that also analyzes patents, argues that making it easier for companies to assess the value of patents prior to buying them can also help. “We’re seeing patents become a business asset that is traded, like property or stocks, but we lack any way to value them or know if they are worth more or less than others,” says Lee. “Not even Google will know whether the huge amount it paid for Motorola’s patents is reasonable.”
Lee thinks that the tools offered by his company, and those from IPVision, could help to change that by making it possible for a small inventor or company to prove the value of a patent. Making patents more tradeable could diffuse some of the tensions distracting Google and others from working on technology, claims Lee.
However, holders of large patent portfolios could still use those portfolios to force aggressive licensing terms on their competitors, Lee concedes. “Changing that will need political action on reform,” he says.