Google Experimenting With Patent Marketplace To Combat Trolls

A Google sign at the company's headquarters in Mountain View, Calif. Google is launching a two-week-long patent marketplace next month, where sellers can name their own price.

Marcio Jose Sanchez/AP

In the most straightforward of language, Google announced its very own patent marketplace on Monday. "We invite you to sell us your patents," reads the first sentence of the blog post announcing the news.

It sets the tone for what Google says will be a no-frills, no-runaround, very transparent place to sell patents — so transparent that Google has even put up a copy of its patent contract already and is removing all negotiation over patent price in the marketplace (sellers give a number, and Google can only accept or reject it).

The company is calling it a "Patent Purchase Promotion" and says it hopes it will be "an experiment to remove friction from the patent market." Google says the marketplace will be up from May 8 to May 22 and that it will provide "a streamlined portal for patent holders to tell Google about patents they're willing to sell at a price they set." Google says it will review all submissions after the portal closes and let people know whether the company wants to buy their patents by June 26, with payment happening by late August. The marketplace will be open only to U.S. patent submissions.

Allen Lo, Google's deputy general counsel for patents, said in a statement that there are several clear reasons justifying the need for Google's patent marketplace. "The usual patent marketplace can sometimes be challenging," he said, "especially for smaller participants who sometimes end up working with patent trolls. Then bad things happen, like lawsuits, lots of wasted effort, and generally bad karma. Rarely does this provide any meaningful benefit to the original patent owner."

Google used the word "experiment" frequently to describe the program. Lo said to think of it like a 20 percent project for Google's patent lawyers. (Google often allows employees to take 20 percent of their time to work on anything they want if it's company-related.) And in an online FAQ, the company said it doesn't know even how much money it will spend in the marketplace yet.

Julie Samuels, executive director of Engine, a research and advocacy group that works with startups, says Google's patent marketplace might not be entirely new — "there is always an active marketplace of people buying and selling patents" — but she did say it is in some ways very different than anything else around at the moment. For one thing, she says Google is in it for the right reasons. "What's different and potentially really good about this is that we know Google's position on patents," Samuels said. "Google is very pro-patent reform. Google has been public in its opposition to patent trolls."

Laura Sydell previously reported on patent trolls for NPR. Here's her definition:

"Patent trolls, known officially as nonpracticing entities, or NPEs, are companies that don't make or sell anything. They just own patents. They make their money by getting licensing fees from businesses that use technologies covered by the patents they own. For many years, these 'trolls' largely targeted companies that make new technologies and develop software."

But more recently, Sydell reported, patent trolls have even targeted grocery stores, restaurants and clothing shops. She said businesses often pay lots of money to settle with trolls, because it's usually cheaper than going to court, even if the patent isn't good.

Samuels says Google's patent marketplace is a good thing because it means that many more patents will stay with Google, and not with trolls. "We don't think these patents will end up in the hand of a troll, and in fact we'll know where they are," she says. Of course, one could be concerned about a company as large and as powerful as Google possibly controlling a lion's share of tech patents.

Samuels does say that the Google patent market doesn't seem perfect, particularly when it comes to the time frame. "[Two weeks is] actually not a lot of time because patents are really complex legal documents," Samuels says. "It's really hard to assess the value of a patent that quickly, let alone all of the patents that are going to be submitted to this market."

But Samuels does say the transparency of the marketplace will be of real benefit to patent sellers, particularly the absence of negotiations over price. "It looks like they're cutting out a lot of the negotiation that would normally exist," Samuels said. "[It will be] much more like buying something in a store as opposed to going back and forth [with] multiple rounds of negotiation. It's kind of like the difference between when you buy a Tesla or when you buy a regular car. When you buy a Tesla, you just pay the sticker price. It looks like Google's trying to do a similar thing in the patent space."

Samuels has some advice for patent sellers preparing to enter the Google patent marketplace. "The best advice I could give them would be to set a reasonable price that does not look like extortion but also is appropriate with regards to what the patent and invention is worth," she says. "And it might help to provide a little information as to how you reached that number."

Google says everyone considering entering the marketplace should consult a lawyer first. And the company says people who aren't interested in the marketplace can still submit patents to Google through their "Patent Opportunity Submission Portal."