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Are Patents the New Black for Tech Companies?

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Are Patents the New Black for Tech Companies?

PatentGoogle recently ogled at a plethora of new patents; so, it’s likely its competitors will follow suit, as Microsoft has done on Monday, purchasing more than 800 patents from AOL.  As the New York Times article instructs, the $1.3 million-dollar pursuit of patents seems commonplace amidst the modern-day Web setting.

Chasing and claiming tech patents is savvy business these days.  Think about it.  Where is the Web going?  Surely, mobile and smart phone technology will gain in popularity; it has been doing so for some time, especially in the last year and a half.

“Microsoft is increasing its arsenal, even if it is expensive,” relays a patent expert.  Just what types of implements are covered under the patents?  AOL’s (a Web pioneer) patents involve search, email, instant messaging, and custom-online ads.  An outside analyst observes these are all technologies big brands are anxiously awaiting to ingrain in smart phone technology.

The patent acquisition is a money-making maneuver for Microsoft.  Smart phone manufacturers are anxious to meet growing demands, yet must pay a fee to patent holders.  Just how lucrative and sought are patents these days?  Google paid $12.5 billion for Motorola patents last summer.  Microsoft, Apple and others, paid $4.5 billion for some 6,000 patents last year, taking them off the hands of the bankrupted Nortel Networks.  The Times author did the math; the price works out to $750,000 per patent or one-quarter of what similar patents were ‘going for’ one year prior.

Patent battles have been commonplace in history; and, it doesn’t appear as if history needs a lesson, as Yahoo recently had issues with Facebook over patent violations.  It’s likely we’ll see a lot more patent differences ensue in the near future.  Patents relating to the steam engine, airplane, and automobile have played out in history; but, modern-day patent battles must keep speed with relentlessly evolving technologies.

These days patents are leverage.  “The major companies are using patents to gain competitive advantage rather than just seeing patents a s financial assets,” observes a law school professor.  Are the patents paving the way in the right direction for Microsoft?  The brand is estimated to profit more from each Android phone sold than phones running on Windows Phone software.

Did Microsoft better position itself with the purchase?  Aside from those pending, the brand now has about 20,000 patents (4x that of Apple).  A Boston University School of Law study researched the benefits of patents, eliciting data suggesting patents are highly beneficial in two verticals: the chemical and pharmaceutical.  “In pharmaceutical and chemical industry, the boundaries of a chemical composition patent are well defined.  But in fields like software and telecommunications, the claims are often so broad and vague that it is completely unpredictable what the patents cover and what they don’t,” advises a college law professor.

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Todd Bailey

Todd Bailey

SEO Consultant at pushStar

Todd Bailey is VP of Search & PR at Gen3 Marketing and a US Brand Ambassador for Majestic (SEO). Todd ... [Read full bio]

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