Google Patent Purchase Promotion terms – what are they?

The Google Patent Purchase Promotion offer period ends Friday, May 22, 2015. But should you even consider submitting an offer? Can you withdraw one? What are the terms?

What is the Google Patent Purchase Promotion?

The Google Patent Purchase Promotion is an “invitation to bargain” — an effort by Google to buy patents on their terms, by getting sellers to submit their patents and asking prices all at once, so that Google has the opportunity to review and buy whichever it wants. I blogged about it here previously, pointing out what the Patent Purchase Promotion is (a clever effort to acquire patents at low cost) and what it is not (a patent marketplace). Google announced it on Monday, April 27, 2015, and it is open for offers from May 8 to May 22.
But Google’s aim here seems to be more than only reviewing patents to choose which to buy — there is a strong whiff of public-relations stunt to it, as well as a litigation defense aspect to it. And the terms are not really favorable to potential sellers.

What are the terms of the invitation to bargain?

To submit a patent via the Google Patent Purchase Promotion, you must agree to the terms of the submission form, viewable in a Google Doc.  If Google agrees to buy your patent, you must also agree to the terms of their Patent Purchase Agreement.  Those terms are not seller-friendly in several ways, among them the fact that you are bound by whatever offer you make to Google, while they may solicit and review offers from any number of other sellers.

The submission terms include:

• When you submit a patent to Google, they know about it, but you give up your right to use the fact that they know of it either as evidence of Google’s possible infringement, or proof of your damages as a result (Section 4).  This applies to all the information you submit to them with the initial submission, to all further communication between you and Google, and to Google’s review of the patent and all your communication (Section 9).
• You can’t sell your patent or agree to sell your patent to anyone else while Google is considering whether to buy it (Section 5), until at least June 26, 2015, and until July 22, 2015 if Google contacts you by June 26 to say they’re thinking about your patent.  This may be challenging for some patent holders, if they need to monetize patents soon, or decide they want competitive offers.
• You must name a price for your patent.  If Google accepts, you can’t change the price, even if you’ve realized the price was too low  (Section 6).  You can’t withdraw your offer — you have agreed to be bound by the terms of the Patent Purchase Agreement (Section 6).
• If you offer Google a patent subject to a terminal disclaimer, and Google chooses to buy the patent, you must also transfer to them all of the terminally disclaimed patents — at no additional cost (Section 7).  A terminal disclaimer is an agreement by a patent holder, when required by the USPTO, that a patent’s term or duration is shortened, because that patent’s claims are the same as the claims of another patent, owned by that patent holder, which expires sooner.

The Patent Purchase Agreement terms include:

• You sell them all inventions and discoveries that could be covered by the patent you’re selling (Section 4).
• They get power of attorney (Section 5).  If you balk at the sale, Google can file documents to complete the transfer of the patent from you to them, and make payments of maintenance fees in your name with the assistance of your legal counsel, if those fees are due before they sign (which must be by July 22, 2015).

In a FAQ and an “additional info” doc, Google points out that it can refuse to sign the Agreement, for any reason or no reason at all.  Note that Google is only accepting offers to sell U.S. utility patents, not design patents, plant patents, pending patent applications, or foreign patents or applications.  Google reminds users that sellers with patent assets that fall outside the Google Patent Purchase Promotion can go through Google’s Patent Opportunity Submission Portal.  Of course, you should speak with an attorney before pursuing that.

Does this sound like a good arrangement for you?

In effect, if you submit a patent to Google, you are:

• competing against people and companies you don’t know,
• at prices you can’t guess,
• while telling Google how much or how little you’d sell your patent for,
• giving Google two months to stop you from trying to monetize your patent any other way, and
• giving Google all the info they ask for about your patents and related applications.

What Google may really be doing with the Patent Purchase Promotion

Google has a history of fighting against patent rights — it has set records by spending millions of dollars lobbying Congress about patents (article via Reuters).  Google also has repeatedly been accused of infringement of intellectual property rights (that is lawyer-speak for “theft of intellectual property”) from other people and companies — such as patented innovations (from Apple, Oracle, Overture, and more), trade secrets, trademarks, and copyrighted material (article via Forbes), and has often lost or settled such accusations.  The Google Patent Purchase Promotion should be seen in this context.

Google likes having patents

Google has spent billions of dollars to acquire large patent portfolios (as this firmly anti-patent article points out, Google acquired Motorola for $12.5 billion in part for Motorola’s roughly 17,000 patents and roughly 7,500 patent applications), and has brought in billions of dollars (yes, with a “b”) in licensing out patents (such as this Google announcement of a transaction licensing those Motorola patents to Lenovo for about $2.9 billion).

Google has not been shy about pursuing its own patents. As of this writing, Google is the owner of 7,899 patents and 4,027 patent applications, according to searches at the USPTO. The result is that Google has a significant patent portfolio itself.

Why pursue patents while fighting against them?

Perhaps it is because Google believes it is losing to other tech giants in the race to control huge patent portfolios. In 2011, a consortium consisting of Apple, EMC, Ericsson, Microsoft, Research In Motion and Sony won an auction for over 6,000 patents and patent applications from Nortel Networks, at a price of $4.5 billion (an article is here). In 2014, Apple and Google settled claims against each other from a lawsuit that began in 2010 (read more here). Google’s lobbying efforts, if successful, would amount to a windfall for Google, as smaller companies and startups would have an even harder road to enforcing their patent rights.

The Google Patent Purchase Promotion looks like a PR stunt

In this context, Google’s Patent Purchase Promotion looks like an attempt to appear interested in striking a deal with smaller patent-holders, while putting Google in the news and giving them an opportunity to rail against the fictitious bogeyman of “patent trolls”.  Check this space soon for more on “trolls” – what they are, and what they’re not.

Are you still considering offering your patents to Google?

If you have questions, or are considering offering your patents to Google, let’s connect and continue the conversation (and to Google’s credit, they do encourage potential sellers to speak with an attorney).  You can find me on Twitter (@MatthewYospin), LinkedIn, and Google+, email me with my contact-me form, or call me at 617-340-9295.