Wednesday, April 10, 2013

Google's Latest Search Questions

As anyone working in the world of patents knows, the vast majority of transactions are shrouded in secrecy.  Transactions generally start with non-disclosure agreements and end with agreements with non-disclosure clauses.  From the real person of interest (lawyer speak for the person who really owns the patent) to the address of the owner, to the terms of a license agreement everything happens behind closed doors.

Enter Google, a firm that no doubt has signed its share of non-disclosure agreements while navigating the patentsphere.  The firm makes no secret of its outrage over the activities of patent assertion entities (PAEs).  In their latest comments on patent trolling and privateer business models sent to the Federal Trade Commission (FTC) it asks the FTC to investigate how these nefarious privateer business models operate.  Patent privateering is where a company that makes things - an operating company - teams up with a non-practicing entity (or creates an entity for that purpose) and then go after infringers rather than file infringement lawsuits themselves.  Here are the questions buried in the Google FTC comments:

  • How prevalent is the outsourcing of patent enforcement by operating companies to PAEs?
  • What types of arrangement have PAEs and operating companies consummated?
  • What motivates these arrangements?
  • What are the likely competitive harms and benefits of patent outsourcing?
  • What are the competitive implications of the secrecy with which many PAEs conduct their operations?
  • Do the particular terms of outsourcing arrangements indicate that operating companies are employing PAE proxies as competitive weapons?
Most of the questions can be answered with, wait for it, a Google Search.  

Some of the answers to the questions are obvious: What motivates these arrangements? Making money.  Having non-correlated assets turned into cash without having them impact the bottom line.

And some seem kind of disingenuous for a firm that dominates its market space and it behavior as it moves into new markets questions as monopolistic - Do the particular terms of outsourcing arrangements indicate that operating companies are employing PAE proxies as competitive weapons?

And while Washington is awash in sequestration commentary and vitriol on the effectiveness of government employees, it seems a little simple minded that Google and its commenting buddies (Red Hat, Earthlink, and Blackberry) to put forth such simplistic questions before an organization that put on one of the most sophisticated and informed discussion on the subject matter as part of it's December 10th 2012 Patent Assertion Entity Workshop with the Justice Department.  Did Google send anyone?  Its was a veritable who's who of the Patent Bar (and a fashion parade for litigation wear and red ties.)  Blackberry doesn't discuss its purchase of the patents held by the Multimedia Patent Trust or it's pre-Google purchase of the mobile assets of Motorola, of the peace treaty between BBBY and MOTO.  Red Hat and Microsoft engaged in its own not dance on Linux related patents documented in Burning the Ships.  Earthlink has its own NPE stories.

As a very expensive subscription to Intellectual Asset Management and some pretty easy  Google searches reveal, the privateer business model is on the move and other PAE business models are here to stay.